Pāmu chief executive Mark Leslie enjoyed a visit to Waipori Station in Otago this month. Photo / Supplied
Last week marked a year since Mark Leslie took over as chief executive of Pāmu, the trading name for state-owned Landcorp Farming Ltd. He talks to Otago Daily Times’ business and rural editor Sally Rae about the past 12 months and the impact of Cyclone Gabrielle on the business.
When Mark Leslie first flew into the Cyclone Gabrielle-stricken landscape of Gisborne and Wairoa, it was the “quantum of damage” that struck him.
While it was not surprising, the chief executive of Pāmu, New Zealand’s largest farmer, said it was the impact of seeing it first-hand that was so powerful.
There was an impact on 24 of Pāmu’s farms and seven were most severely damaged in terms of major slippage, damage to infrastructure - including roads, tracks and bridges - and significant loss of access to those farms.
Last Wednesday, the state-owned enterprise updated its net operating profit full-year forecast due to impacts from Cyclone Gabrielle and also softer milk prices.
It now expected a profit of between $34 million and $44 million compared to its original budget forecast of $55 million contained in its statement of corporate intent.
Pāmu’s early assessment of the cyclone damage was $6.5 million over two years, $2.5 million of that falling into the current financial year. The cost would be a mix of operating and capital expenditures.
Pāmu expected livestock revenue to be $14.3 million lower due to a combination of Cyclone Gabrielle, softer sheep prices and lighter animals from Southland and Te Anau farms which have experienced dry conditions over the past two summers.
Recalling the company’s response to Cyclone Gabrielle, Leslie said the first focus was its people and establishing communication with those affected properties. Properties were accessed by helicopter to check that teams were safe and to fly in basic supplies; food, generators and fuel.
Several teams in helicopters arrived before Leslie landed and the first feeling of those on the ground was a sense of relief as confirmation came that Pāmu’s people were safe and well.
As he carted in generators and supplies to cyclone-stricken teams, many did not initially recognise that it was the Pāmu boss helping with the deliveries.
Some employees had worked on the properties for a number of years and their “real connection” to the land was very evident. For many, it was about reassuring them they had the support of the broader organisation and that they could support their own communities as well, he said.
And that support was not just about its immediate staff. Pāmu was conscious that staff had family members off-farm that were also affected and supplies were also provided to neighbouring farmers and Pāmu teams were also supporting their neighbours.
Pāmu had also been flying in employees from its broader network, including shepherds and their dogs from Otago’s Waipori Station, to help out.
Leslie said he felt pride, seeing the resilience of the teams wanting to get their farms back up and operational, the crisis bringing out the best in people.
While the costs were significant regarding infrastructure, Pāmu now had “reasonably good” estimates of livestock losses and they had been “fairly minimal”. Work continued on getting secure boundary fences around some farms which was challenging.
The next stage of the recovery was going to be “a marathon, not a sprint”; there were long-term implications from the devastating weather event.
Lost pastures would take years to recover. Winter feed reserves in affected areas would soon start to get compromised and that would be a challenge for many.
Animals would need to be moved off-farm and there was a need to ensure there were no animal welfare issues “further down the track”. Pāmu had its own vet on staff and a key part of conversations was around making sure it was doing the right things for both its people and animals. Conversations were also being held with the likes of processors.
Brought up on a dairy farm at Reporoa, on the Central Plateau, Leslie had a hands-on understanding of farming and was not immune to still putting the cups on cows.
His early memories involved working with his grandfather on-farm planting trees and he laughed how he had a harsh critic - his farming brother - which kept it “really real”.
“I understand the challenges being faced and also the opportunities,” he said.
After completing a Bachelor of Agricultural Science and a Masters of Business Administration, both from Massey University, Leslie’s experience in the agricultural industry included roles in operations, logistics, technology and product development, and quality assurance.
Prior to joining Silver Fern Farms, he spent nearly two decades at Fonterra including as head of the operations and supply chain component of the brands business in New Zealand and, previously had responsibility for the operation of the 94 ingredients plants across Fonterra’s 27 sites along with the associated milk collection activities.
He also held several board and ministerial advisory roles and chaired the Fonterra and Silver Fern Farms joint venture company Kotahi for six years and the Pastoral Greenhouse Gas Research Consortium.
When it came to the attraction of the Pāmu position, Leslie said he had spent 25 years “on the other side of the business” in processing, whether with Silver Fern Farms or Fonterra.
One aspect was the ability to run New Zealand farms and that was something that was a privilege. Equally, with the opportunities and challenges facing the agricultural sector, it was an opportunity to use the Pāmu network, share some learnings, collaborate with the likes of processors and research organisations, and “trial a few things on-farm”.
“We know we’re not going to get it right every time,” he said.
Asked whether Pāmu felt the same pressures that other farmers were feeling, Leslie said the company’s farm managers saw that pressure around how to balance farming excellence and bringing innovation onto farms to help solve challenges ahead, along with integrating requirements around the likes of freshwater.
That was where there was an opportunity to use Pāmu’s network of farms and its farming community to support some of those changes and learn some of the solutions on various farms and “share it around”.
As well as the response to Cyclone Gabrielle, Leslie said a highlight of his year had been getting out on Pāmu farms and talking to the managers and teams.
“You see [the] absolute passion and pride they have in their own individual farm,” he said.
Through his own background, having spent time in processing environments, he had a good perspective on what consumers and customers expect, while he was also grateful to be surrounded by an excellent board and management team.
In January, Pāmu confirmed about 650ha of new tree planting had been identified on the 3040ha Thornicroft Station, near Mahinerangi, in Otago’s hinterland, and about 2300ha was expected to be planted on 12,564ha Waipori Station, which shared boundaries with Thornicroft.
In its latest annual report, Pāmu said it was scaling up forestry and had a commitment to new planting of about 1000ha annually until 2030. Most of that was pinus radiata although other exotic and native species were being included where that best aligned to land suitability and future market potential.
Leslie said Pāmu’s stance was about “the right tree in the right place”, which included the right tree in terms of species. Trees had benefits that extended beyond production, including the ability for shelter and protecting waterways.
“We aren’t just going to be openly planting out whole farms at a massive extent from a carbon farming perspective,” he said.
Lessons from Cyclone Gabrielle showed they were very valuable in holding soil on hillsides and protecting hillsides but harvesting needed to be managed.
Pāmu was now looking at its farms that had been impacted by the cyclone and it would not be building them back “exactly as they were”.
Looking ahead to the next year, there would be a focus on ensuring the company had safe and capable people.
Farming excellence and innovation needed to be shown, and there was a focus on sustainability, and also having conversations to share some of Pāmu’s learnings.
The Resources Minister came to the select committee sporting a Make NZ Great Again hat.