meta How come corporations in the agriculture industry are raking it in while small farmers and their customers are taking it on the chin? :: The Bullvine - The Dairy Information You Want To Know When You Need It

How come corporations in the agriculture industry are raking it in while small farmers and their customers are taking it on the chin?


Stats NZ said earlier this year that farm costs were at their highest level since they started keeping track in 1993.

Stats NZ data showed that food prices went up 10.1% year-on-year in October, which was the biggest increase in 14 years. Fruits and vegetables grew by 17% on their own.

But companies still make money even though their farmer suppliers have to pay very high prices and consumers are being pushed from all sides.

Here’s a look at some of the biggest food exporters and why they keep doing well despite pressures at home.
Alliance

Alliance Group Limited was a farmer-owned co-op that had eight sites in New Zealand where it did freezing work. They sent meat and by-products from animals that ate grass to Europe, North America, and Asia.

This week, the group said that its pre-tax profit for the year ending September 30, 2022, was just over $117 million, which was a record.

Their profit was up a huge 186% from the year before, and it was based on a record-breaking $2.2 billion in sales.

The co-op would give its farmer shareholders a profit share of $11.3 million and give each qualifying stock unit holder a bonus share worth $10 million.
Fonterra

Fonterra is a well-known company, and this year they reported a normalised profit after taxes of $591 million, which is 1% more than they made last year.

They made $23.4 billion as a group, which is 11% more than last year.

This year, the company paid its farmers a record farm-gate milk price of $9.30 per kilogramme of milk solids. The farmers gave them 1.478 billion kilogrammes of milk solids.

The company said that New Zealand benefited from their profits because milk price payments alone put $13.7 billion back into the economy this year.
Zespri

Zespri is known for being the largest local exporter of kiwifruit. They also sold to markets nearby.

This year, the company said that net sales of kiwifruit around the world went up by 12%, to just over $4 billion.

After taxes, their net profit was $361.5 million, which was more than last year’s $277.1 million.

Zespri sold more than 200 million trays of both New Zealand kiwifruit and kiwifruit from other countries.

The world’s operating income was $4.47 billion, which was 15% more than last year.

The company and kiwifruit growers had been having problems with the quality of the fruit, and it was expected that these problems would last into the next season.
Silver Fern Farms

Silver Fern Farms Limited is a New Zealand-based company that sells meat all over the world.

It was owned equally by Silver Fern Farms Co-op Ltd, a group of 16,000 New Zealand farmers who raise sheep, cattle, and deer, and Shanghai Maling, a Chinese food company.

The company was the biggest one in New Zealand that processed and sold livestock.

Last year, they made a net profit of $51.3 million before taxes and $103.8 million after taxes.

About 6000 people worked for the company.

Last year, their books showed that they made $2.7 billion in sales and paid out $46.7 million in dividends.

Why are they able to make money in this economy?

Matt Montgomerie and Margaret Bei, agriculture analysts at Forsyth Barr, said there were a number of reasons why some companies did well even though the economy as a whole was getting worse.

Montgomerie said that New Zealand agriculture as a whole focused on high-quality goods that were still in demand around the world and that exports helped these businesses.

Bei said that rising prices and the weak New Zealand dollar were positives, but that companies had also faced a lot of problems in the past year, especially with rising wages and costs.

Montgomerie said that most agriculture food companies sold finished products, like meat, or raw materials, like whole milk powder, that were used as ingredients in other products.

Montgomerie said that even though the economy is uncertain, the demand for these products should be strong by nature.

If the agricultural sector keeps doing well, it should help rural areas because many companies hire locally. Bei said that this helps local economies in a big way.


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