Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Landcorp to scale back Wairakei dairy conversion

Landcorp confirms it will scale back dairy conversion at Wairakei Estate

By Tina Morrison

March 7 (BusinessDesk) - Landcorp Farming, the state-owned farmer, confirmed it will scale back the conversion of former forestry land to dairy farming on leased land at the Wairakei Estate north of Taupo following a slump in milk prices and concern about the environmental impact.

New Zealand's largest corporate farmer "will significantly reduce dairy's footprint from the original plans and instead include alternative uses for the 14,500 hectares of former forestry land it leases from Wairakei Pastoral," the Wellington-based company said in a statement.

Landcorp has a 40-year lease to develop and farm the former forestry land, and since 2004 has developed 13 dairy farms with 17,000 cows over 6,400 hectares of the property. A new land-use model will see the eventual number of dairy farms and cows on the Wairakei Estate significantly reduced from the 39 originally planned, it said today.

"Under the new plan, the land leased from Wairakei Estate would be used for dairy (irrigated and dryland), dairy support, sheep milking and other potential uses being investigated," Landcorp said.

The land-use changes will lessen the impact on the environment and improve the profitability for Landcorp, it said. The company expects to spend between $25 million and $35 million less than originally planned on the development, improving returns, it said.

"This decision makes environmental and economic sense," said chief executive Steven Carden.

The change had the support of the land owners, Ross Green said on their behalf.

Landcorp expects to post a full-year net operating loss of between $8 million and $12 million in 2016, and forego paying a dividend to the Crown for a second year following a slump in milk prices.

An early economic assessment for the Wairakei Estate was based on milk prices of $7 per kilogram of milk solids. Since then, prices have slumped with Fonterra Cooperative Group, the country's dominant milk processor, forecasting a payout of $4.15/kgMS this season.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Fuels Rushing In: Govt "Ready To Act" On Petrol Market Report

The Government will now take the Commerce Commission’s recommendations to Cabinet...
• A more transparent wholesale pricing regime • Greater contractual freedoms and fairer terms • Introducing an enforceable industry code of conduct • Improve transparency of premium grade fuel pricing... More>>

ALSO:

Reserve Bank Capital Review Decision: Increased Bank Capital Requirements

Governor Adrian Orr said the decisions to increase capital requirements are about making the banking system safer for all New Zealanders, and will ensure bank owners have a meaningful stake in their businesses. More>>

ALSO:

Aerospace: Christchurch Plan To Be NZ's Testbed

Christchurch aims to be at the centre of New Zealand’s burgeoning aerospace sector by 2025, according to the city’s aerospace strategic plan. More>>

ALSO:

EPA: Spill Sees Abatement Notice Served For Tamarind Taranaki

The notice was issued after a “sheen” on the sea surface was reported to regulators on Thursday 21 November, approximately 400 metres from the FPSO Umuroa. A survey commissioned by Tamarind has subsequently detected damage to the flowline connecting the Umuroa to the Tui 2H well. More>>

Taskforce Report: Changes Recommended For Winter Grazing

A Taskforce has made 11 recommendations to improve animal welfare in intensive winter grazing farm systems, the Minister of Agriculture Damien O’Connor confirmed today. More>>

ALSO: