Fertiliser co-operatives spread the joy

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The country's two farmer-owned fertiliser co-operatives, Ballance Agri-Nutrients and Ravensdown, have reported sound financial results in a year that saw prices plummet.

Ballance will pay shareholders a rebate of $15 a tonne, plus a $2.14 dividend, and Ravensdown's rebate will be $13 a tonne.

Ravensdown chairman Bill McLeod said sales increased 13 per cent in New Zealand and 54 per cent in Australia to a total of 1.299 million tonnes, reflecting the fall in world prices.

Farmers who were paying $1111 a tonne for urea last year were now paying $620, and superphosphate had fallen by $249 a tonne.

Pre-tax profit in the year to May had fallen to $27 million from the previous year's $36.1m, and $17m would be returned to farmers in the rebate.

While sales had improved in West Australia and Queensland, several "one-off issues" had meant a $6m loss in Australia.

He was concerned fertiliser applications in New Zealand remained "significantly" low.

"The early signs are that many of our shareholders now see the ability to return their fertiliser applications to maintenance levels and this should result in a significant lift in business commencing this spring."

Ballance reported sales rose 5 per cent to 1.2 million tonnes, producing a $21m profit and allowing a reduction in debt after a tough year in 2008-09.

Chairman David Graham said the equity ratio had returned to 65 per cent, from 50 per cent a year earlier.

"We listened to our shareholders, and acted to protect our farmers from the full force of the market," he said.

"We learned our lessons well in the previous year, working our way through various issues, and are now a lot smarter and more cost-efficient."

The co-operative reported a $6m loss a year ago, largely due to a $36.7m write-down in the value of its inventory, paying the price of holding its fertiliser prices as low as it could as it restocked in an increasingly costly international market.

"More has gone right for us this year than has gone wrong," chief executive Larry Bilodeau said.

"It's terrific to see the turnaround ... and the many changes that have been made for the better."

- © Fairfax NZ News