Landcorp - Crown Ownership Monitoring Unit

LANDCORP FARMING LIMITED AND SUBSIDIARIESNOTES TO THE FINANCIAL STATEMENTS CONTINUEDNote 7 – Milk RevenueRefer to the Balanced Scorecard on pages 17 to 22 for milk production information and Note 24 for a description of dairy livestock.Milk income during the year was:Group Group Parent Parent2010 2009 2010 2009$000 $000 $000 $000Milk RevenueTotal value of milk produced 71,538 55,946 54,532 42,524Sharemilker share of milk production (1,345) (1,782) (1,345) (1,782)Total Milk Revenue 70,193 54,164 53,187 40,742During 2009/10 two of Landcorp’s dairy farms were operated by sharemilkers (2009 two farms). All sharemilker farms are milked on a 50/50sharemilking agreement. Under the agreements, Landcorp provides land, buildings and dairy shares, and the sharemilker provides livestock andincurs the farm operating expenses. Revenue is shared equally between Landcorp and the sharemilker.The composition of milk revenue changed during 2009/10 as one of Landcorp’s major customers, Fonterra, changed from a total price basis toa split-payment basis. Under the new payment structure Landcorp received a payment for the value of commodity milk supplied and a separatepayment reflecting the investment in the value-add activities of Fonterra (Group $1.4 million, Parent $0.9 million).Milk revenue increased by $16.0 million (30%). This is almost entirely due to the increase in the payout for milk solids. Production in 2009/10 wasimpacted by drought conditions in the upper North Island (refer Note 20) but overall milk production was 3% higher than 2008/09.Note 8 – Wool RevenueGroup Group Parent Parent2010 2009 2010 2009$000 $000 $000 $000Revenue from wool sales 6,482 6,213 6,464 6,198Profit/(loss) on change of wool inventory (568) (193) (568) (193)Total Wool Revenue 5,914 6,020 5,896 6,005Refer to the Balanced Scorecard on pages 17 to 22 for wool production information.Wool is valued at estimated net market value at time of harvest. Wool revenue for 2009/10 is largely similar to 2008/09. The wool price continuedto languish over 2009/10 with similar production volumes as 2008/09.Note 9 – Forestry RevenueRefer to the Balanced Scorecard on pages 17 to 22 for forestry production information and Note 25 for a description of forestry activities.Landcorp’s forestry revenue comprised:Group Group Parent Parent2010 2009 2010 2009Note $000 $000 $000 $000Forestry sale proceeds 1,225 1,216 1,225 890Book value of forestry sold/harvested 25 (588) (1,190) (588) (791)Profit (loss) from forestry sales 637 26 637 99Forest growth 25 1,179 1,070 1,167 1,054Allocation of carbon credits 27 777 – 777 –Afforestation grant scheme receipts 142 – 142 –Total Forestry Revenue 2,735 1,096 2,723 1,153Forestry revenue for 2009/10 was increased from 2008/09 due to improved sales prices and lower costs of sale.During 2009/10 Landcorp received an allocation of New Zealand Units (“carbon credits”) for a portion of its post-1989 forests (refer Note 27)and income from the Afforestation Grant Scheme.66