State farmer posts record results
State farmer Pamu has delivered its strongest operating result on record.
Pamu is now forecasting a record net operating profit for the year ending June 30, 2025, based on unaudited results.
The country’s largest farmer now expects full-year net operating profit (NOP) of between $46 million and $49 million, compared to the previous forecast range of $43 million to $51 million released on March 3. It also forecasts a net profit after tax (NPAT) range of $119 million to $122 million, which would represent a record profit across both measures for the company. In the previous financial year, Pamu reported a NOP of $20 million and posted a NPAT of $26 million.
Pamu CEO Mark Leslie attributed the improved financial performance to a combination of internal and external factors.
“On the operational side, we are laser-focused on core farming activities and operational excellence initiatives. Productivity gains through targeted pasture and livestock management have been key to the turnaround in performance.
“Market-driven conditions—such as high international demand supporting milk, beef, and lamb prices—have contributed to revenue outcomes, offsetting weather-related challenges such as drought in the Central North Island.”
The preliminary result assumes a final Fonterra conventional milk price of $10/kgMS. Beef farmgate prices have remained above the five-year average, reflecting strong export demand, particularly from the US, and lower domestic production. Similarly, lamb prices continued to rise, driven by sustained demand in key markets and reduced lamb slaughter volumes nationwide.
Last month State Owned Enterprises Minister Simeon Brown wrote to Pamu board expressing disappointment and concern at the state-owned farming company’s “failure to make progress in improving its performance”.
He cited as examples of underperformance and measures needing to be addressed, improving the five-year average of a 2.6% return on shareholder’s funds, and its failure to meet its cost of equity for at least a decade.
The Government told Pamu that it must deliver a bold and challenging turnaround plan to improve value and return to the Crown, in addition to focusing on efficiently managing the existing land footprint.
Pamu manages over 100 farms, forests and horticultural operations across the country – spanning sheep, beef, deer and dairy, as well as growing horticulture, arable and forestry portfolios.
The state farmer’s outlook for FY26 remains positive a forecast NOP of between $56 million and $66 million.
It says the midpoint of this forecast would represent another record NOP for the company and show its focus on core business objectives of efficiently and profitably managing the Crown’s farming portfolio for commercial returns. The lift in profitability occurs despite an assumed decrease in the Fonterra conventional milk price to its midpoint of $9.50/kgMS and a softening of red meat prices from the current high levels.
