Jamie Mackay: The Country host on whether the Government will put The Country on the chopping block

There's speculation the Government may be looking to sell off Landcorp as the asset continues to underperform.

Long-standing agricultural consultant Will Wilson has noted it's worth $1.6 billion - which is significantly less than it was a year ago.

The Country's Jamie Mackay explains further.

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Episode Transcript

Speaker 1 (00:00):
Jamie McKay from the Countries with us. Jamie, Will the
government looked to put land Corp up on the chopping block.
I mean, well, I guess this is the question. Is
the government going to look at selling land Corp? And
if they do, is that a good idea? How will
that go down with farmers? Jamie Giddy gid a Ryan,
thanks for being with me. So land Corp. It's one

(00:22):
of the ones they're talking about putting it on the
chopping block. What do you reckon? Good idea, bad idea?

Speaker 2 (00:26):
Well, it depends whether you're into selling state assets. I
guess if you, Brian, if you are going to sell one,
you would have to think seriously about selling the nation's farm.
It's not performing very well at all and it's worth
quite a bit of money. I had a guy on
the show today on my show The Country called Will Wilson.
He's a long standing agricultural consultant. He takes he's involved

(00:51):
in several high profile governance roles in the primary sector
and he was doing the sums on the performance of
all of our leading ad companies and he was almost
quite scathing about Pamu, the artist formerly known as Landcorpy said, Look,
it's it's got poor business strategy, poor governance and management,
and it's a poor performing company. But the kicker is

(01:11):
ryan if you take its assets less its liabilities, it's
still worth about one point six billion dollars. We could
do a lot with that. And the other interesting thing
is it's worth about, according to will Anyhow, about one
hundred and fifty billion less than it was a year ago.
So maybe we're throwing good money after bad with Parmu.

(01:33):
But if we sell it, who do we sell it to?
It's a huge farm, it's New Zealand's bigger's farm. Would
it flood the rural market? And then it plays other
roles in agriculture as well, such as research on behalf
of the wider agricultural industry and also training young people
onto the land. So it's a bit of a vex question,

(01:53):
but you would have to say, as it stands at
the moment, it ain't a great investment.

Speaker 1 (01:58):
No, and it's I think it's sort of top of
the list for the government when you know, because farmers
run their farms much better than where then the government
runs its farm, right, so why not let them have it? Yeah?

Speaker 2 (02:08):
Well, and there's also an argument because in the old days,
Land Corp used to be lands and surveys and they
would have ballot blocks and they would put young farmers
in and produce the or increase the productivity of the country.
There is a argument that maybe Land Corp should become
a bank and for instance, with its dairy farms, and
they've got some lovely dairy farms, put fifty to fifty

(02:29):
share milkers in there, give them some skin in the
game and rarely start to generate some money. But it
would be fair to say that financially the performance of
land Corp hasn't been that flash. Last year, Ryan, they
lost off the top of my head, something like twenty
six million dollars, Yes it was, yeah, twenty six million dollars.
And when you consider that they got thirty eight million

(02:52):
from a windfall or windfalls from carbon credits. Putting that aside,
the actual meat and taties of the farming business ain't
going that well.

Speaker 1 (03:01):
Let's talk about something that is going well. Then, dairy
price is off to a very strong start, the Global
Dairy Trade Action. The first two of them for the.

Speaker 2 (03:08):
End, yeah, well, the first one was down and the
second one was up. Wasn't it.

Speaker 1 (03:12):
Yes, Yes, it was down one point four then up
one point four.

Speaker 2 (03:15):
Yeah, and that sort of equalized one another out there.
But the big one was in the last one. Ryan
one point four was GDT across the board. But the
really important one we have a look at is whole
milk powder prices. They went up five percent and this
is the highest price on the platform since June twenty

(03:36):
twenty two. And this has I guess convinced ASB they've
led the charge. They're saying that their milk futures or
the future milk price forecast price for this season. They're
saying ten dollars twenty five, remembering that everyone else in
the market, including Fonterra, is pretty much ten bucks. Ten
dollars twenty five would obviously be a record price, maybe

(03:59):
not an flation adjusted terms, but a very good one
for all that. Now, their chief economist, a guy by
the name of Chris Tennant Brown. You would have seen
him on the tally. He's saying, look, this isn't a dundelle.
This four months left in the season. Prices could still move.
The season to date is up production wise three point
seven percent, but we're well past the midpoint. Of the

(04:23):
Bell curve. In terms of production, typically only about a
third of the production comes from here on and so
a lot of that production and sales have been locked in.
But there are a few other things to consider. Kneewers,
soil moisture deficit charts have been showing a lot of
the country could do with the drink. We've also got
the exchange rate. Goodness knows what happens there with Donald

(04:45):
Trump in charge. And we've also got a couple of
other issues in Europe which has forced them back into
the market. A weebit, the threat of foot and mouth
in Germany and the ongoing presence of blue tongue virus.
There's a lot of things that play here, Ryan, but
generally in terms of New Zealand industries, New Zealand or
the New Zealand airy industries is looking as good as anything.

Speaker 1 (05:07):
And thank goodness, we've got them. Gosh, don't we need
a bit of that at the moment. Jamie, Thank you
very much.

Speaker 2 (05:12):
Cheers Ryan, always good the chat.

Speaker 1 (05:14):
Cheers Jamie. It's Jamie McKay from the Country. For more
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