Landcorp expects a further big drop in its profit this year, due to the continuing slide in farm commodity prices, compounded by the high New Zealand dollar.
Landcorp's net operating profit for the past year fell by more than third from the previous year's record result, to $27 million due mainly to lower milk and log prices.
But chief executive Chris Kelly said it was still a satisfactory year, with its best milk production and lambing results. It will pay a $20 million dividend to the Government.
However, Mr Kelly said the outlook for the current year is far less promising and there are three reasons why.
He said there has been a further decline in commodity prices and Fonterra has again revised its forecast down to $5.25 per kilogram of milk solids.
Mr Kelly said there was also a record production year last year which is unlikely to be repeated this year and sheep meat prices have dropped back.
He said Landcorp's original budget of around $12 million net profit was issued two or three months ago, but that is probably now a bit optimistic.
Landcorp will review its forecast again at the end of October. It's the country's biggest farm operator, with more than 120 farms, from Northland to Southland.