The first eight months of Kelvin Wickham’s time at the helm of Ballance have been a bit trickier than he would have liked.
International fertiliser prices were high and even as they fell, the co-operative had a fair bit of inventory to get thorough.
“Just like all our farmers and growers out there, we would see the higher interest rates. We had to take that into account and manage our debt levels down, carrying the inventory through.
“So that took a bit more time than I expected. And I’m really pleased to see we’ve come through our financial year in a strong position. The balance sheet’s in a good place, we’ve paid down some debt. And most importantly, we cleared a lot of that high-priced inventory. And you’ve seen that reflected now – being able to pass on those lower prices.”
The highs and lows of international commodity prices are nothing new to Wickham, though.
At Fonterra he held a number of roles that included working in international markets and here at home with its farmer-shareholders.
“I really enjoyed that aspect of bringing the goodness of New Zealand dairy to the world.”
During that time Wickham was based in Singapore, Germany and China, and his last role was working in Amsterdam across a wide region of the Americas, the Middle East, Europe, Africa, Japan and Korea.
“I was out there in the world trying to do my best for New Zealand farmers, but at the same time you’re still connected really strongly to New Zealand.
“When you come back and talk to farmers and growers at some of the shed meetings you have, you get real direct feedback. I’ve always enjoyed that part. New Zealand’s in your heart while you’re out there doing your best in the world.”
Being so close to the consumers buying NZ dairy emphasised the importance of our brand story, Wickham said.
“I think that helps you get a perspective on why it’s important, why we’ve really got to protect New Zealand from biosecurity incursions, protect the brand reputation and ensure that we actually deliver on the promise of high environmental standards.
“When they see our product on the shelves, they read about New Zealand, when they see the logos and the brands that we have out there across the food and fibre sector, it comes with an inherent stamp of quality. We do have to be conscious of that and make sure that we deliver on that promise.
“More and more it’s not about what you say – they’re looking under the covers, they’re checking, they’re looking on the internet to see if you are delivering that.”
Ballance has a massive role to play in ensuring that story rings true, he said.
“We sell plant food and without wanting to be too punny you need to get the balance right in terms of how much you put in and using it correctly.”
And with increasing regulation of the amount of fertiliser farmers can apply, Ballance is now much more than a retailer – it’s an adviser and data manager as well.
The right products must be there for farmers, of course, but Ballance’s strategy isn’t just selling as much of it as possible.
“It’s more about helping add value to the farmer and grower. We have to make sure we’re relevant to our customer-shareholders, farmer-growers. That starts with doing the basics right – making sure you have the fertiliser available when they want it, in the right format.
“But more and more it’s about precision. We’re actually comfortable with people using less if they’re using it well and they get better yields from it.”
Efficiency and yield are the focus of one of the co-operative’s big research and development projects. A $25 million partnership with the Ministry for Primary Industries is looking at farming practices and waterways can be better protected through more efficient nitrogen and fertiliser use.
While many farmers and growers are doing it tough right now, Wickham is confident about food production’s future, if we approach it right.
“I feel it’s really going to have to be a value play. We’re going to have to help our farmers and growers produce quality food to chase premium markets and premium segments in those markets. That’s either through brand presence or the top class ingredients inside or the wonderful products we’ve found on the chef’s table.
“Our part in that story is top quality nutrients. It’s never a straight line and all the sectors have their moments. We have a heavy reliance on China and the US, the two big key markets and they have their ups and downs. That will continue.
“Obviously there’s a lot more life coming through in the dairy sector at the moment. Sheep and beef will follow.
“No one’s going to select New Zealand products because it’s some right that we have. We have to support across the value chain and fight hard in those markets day in, day out.”
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