Agriculture boom drives 'fantastic' result for NZ's largest farmer, Pāmu

Strong farm performance aided by high commodity prices have lifted the balance sheet for state-owned farming enterprise Pāmu Farming.

The organisation, known formerly as Landcorp, manages 112 farms across Aotearoa ranging from dairy to deer, beef, sheep, forestry and horticulture.

Pāmu recorded an after-tax profit of $160 million in the financial year 2025/2026, up by a third on last year's $120m, according to its latest financial results released on Thursday.

The after-tax profit included revaluations on livestock and farms.

It followed financial losses through 2022/2023 and 2023/2024, due to diving livestock prices and recovery costs from Cyclone Gabrielle.

Chief executive Mark Leslie said this year's result reflected a sustained lift in farm performance across the organisation.

"This is a fantastic result for Pāmu. It reflects several years of hard work across our farms and teams improving how we farm, making good decisions every day, keeping a close eye on costs, and getting more from the land and animals in our care."

Both its milk and livestock production increased this year.

Milk production rose 1.8 million kilograms of milk solids on last year to 15.8m kg of milk solids. At the same time, the cost of milk production fell 4 percent to $7.05/kg of milk solids.

Whereas livestock production increased to 22m kg of products like wool and velvet being made (converted to carcass weight). However, the cost of livestock production rose seven percent to $4.91/kg liveweight; though was well off the FY23 peak.

Leslie said stronger commodity prices contributed to the outcome.

"Price has certainly helped, but our progress goes well beyond the market cycle," he said.

It continued to grow its beef-on-dairy supply, rearing 72 percent of all dairy calves born, up from 65.5 percent the year prior.

It had farm environment plans in place across all its farms that it said would guide investment and support pricing premium.

Leslie said the business was well-positioned to pursue commercial partnership opportunities, like with programmes Livestock Innovation Farming Transformation and equity partnership models.

Meanwhile, net debt reduced by $36m, which the firm said would create greater flexibility to invest through the cycle.

However, Leslie said agriculture remained a "volatile" business.

"Commodity prices, input costs, climate events and global uncertainty can all change quickly," he said.

"Lower debt and a stronger financial position help us manage uncertainty and continue investing in operational excellence over the long-term."

The firm said it delivered its strongest operating result on record, with net operating profit at $113m up 131 percent from $49m in FY25.

It forecasted this would increase to between $77-87 million for FY27.

Leslie said it expected ongoing tensions and instability in the Middle East, alongside forecast El Niño conditions, would increase costs and create productivity challenges.

"We expect the operating environment to remain uncertain and more expensive than prior years."

However, State Owned Enterprises Minister Simeon Brown said Landcorp's turnaround was gaining momentum and its results showed it was making meaningful progress.

"Improved profitability, lower debt, stronger productivity, and increased returns to shareholders are all positive indicators that the business has made significant positive change.

"Landcorp plays an important role in New Zealand's primary sector and manages significant assets on behalf of New Zealanders.

"The opportunity now is to continue building on this progress, lifting productivity, strengthening profitability, and delivering greater value to taxpayers."

Dividends of $25m would be paid during FY26, with a further $15m in early FY27.