Nutrien's big balance sheet helping Aussie ag ride out drought

Rob Clayton is keen to convince staff, customers and others watching the agricultural services company there's no shame, and heaps of advantages, in being part of the world's biggest rural reseller business - Canada's $30 billion Nutrien.

"We have a strong parent company with a big balance sheet and access to capital, and it wants to invest and contribute to Australian agriculture," the managing director said.

"Investment in agriculture has been a long term issue for Australia and this is the sort of investment backing our industry and rural and regional communities need."

The scale achieved by bundling two of Australia's top three farm services players into one business, owned by a parent with a sole focus on agriculture, would drought-proof the new operation's staffing numbers, and fund new technology and commitments to regional communities.

The combined Landmark-Ruralco entity directly employs 4500 people in regional Australia, based in about 840 locations.

While drought in eastern Australia, particularly NSW, had savaged Landmark's recent sales figures, drained town and farm water supplies and decimated customer's livestock numbers across NSW and Queensland, "we are fully committed to our staff and clients in those areas".

"Without wanting to be disrespectful to all those producers who have agonised over whether to sell their livestock or keep feeding, we've already made the decision - we're feeding through," he said.

"And we're proud to have the balance sheet to be able to do that.

"We love our staff like farmers love their livestock and we want to keep them."

Addressing the Farm Writers Association of NSW, Mr Clayton said while new digital technology platforms from the North American parent company were being rolled out in Australia, and other investments would help make Landmark a 24-7 business, Nutrien did not see the agricultural world revolving around online services.

It was committed to keeping a bricks and mortar branch business presence in Australian rural communities.

And there were "categorically" no plans to quit the livestock or financial services agency side of the business, despite the company's overseas operations being based largely on selling cropping inputs.

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"The North Americans are very aware what makes the Australian market tick and the wide ranging seasonal challenges here," he said.

"They know that's why livestock and insurance are part of our business model - to keep it sustainable."

Part of the global company's commitment to Australia was a $15 investment in a livestock data processing platform to help farmers tap and understand deep background data on breeding and meat yield performance to help their buying decisions.

In Western Australia $5m was being spent to improve the company's fertiliser distribution facility throughput efficiency, ensuring trucks could be handled faster and get product on farm sooner.

New digital applications would enable agronomists to order specific fertiliser blends from the paddock, reducing delivery delays.

Mr Clayton said Nutrien had made it clear Australia and Brazil were the focus of the company's global growth agenda, regardless of current seasonal challenges.

"The whole management team, from CEO Chuck Magro down, have farming backgrounds - they understand the industry, the weather, and the end customers," he said.

Despite its challenges Australia was pulling its weight, with Landmark alone contributing 14 per cent of Nutrien's global revenue.

However, there was no denying the current drought was biting.

Landmark's crop chemical volume sales were down 40pc and fertiliser volumes down 45pc this season in central NSW where only 25pc of the winter crop had been planted and yields were tipped at just 10pc of the 10-year average.

Northern NSW was anticipating the lowest summer crop planting on record and Australia's total cotton planting area was likely to be less than 100,000 hectares, compared with a 10-year average of 350,000.

NSW sheep numbers in June were 3 million below a year earlier and August cattle numbers in the state were down 1m on the same time in 2018.

"There is definitely going to be an impact on our business, but we are committed to this game and to keeping country towns living," Mr Clayton said.

He noted the company's recent three-year commitment to funding for crisis support service, Lifeline, and $2m in "micro-level funding" made to community sporting clubs, the Country Womens' Association and other rural organisations, many of which were also supported by vast numbers of Landmark and Ruralco volunteers.

"Our people are, in fact, the jewels in the crown of this business," he said

"We think Landmark and Ruralco coming together will give us the commitment and expertise across rural and regional Australia to keep agriculture sector businesses and communities alive."

Mr Clayton's sentiments on scale and change in agribusiness were supported by Syngenta territory head for Australia and New Zealand, Paul Luxton.

"I'm a big believer in scale being good," he told the Farm Writers forum, acknowledging his own global crop inputs company had also been part of a rash of recent farm chemical business super mergers.

Merger activity enabled farm-focused businesses to diversify their know-how, falling back on bigger balance sheets to fund research and development and tough out the difficult times, while continuing to deliver substance to rural communities.

"I think the Landmark-Ruralco business looks to be in good hands."