KEY POINTS:
Chris Kelly
CEO, Landcorp
How would you describe last year for state-owned Landcorp (New Zealand's largest corporate farmer)?
Testing, largely because of the high dollar, and the beef and sheepmeat [prices], which had a bit of a roller- coaster ride.
What was Landcorp's greatest achievement?
Commissioning three 70-bale rotary cowsheds, all milking a combined 1900 cows on our new development on the central plateau of the North Island.
And greatest disappointment?
The precipitous 25 per cent decline in sheepmeat prices in the first two weeks of January.
What do you think this year will bring for Landcorp?
I think we'll continue to see high international commodity prices. However, that to a great extent will be offset by the resistant high dollar. So I think 2007 will be another reasonably challenging year. I think dairy prices are being talked down as we speak. Westland have said they will be in the lower [part] of the range of the expected payout and Fonterra are starting to mutter about whether they can reach $4/kg of milk solids or not. I don't think they've said it publicly but around the traps it's been muttered in dark corners.
What will be the major challenges for Landcorp in 2007?
The emerging environmental issues that are facing all farmers and, in particular, exemplified by ourselves as we develop more dairy land in the middle of the central plateau.
What do you expect from the economy this year and how will that affect Landcorp?
I can't see a major easing in the dollar, which will mean that despite the high international commodity prices in overseas currencies we will be somewhat constrained in our earnings again. I think that for the first time in many years we'll see probably a plateauing - if not a slight decrease - in farm prices. I think environmental issues will continue to raise their head and we'll have to face those.
Who were your mentors? What did they teach you?
My greatest recent mentor has been my past chairman Alison Paterson. She taught me treading the line between governance and management is an area that is as much an art as it is a skill, and done well it creates some really good creative tension in a board.
