Ashburton's homegrown farming co-operative announced a $2.1-million loss for 2023 in its 60th annual meeting, as tough times on-farm tightened farmers wallets.

Ruralco started its July 2022 - June 2023 financial year with a growth strategy but changed tack in January when revenue targets were not achieved.

Board chair Sir David Carter said the original sales targets were not met due to farmers reducing their spending as a result of the economic downturn.

"We then adjusted our strategy and the cost structure of the business - and this included an adjustment to staff numbers."

Carter declined to comment on how Ruralco's financial results had compared to its budget forecast, saying it was not public information.

He said the 2023 financial year has been challenging for agriculture and for Ruralco, with the co-operatives business closely intertwined with farmers’ businesses.

Ruralco ran at a close to a $3-million loss before a tax credit reduced that to $2.1m. Carter said the tax credit was provisional tax paid throughout the year based on projected earnings.

In 2023, Ruralco spent an additional $1-million in salaries and wages and an $1.8-million more in other operating expenses compered to the 2022 year.

Interest costs were also a lot higher. Carter said this was due to combination of increased debt, and the increase in interest rates.

“Like many organisations servicing the rural community, we have also been impacted by rising interest rates, high inflation and input costs, and bad debt - while also remaining committed to ongoing projects necessary for the long-term viability of the business.

“The challenge has been to respond and adjust to these changes and commitments, resulting in our business moving from a growth strategy to a more consolidated approach, which has seen Ruralco consider all costs wherever necessary.”

Ruralco last ran at a loss in 2016 with a loss of $297,000.

This year, turnover was $293.3m, up from $279.1m last year. Gross profit was the same as last year ($12m), while group equity was slightly down at $15.2m, compared to $17.3m in 2022.

Carter said Ruralco’s business model remained robust and competitive despite this year's loss.

Two new directors were welcomed to the board and Carter retired by rotation and was re-elected to the board.

David Barron, the managing director of Christchurch-based Nectar Group and director of farming enterprises, Tallarook Dairies and Rahi Partnership was elected along with Mid Canterbury dairy farmer and former UK lawyer Kate Beaumont-Smith.

Prior to the board election the number of shareholder elected positions was increased by five to six, creating an additional vacancy.

By Sharon Davis