Wednesday, 20 November 2019 10:55

Johnstone bows out on top

Written by  Nigel Malthus
Outgoing Farmlands chair Lachie Johnstone. Outgoing Farmlands chair Lachie Johnstone.

When Lachie Johnstone first started on the board of Farmlands 19 years ago the rural services cooperative ran 32 stores with a turnover of $280 million.

When he formally stands down as chairman at this year’s annual meeting, later this month, it will be from an organisation with 83 stores and $2.5 billion in turnover.

“So it’s been a big change and the organisation has become a lot more sophisticated over all that time,” Johnstone told Rural News.

“But in the end the thing that actually matters is the quality of your people and it’s been a privilege to work with so many great people in what is a fantastic industry. We’ll never get everything right but one thing I’m pleased about is we’ve always tried.”

Johnstone said the last year had been challenging in its market uncertainty, with farmers managing “to keep their wallets reasonably firmly closed”.

He says farmers, particularly sheep and beef farmers but dairy farmers also, when there’s uncertainty are very cautious about how they spend their money.

However, he is now confident Farmlands is in good order with commodity prices high and the industry tracking well this season.

Johnstone joined the board of the then North Island-based Farmlands Trading Society in 2000. As chairman, he steered its merger with South Island-based CRT Co-operative in 2013 to form Farmlands Co-operative.

Johnstone says the merger was “a real positive” and the highlight of his time with the organisation, as it provided a geographical spread from Cape Reinga to Bluff which helped significantly and bought some “scale”.

Reflecting on the fact that many of the large players in the industry of 30 years ago had either been rolled into others or no longer existed, Johnstone said the merger was a pre-emptive move.

“While there was nothing worse than two organisations having to merge when both were under pressure, Farmlands and CRT were both in good shape at the time.

“We were two like-minded organisations both in good health and basically forward thinking enough to get on with it.”

However, he concedes that the nuts and bolts of seeing the merger through was also the negative of his time at the helm.

Despite there being no geographical duplication and no need to sell down doubled-up locations or rationalise staff, it was still a tough process.

“It’s been harder and slower than we anticipated but still definitely worthwhile.”

Johnstone, who says he is still passionate about governance, remains as chairman of the Wellington port operator Centreport, recently steering that to a $650 million settlement with its insurers following the 2016 earthquake. He will also continue his interests in a variety of educational and agricultural concerns.

Johnstone’s Waikato farm is in the hands of a manager, but he says he’s excited about the future of the sector and has just purchased more land in the last three months.

$1b revenue, but no bonus

In its annual results, Farmlands has reported net profit before tax and rebates of $8.4 million, on revenue of $1.1 billion for the year ended June 30. Total revenue has increased by 3.2% percent on the previous year.

Johnstone called it another positive result, against the backdrop of a subdued marketplace and challenging on-farm conditions, particularly in spring 2018. 

“Farming uncertainty has dominated short-term decision-making on farms across the country. 

“This has inevitably had an influence on our performance. However, our 2019 result represents a further step along the path of building resilience in our business.” 

However, the board decided not to distribute an additional bonus rebate to shareholders.

“We came to this decision extremely reluctantly. However, Farmlands is navigating its way through a big and very demanding change programme, Braveheart. 

“The board believes the decision not to pay a bonus rebate this year is prudent in light of the significant cash commitment to the Braveheart project and its ongoing impact on the business’ balance sheet and cash flow, compounded by sector uncertainty.” 

Rob Hewett will be replacing Johnstone as the new chair. 

“I’m handing over to Rob Hewett confident that Farmlands is in good heart,” said Johnstone.

More like this

Hewett to take charge at Farmlands

The intended chairman of Farmlands Co-Operative, Rob Hewett, expects to take over a business in good heart and well-placed for the future.

Changes ahead for Farmlands

Shareholders in the farm services co-operative Farmlands will be voting on the first big change to its constitution since 2013 at the annual meeting to be held in Hokitika on November 23.



Fonterra back in the black

Fonterra chief executive Miles Hurrell says 2019/20 was a good year for the co-op, with profit up, debt down and a strong milk price.

Strategy to reduce heifer mastitis

First calvers are more prone to mastitis than older cows. According to DairyNZ, farmers must choose a strategy that best suits their herd, farm team, and budget.


Helping grow farming’s future

John Jackson’s ability for future and critical thinking saw him deeply involved in the development of an agribusiness programme that…

Nothing sustainable without profit

Chair of Dairy Environment Leaders programme Melissa Slattery believes that sustainable farming is highly important to young farmers.

Machinery & Products

JD updates header line-up

John Deere has updated its entire header line-up for combines to include the new HDR Rigid Cutterbar Drapers, RDF HydraFlex…

Hybrid harvesters launched

New Holland has entered the world of hybrid headers, launching a new machine that blends its conventional threshing drum and…

» Latest Print Issues Online

The Hound


OPINION: This old mutt had to have a giggle at the dig Feds recently made at the Green Party in the…


OPINION: Your canine crusader was aghast to read that the prices of zucchini and cucumbers rose more than 30% in…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter