A value chain approach must be part of the solution for Landcorp and all New Zealand farming amid the ever-present challenge of volatility for commodity producers, the country's biggest farmer says.
"We certainly see the impact in Pamu [Pamu Farms of New Zealand is Landcorp's brand name] revenues and earnings from year-to-year and, more generally, we see volatility growing as the drivers of demand and supply become even more uncertain in globalised markets," chairwoman Traci Houpapa and chief executive Steven Carden said in the annual report released this week.
In September, the state-owned enterprise announced an improved net profit after tax of $51.9 million on revenue of $233.5 million for the year ended June 30, compared with a $11.5 million profit on revenue of $210 million the previous year, largely attributed to low milk prices.
In their report, Ms Houpapa and Mr Carden said the company was now into the fourth year of transformation, away from traditional commodity-producing agriculture and into a business focused on natural foods, nutrition products and fibre of the quality and provenance valued by "millions" of consumers.
The company was "hard at work" on the transformation and it had some exciting value chain initiatives under way although not all were ready yet for public disclosure.