Industry thrown away, farmer says

Rob Hewett

SILVER Fern Farms management has been told to ‘‘get back to grassroots’’ otherwise there will not be a sheep and beef industry in New Zealand.

Wyndham farmer Brent Robinson, who spoke before Silver Fern Farms Cooperative’s annual meeting in Dunedin recently, said sheep and beef businesses were unsustainable and an agricultural industry the country had been built on was being thrown away.

People had been ‘‘led astray’’ by political agenda around climate change and, while he was not a climate change denier, he did deny the reasons for it.

‘‘I just want science to come back to lead our decisions rather than political agendas.’’

There would be a big drop in sheep numbers this year as people were ‘‘fed up’’ and, as the older generation of farmers were about to retire, he could not see where the buyers of farms were coming from — apart from those being converted for forestry.

When considering the environmental impact sheep and beef farmers had on the environment, it seemed quite hypocritical that farmers could not claim sequestration of carbon and, instead, got taxed on it.

In his chairman’s address, Rob Hewett said consideration of farm gate emissions pricing was one of the major focuses for many during the year through He Waka Eke Noa and Silver Fern Farms had taken an active and constructive approach to those discussions.

The company supported a fair and equitable farm-level system for emissions pricing and was confident New Zealand farmers could continue to ‘‘lead the world’’ in low emissions, nature-positive food production.

The solution to emissions reductions was threefold: initiatives like the company’s net carbon zero were part of the market solution, a fair and equitable farm-level system was part of the pricing component, but farmers needed actual tools in the toolbox to bring reductions into effect.

Silver Fern Farms helped establish the government-industry joint venture into reducing agricultural emissions and it also entered into one of New Zealand’s largest sustainability-linked working capital financing facilities.

One of the highlights this year was the launch of net carbon zero in the United States in March. While the scale of the product was still relatively small compared with the overall size of the business, it represented a direction of travel of much more significance.

Silver Fern Farms Ltd had previously announced a strong financial performance for the full-year — an after-tax profit of $189.3 million, up $85.5 million on the previous year’s result.

Revenue was $3.3 billion, up from $2.7 billion, and ebitda, including share of associate earnings, was $301.3 million, up from $179.7 million. Silver Fern Farms Co-operative, which jointly owns Silver Fern Farms Ltd with Chinese-owned Shanghai Maling Aquarius, increased its aftertax profit from $51.5 million to $94.1 million.

Mr Hewett, who described it as a ‘‘very credible’’ performance, said last year included a continuation of the ongoing impacts of Covid-19 which disrupted everything from the company’s ability to process livestock, the availability of shipping into market and the consumption habits of consumers. That still continued to impact the business.

Despite Covid-19, the first half of last year also had some of the highest returns for farmers in its history which contributed to the best result for the operating company and the co-operative by some considerable margin.

By the end of the year, the impacts of world events were all being felt and that continued to influence the state for many today — including the conflict in Ukraine, and the cost-of-living crisis which gripped many key markets and impacted many of the key input costs across farming systems in New Zealand.

The operating company’s ability to navigate risks in the market better than expected led it to proactively make more than $21 million of reward payments to suppliers over and above the record schedule pricing and other payments they received.

The accumulative dividend payments of 23.2c per share and patronage reward of 21.6c per share for last year were the highest yield in the company’s history.

During the question session, a shareholder asked why SFF’s share price continued to languish in the face of such a good result. Mr Hewett said farmers held shares essentially as an ‘‘insurance policy’’ to get processing space at times that best suited them on-farm.

They were not actively trading in the market so there was not huge liquidity.