News that an overseas-backed Maori trust is trying to buy 28 farms in Southland sent alarm bells ringing at Federated Farmers. Its concern was mostly about the details of the financial arrangements, but it highlighted the fact that corporate farming, a trend that has been slow to take off in New Zealand, is becoming a force to be reckoned with reports Stuff.

Chris Kelly, chief executive of the country’s largest corporate farmer, Landcorp, says he knows of other initiatives being explored and believes there will be more foreign investors knocking at New Zealand agriculture’s door.”One of the increasing issues that is emerging in the world is the issue of security of supply of food,” he says. Middle Eastern countries, in particular, “are suddenly realising that really, we’re not getting any more land, we’re getting more people, we have to feed them, and they have to live somewhere so the availability of agricultural land is decreasing”.

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NZ’s biggest farmer, state-owned Landcorp will return just $10 million to government coffers. However, the company managed to claw its way back from dismal half-year results showing a $3.1 million operating loss to produce a $7 million net operating profit for the 2008/09 financial year reports The National Business Review. This was down $4 million on last year.

Plummeting land values has led to an overall loss to shareholder return of $76 million – a massive $351.5 million down on last year’s overall $275.5 million return. During the 2008/09 year, land values declined 8% against a massive 21% increase the previous year.

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Deer farmers at their national conference heard speakers call for an individual animal identification system, saying if the farming industry doesn’t get on with it, it could lose overseas markets reports The Manawatu Standard. They said it should not be put in the “too hard basket”, as there is  technology already available that could be used for sheep, deer and cattle. Landcorp chief executive Chris Kelly said he is a solid supporter of a NAIT, which stands for National Animal Identification and Tracing. It is all about an animal identification system that links people, property and animals. NAIT will keep track of where farmed animals are and where they have been.

But some farmers and Federated Farmers, after first supporting NAIT, are saying such a traceability system is not required for overseas markets and are questioning whether the benefits of the scheme outweigh the costs of implementing it. Feds president Don Nicolson said: “It’s not clear that having a new Wellington bureaucracy forcing farmers to have a number plate on every sheep, cow, or deer, is going to be worth it. “If farmers think individually identifying animals is a profitable idea, then they will do that anyway.”

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State-owned Landcorp Farming has made a $10.5 million loss in the final six months of last year. It has just released its half-yearly report reports The Manawatu Standard. The loss reflected the sharp fall in milksolid prices, the high cost of operating and negative effects from last year’s drought, chief executive Chris Kelly said. The company had previously expected its full-year operating profit would be $15 million. “That is now unlikely to be achieved,” Mr Kelly said. The loss for the six months to December 31 compares with a $9 million operating profit in the same period in 2007.

Landcorp Farming is a state- owned enterprise, owning or leasing 346,500 hectares of land.It has 112 properties and 1.6 million stock units, and is one of New Zealand’s largest farming organisations. Total revenue of $77.6 million for the six months was similar to the same period the year before, but operating expenses were significantly higher at $84.2 million, chairman Jim Sutton said.

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State farmer Landcorp has suffered a half year loss of $10.5 million on the back of dwindling milk prices and higher farming costs reports The Rural News. The company has signalled it will not achieve previously-budgeted full year operating profit of $15m. For six months ending December last year, Landcorp suffered a $10.5m net operating loss before tax, compared to $9m profit for the corresponding period in 2007-08. The company also blames negative effects from the previous year’s drought for the slump in earnings.

Landcorp chairman Jim Sutton says it is working steadily through 2008-09, with a focus on protecting and maximising its capabilities for growth in production and profitability in future years, with an emphasis on cost control. Sutton, a former Labour Agriculture Minister, is likely to come under attack from the new National Government which has been pushing state owned enterprises to lift their game.

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