Sunday, August 14, 2022

Making size count as NZ’s giant state-owned farmer

Pāmu CEO Mark Leslie says the state-owned farmer aims to achieve certification on all 110 of its farms by 2024.

The Hamilton-based chief executive of New Zealand’s biggest farmer believes it can play a critical role in this space as the nation’s farmers grapple with pending legislation around climate change and biodiversity as well as coming to terms with freshwater regulations.

It is here Leslie sees Pāmu playing a vital role for the country.

“The opportunity for me, whether it’s He Waka Eke Noa, water regulations, biodiversity – whatever those are – the opportunity for Pāmu is to not only manage it on our own behalf, but provide a bit of leadership in the ag sector.

“We have scale, we have size, we can trial a few more things that the average farmer can’t.

“It’s something that I’m passionate about, our ability to be not only a profitable farming business but to be able to say, ‘We’re going to trial these one or two things. If it’s successful it will be good and we can share that with all farmers,’ ” Leslie says.

Leslie has been Pāmu CEO for four months, having taken over from Steve Carden, who drove a lot of changes within the government-owned entity’s strategic direction.

He says he wants to continue on that path while adapting to farming’s changing environment.

If a trial works on a sheep and beef farm in the East Coast of the North Island as well as in Southland, it is likely it would work elsewhere in the country. This is going to be a core principle that will drive Pāmu over the next three to five years, he says.

“We need to be profitable, but we need to make sure we are supporting those changes.”

There are also consumer opportunities within all of these new regulations, such as supplying Silver Fern Farms with zero carbon beef. 

It will also mean Pāmu will keep monitoring its land use and adapt to changes.

Pāmu shares in the challenges of the rest of the sector, but has the scale to test new strategies to cope with these, CEO Mark Leslie says.

Pāmu owns 110 farms, producing milk, beef, sheep meat, wool, venison, deer velvet, carbon credits and timber, and speciality crops.

Near Kerikeri, for example, a Pāmu-owned farm is being converted to grow avocados, land within some of the beef farms may be utilised to run dairy beef cattle and there will continue to be some areas on some poorer land classes that are converted for forestry.

Prior to becoming Pāmu CEO, Leslie spent three years at Silver Fern Farm as its chief operating officer and over two decades years at Fonterra in various roles, including head of the operations and supply chain component of the brands business in NZ. He also previously had responsibility for the operation of the 94 ingredients plants across Fonterra’s 27 sites along with the associated milk collection activities.

He has held several board and ministerial advisory roles and chaired the Fonterra and Silver Fern Farms joint venture company Kotahi, which provides freight logistics solutions to a number of key NZ exporters and importers, for six years and the Pastoral Greenhouse Gas Research Consortium.

He holds a Bachelor of Agricultural Science (Hons) and a Master’s of Business Administration (with Distinction), both from Massey University, and grew up on a dairy farm in Reporoa on the North Island’s Central Plateau.

He says Pāmu’s size and scale and the quality of its stock has long made it stand out in the meat industry.

“With their scale they were a very good supplier,” Leslie says.

Pāmu’s farms are facing the same issues that have affected the rest of the primary sector over the past 12-18 months – covid-induced worker shortages and high input costs. But it has also enjoyed equally high returns.

“Labour and recruitment is challenging, but in saying that we have a good team in place to start the season with,” Leslie says, noting that some of its farms have not been affected by covid.

Pāmu’s fertiliser bill has doubled over the past 18 months and its also been affected by the lack of meat processing space. This forced Pāmu to sell more of its stock as store in autumn because it knew it would be struggling to get that processing space.

Pāmu’s dairy farms are having issues securing space with processors for its bobby calf collection with calving well under way.

“We are nervous,” Leslie says.

Many of the plants that process calves are three to four months on since the first covid wave went through them, and if it goes through those plants again while calving is still occurring, it is going to be challenging.

“We are rearing an extra 3000-4000 four-day-old calves down on our Wairakei unit, but there’s still a number that will be sold and we’re relying on the processors being able to operate plants.”

But he readily acknowledges Pāmu has the advantage of scale ,which other farmers do not have – “and my challenge is to make sure we do use that scale”.

For example, if a particular region has challenges such as a climatic event, Pāmu has the ability to shift stock and feed around to manage it.

“We run a lot of dairy beef animals and how do we connect up the dairy and the livestock operations to seamlessly flow those calves from our dairy to our beef operations? And that’s the advantage of scale.”

What has stood out for him so far is the calibre of the people in the business.

“There are some amazing people in there and if I look at the farm managers we have, there’s some real talent there in terms of their day-to-day farming skills.”

The staff sometime cop a hard time from their peers because of who they are employed by, but they are as commercially focused as any other farmer, Leslie says.

“Yes, they might have a larger corporate sitting in behind them, but they’re passionate farmers and they get impacted like anybody else with the weather and regulatory changes.”

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