The original Big Sky dairy farm development, near Patearoa,
in the Maniototo, in the early-2000s. Photo supplied.
The United States-owned Big Sky dairy farm on the
Maniototo has booked a more than 50% decline in profit, but is
continuing to expand with acquisitions in the district and
increases to its nearly $13 million herd.
Big Sky was purchased out of receivership by the
multibillion-dollar Harvard University endowment fund in late
2010 for $32 million. Its total asset value in its full-year
financial report to June last year has risen 11% to $60.4
million from $54.3 million the previous year.
Its present valuation on land, buildings and improvements has
increased from $30.7 million to $33.4 million, which includes
water rights valued at $7.6 million.
The dairy operation is one of New Zealand's largest. Harvard
fund managers do not comment on annual financial results.
Harvard has developed Big Sky to its controversial concept
size of profitably milking more than 6000 cows. At June last
year, Harvard's subsidiary DF1 Ltd and its group subsidiaries
were milking 6641 cows, compared with 6318 the year before on
about 2350ha, on the farms Helenslea, Alnwick, Tercio and
Saran. The herd is valued at $12.9 million.
The full-year report, filed with the Companies Office on
Christmas Eve, said DF1 acquired the farm assets of Dogterom
O'Callaghan Ltd, a Puketoi Runs Rd leased-farm, for $2.5
million, including $1 million for stock and $1.23 million in
Fonterra shares; all of which still requires Overseas
Investment Office approval. Harvard's investment in Fonterra
shares is up 15% at $9.1 million.
During the year, DF1 acquired a 20% interest in the Maniototo
East Side Irrigation Co Ltd, plus board representation
through a related party.
The financial report showed DF1's operating revenue declined
3.4%, from $11.3 million the previous year to $10.98 million
for the year to June. It appears rising farm expenses and
administration costs contributed to a 55% decline in
after-tax profit, from $4.33 million the previous year to
While the overall decline in operating revenue was offset by
increasing livestock sales by more than $500,000 to $900,000
for the year, its ''sale of goods'', or milk, was down more
than 8% from $10.9 million to $10 million. Rising costs
included farm expenses, up by $1.21 million to $8 million,
and administration, up more than $400,000 to $1.86 million.
DF1 Ltd was incorporated in the Cayman Islands and registered
in New Zealand as a branch of an overseas company. The
''group'' financial results reported represent DF1 and its
99%-owned subsidiary Dairy Farms Partnership.
2011-12 dairy season statistics
• Around the country 11,798 herds run 4.6 million cows.
• National average herd is 393; in the South Island, 596; in
• 500-plus cows in 10% of herds.
• 105 herds bigger than 1500.
• 50 herds have more than 1900 cows.