Farmlands has released its 2023 Annual Report. It emphasises the rural supplies co-op’s focus on backing its core farmers and growers in a difficult operating environment, while also setting the co-op up for long-term success as a rural market leader in rural supplies, fuel, animal health, nutrition, agronomy and horticulture.
Kiwi farmers and growers are facing high interest rates, inflation, increased compliance costs and lower farm-gate prices. In addition, natural events such as Cyclone Gabrielle have had a tremendous impact on many rural communities. In response, Farmlands has clarified its focus around two core objectives.
“First and foremost, right now we need to be supporting our customers with their core farm inputs. We know it’s incredibility tough out there and we must compete hard for our customers – by winning on a combination of price, product availability, service and advice. We also must remain focused on our future goal of being the number-one buying group for New Zealand farmers and growers,” said Farmlands Chair, Rob Hewett.
Farmlands finished the year as a leaner business, to reflect the current operating environment, as it continued to streamline its operations. Any short-term investment was focussed on better supporting customers right now, by strengthening its sales and technical teams through the development of tools, recruitment and training.
The co-op’s most important future-focused programme is its supply chain transformation and product strategy. This covers how the co-op buys and stores product, as well as how it transports stock to customers. Throughout the year, the co-op has been rationalising its product range to be able to better leverage its buying power on behalf of customers and moving to a centralised buying model that continues to also support regional and seasonal farm and orchard input requirements.
“We are already seeing dramatic improvements in our ability to forward-forecast demand, purchase the right volume, negotiate and improve margin on the products we sell,” said Farmlands CEO, Tanya Houghton.
“We’ll complete our core range roll-out across our entire retail network this month. This has required a massive co-ordinated effort right across our business – from our support office to our retail staff implementing the change. I would like to thank everyone involved.”
Farmlands has also focused on growth through strategic partnerships and acquisitions. In 2022 Southfuels and Farmlands formed a new joint venture company, Fern Energy Limited, a bulk fuel provider designed to provide better solutions to customers. Fern had a successful first year, generating $630m in revenue.
Farmlands has also announced its intentions to purchase SealesWinslow from Balance Agri-Nutrients as part of its growth plans in the animal nutrition section, alongside its existing NRM and McMillan brands.
“Fern and the SealesWinslow acquisition plans are examples of how we are flexible and can use different operating models to meet our customers’ needs” added Tanya.
There were several other notable milestones achieved by the co-op during the 2023 financial year. In partnership with Federated Farmers and Stuff, Farmlands raised and shared over $2.1 million dollars with the communities most affected by Cyclone Gabrielle during its successful Post Your Support campaign. This year also saw the successful rollout of the Agrecovery Small Bags Stewardship programme across 76 Farmlands stores, and the introduction of two major technical training initiatives, AgronoME and Cultivate.
Following a necessary financial provision for stock obsolescence, which influenced profitability, the cooperative made a small net loss after tax of $0.7 million. Despite the challenging environment, turnover remained stable at $2,542 million and revenue grew slightly to be $808 million. Farmlands delivered $90.6 million in customer rebates to shareholders through rural supplies and Card Partner rebates.
“Everything we do at Farmlands is focused on being the very best buying group for Kiwi farmers and growers. This year, even though it’s been incredibly tough, I’m proud of the fact that we’ve made significant strides towards achieving this,” said Tanya.
The 2023 Farmlands Annual Report is available here: https://farmlands.co.nz/annual-report.html