Landcorp to return $20 million dividend to government

State-owned farm, Landcorp, has had a solid performance this year according to its latest accounts, says meat industry commentator Allan Barber.

Landcorp’s net operating profit of $27 million for 2011/12 was down on the previous year, but still a good performance, Barber says in a recent blog, adding that the SOE will pay a $20 million dividend to the Government.

During the year, it produced 10,176 tonnes of sheepmeat, 9,715 tonnes of beef and 2,258 tonnes of venison, as well as large volumes of milk solids, wool and timber.

Landcorp has a target of selling 80 percent of its lambs on fixed price contracts to Silver Fern Farms, Alliance and other meat companies and last year achieved in excess of 70 percent by this method, proving to its satisfaction that this provides less volatile and overall better market returns than spot trading. Lamb production is geared to meet specific weights and specification to fulfill meat companies’ contracts with northern hemisphere retailers.

As a founder partner with Silver Fern Farms and the Ministry for Primary Industries in FarmIQ Systems, Landcorp is committed to the development of integrated value chains from pasture to plate, designed to align New Zealand production and supply with consumer demand preferences. Twelve of Landcorp’s farms are now on FarmIQ’s farm management system.

The development which attracted the most publicity was the joint venture with Shanghai Pengxin to manage the 16 Crafar dairy farmers bought from the receivers and expected to get underway shortly. This fits in with Landcorp’s goal to increase its involvement in the dairy industry and a further “extension to Maronan Dairies in mid-Canterbury and further development Wairakei Estates near Taupo will contribute to this,” Barber believes.

Sheep and beef finishing has been boosted by the development of Cheltenham Downs in Manawatu and this has helped recovery from the drought years of 2007 and 2008, reports Barber.

Over the past 22 years, Landcorp has paid dividends to the government; therefore, New Zealand as a while, of nearly half a billion dollars.

“There’s no evidence that Landcorp is constrained by public ownership or that it would benefit from part privatisation,” concludes Barber.

Read the full blog item here at Barber’s Meaty Issues

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