Pāmu Farms of New Zealand (Landcorp Farming Limited) advises that it has updated its forecast net operating profit for the financial year ending 30 June 2025. It now expects full-year net operating profit of between $25 million and $40 million. This compares to the previous forecast of $8 million in its Statement of Corporate Intent.
Pāmu Chief Executive Mark Leslie says:
“The change to forecast net operating profit reflects increased revenue due to positive production trends, and higher milk and red meat prices. The wide range of the forecast recognises the potential impacts presented by material adverse weather events, volatility in commodity prices, including the range of the Fonterra forecast for the season, and geo-political tensions.”
The forecast increase in milk revenue primarily reflects the recent upward revision of Fonterra’s forecast Farmgate Milk Prices to $9.00 - $10.00 per kg of milk solids (KgMS) for conventional milk, and $10.90 - $11.90 per KgMS for organic milk. It also assumes an increase in livestock revenue.
“There is strong demand for beef in the US market, and while sheep meat prices have improved due to lower supply in the market, they remain below five-year averages,” Mr Leslie says.
“Our farm teams continue to enhance productivity, increasing production through targeted pasture and livestock management as part of our farming excellence initiatives.
“Continued spending discipline is essential if this improvement in milk price is to be reflected in the balance sheet. Cost control initiatives implemented on farms will enable us to deliver to our cost of production and capital expenditure targets.”
The April 2024 Shareholding Minister’s Letter of Expectations emphasised the need for Pāmu to focus on core business and deliver an appropriate level of commercial return to, and represent a value-for-money investment, for the Crown.
Pāmu has since confirmed an exciting proposal that could uplift pathways to farm ownership for more Kiwi farmers. The state-owned farmer is offering various contracts including herd-owning share milking, variable order share milking, and contract milking on four of its 44 dairy farms.
“This new model for Pāmu will free up capital while providing more opportunities to grow talent and benefit the wider agricultural industry. It is one lever of opportunity to drive shareholder value,” Mr Leslie says.
Higher-value land use and diversity of earnings are also elements of the company’s wider opportunity to deliver profitable and sustainable farming systems.
“While much of our business is focused on farming, increasingly we are diversifying our portfolio to mitigate commodity cycles and optimise our use of assets to generate returns. Integrating horticulture and production forestry into our land use has increased our returns on farms. Year two of our avocado harvests are ahead of plans and the six hectares of blueberries in tunnels in Northland are progressing well towards our first harvest commencing August 2025.”
“We are positioning Pāmu for the long term to be able to perform in an environment of heightened global uncertainty, inflationary and interest rate pressures and commodity price volatility,” Mr Leslie says.
“Against a backdrop of improved earnings at Pāmu, we also acknowledge the need to support the global challenge of climate change.
“Our new methane testing and feed conversion efficiency facility, on our St Kilda farm near Taupō, provides the ability to measure feed intake and methane for the selection of low methane, efficient beef and dairy-beef genetics for both Pāmu and wider-industry use.
The facility will also offer capacity for third-party research such as testing other methane mitigation technologies to facilitate their path to commercialisation.
Landcorp Farming Limited’s full continuous disclosure can be found on the Treasury website:
Pāmu Farms of New Zealand
Pāmu is the brand name for Landcorp Farming Limited, a State Owned Enterprise with 112 farms across the motu. Pāmu exists to enhance the future of agriculture for generations of New Zealanders to come, return land under Te Tiriti o Waitangi settlements, and produce a financial return. Pāmu is focused on running a profitable and efficient business where farming activities positively impact ecosystems and communities.
Pāmu regularly opens its gates around the motu to share what it is doing with industry, farmers and other stakeholders. Find and register for events here:
