Pamu, New Zealand's state-owned farming company, has cut its forecast net operating profit for the 2027 financial year to between $77 million and $87 million after a record $113 million in 2026, Rural News reported. Chief executive Mark Leslie said rising input costs and the weather were the reasons.
"Those additional feed, fertiliser, and fuel prices mean nearly $30 million of additional costs that the businesses are facing this year," Leslie said, adding that production targets have not been cut. The company is watching input costs and how El Nino conditions play out.
In 2026 Pamu more than doubled its operating profit from $49 million, posted a net profit after tax of $160 million and paid the government $25 million in dividends, including a $10 million special dividend reflecting Fonterra's capital return to farmer-shareholders. Leslie estimated that about 60% of the improvement came from productivity and operations rather than strong protein prices.
Its dairy farms produced 15.8 million kilograms of milk solids, 13% more than the year before. The cost of production fell 7% to $6.99 per kgMS for conventional dairy but rose 10% for organic dairy and 7% for livestock. Leslie said the priority now is to lock in the gains by lifting productivity and managing costs and risk.
Source: Rural News Group
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