Running a stronger Agribusiness: What drives performance and resilience?

Agribusiness is at the heart of New Zealand’s economy, with farming and rural enterprises playing a critical role in supporting communities and driving exports. However, the sector operates in a dynamic environment shaped by global commodity prices, climatic conditions, regulatory changes and evolving sustainability expectations.

For many agribusinesses, success depends on balancing operational performance with strong financial management and long-term planning. Whether managing seasonal cash flow, planning for succession or responding to market uncertainty, taking a proactive and informed approach is key.

 

“For many agribusinesses, the challenge is not just responding to what is happening today, but building the financial visibility and resilience needed to make confident decisions for the seasons ahead.” - Dallas Peters, National Agribusiness Sector Leader

 

Operating in a complex and changing environment

Agribusinesses are navigating a range of external pressures that can directly impact profitability and long-term sustainability, including:

• Volatility in commodity prices
• Changing environmental and regulatory requirements
• Rising input costs, including feed, fertiliser and labour
• Interest rate and financing pressures
• Workforce availability and capability

These factors can create uncertainty and variability, making it essential for businesses to maintain strong financial visibility and flexibility.
 

“The most successful rural businesses are often those that understand their numbers early, review them regularly and are prepared to adjust when market, weather or regulatory conditions change.” – Dallas Peters, National Agribusiness Sector Leader

 

Cash flow and seasonal financial management

Cash flow management is a critical focus area in agribusiness due to the seasonal nature of income and expenses.

Considerations may include:

• Forecasting seasonal cash flow - Understanding when income will be received and expenses incurred helps avoid shortfalls during quieter periods. Forecasting should factor in production cycles, payout timing and cost fluctuations.
• Managing working capital - Input costs often need to be paid well in advance of receiving income. Managing payables, receivables and inventory effectively can help maintain liquidity.
• Planning for variability - Weather events, pricing changes and production shifts can all affect cash flow. Building contingency into financial planning can help reduce pressure.
• Monitoring performance regularly - Regularly reviewing budgets against actual performance allows for early course correction if conditions change.

 

Farm performance and profitability

Improving farm performance requires a clear understanding of both financial and operational drivers.

Focus areas could be:

• Cost of production and margin analysis
• Benchmarking performance against similar operations
• Productivity and efficiency improvements
• Investment in technology and systems
• Alignment between operational strategy and financial goals

Clear performance reporting enables better decision-making and helps identify opportunities to improve profitability over time.
 

“Strong performance starts with knowing what is driving profitability at a practical level, from cost of production and productivity through to funding, systems and long-term investment decisions.” – Dallas Peters, National Agribusiness Sector Leader

 

Succession planning and business continuity

Succession planning is a key consideration for many farming families and rural businesses. Transitioning ownership or management can be complex, particularly where family dynamics are involved.

Effective succession planning typically includes:

• Early conversations and clear communication
• Understanding the goals of all parties involved
• Structuring ownership and governance arrangements
• Managing tax implications and funding requirements
• Ensuring business continuity during transition

Well-planned succession can help protect both the business and relationships, while supporting long-term sustainability.
 

“Succession planning works best when it begins before a decision is urgent. Early conversations give families and business owners more options, more clarity and a better chance of protecting both the business and the relationships behind it.” – Dallas Peters, National Agribusiness Sector Leader

 

Tax and structuring considerations

Tax plays a significant role in agribusiness and should be considered as part of ongoing planning, not just compliance.

Areas to consider include:

• Farm structure and ownership -The structure of a farming business can affect tax outcomes, asset protection and succession planning.
• Timing of income and expenditure - Managing the timing of income and expenses can help smooth taxable income and align with cash flow.
• Capital investment decisions - Investment in land, livestock, plant and equipment can have tax implications that should be considered in advance.
• Compliance and regulation - Keeping up with changing tax rules and regulatory requirements is essential to avoid unexpected liabilities.

Taking a proactive approach to tax planning can support better financial outcomes over time.

 

Sustainability and long-term resilience

Sustainability is becoming an increasingly important focus for agribusinesses. This includes not only environmental considerations but also financial and operational resilience.

Focus areas could be:

• Environmental compliance and reporting
• Land and resource management practices
• Efficiency improvements to reduce input costs
• Long-term planning for changing conditions
• Aligning sustainability initiatives with business strategy

Businesses that embed sustainability into their operations are often better positioned to meet regulatory expectations and maintain stakeholder trust.

 

Managing risk in agribusiness

Risk is an inherent part of farming and rural operations. Identifying and managing these risks can help protect profitability and long-term viability.

Common risks are:

• Weather and climate variability
• Commodity price fluctuations
• Biosecurity threats
• Regulatory changes
• Financing and interest rate exposure

A structured approach to risk management allows businesses to plan for uncertainty and respond more effectively when conditions change.
 

“Risk will always be part of agribusiness, but the businesses that plan for uncertainty are usually better placed to respond quickly, protect cash flow and stay focused on their long-term goals.” – Dallas Peters, National Agribusiness Sector Leader

 

Improving visibility through reporting and systems

Timely and accurate financial information is critical for agribusiness decision-making.

Areas to consider include:

• Regular financial reporting and analysis
• Farm budgeting and forecasting
• Integration of farm production and financial data
• Use of digital tools and systems to improve efficiency

Better visibility enables more informed decisions and supports stronger financial control.

 

Common challenges across the sector

While every agribusiness is different, several common challenges can affect performance:

• Cash flow pressure - Seasonal income and rising costs can create liquidity challenges if not carefully managed.
• Limited financial insight - Without clear reporting, it can be difficult to identify performance trends or risks.
• Succession complexity - Family dynamics and ownership structures can complicate transition planning.
• Regulatory pressure - Meeting environmental and compliance requirements can increase operational complexity.
• Market volatility - Changes in commodity prices can significantly impact revenue and profitability.

Recognising and addressing these issues early can help strengthen resilience and long-term performance.

 

Where specialist advice can add value

Agribusinesses often benefit from practical advice tailored to the realities of the sector.

Support may include:

• Farm financial management and budgeting
• Cash flow forecasting and funding support
• Tax planning and structuring
• Succession and governance planning
• Benchmarking and performance improvement
• Sustainability and compliance advisory

Access to BDO’s experienced advisers can help businesses navigate complexity and make more confident decisions.

 

Final thoughts

Agribusinesses operate in a fast-changing and often unpredictable environment. While this creates challenges, it also presents opportunities for those who are well-prepared.

Strong financial management, proactive planning and a clear understanding of risks and opportunities can help agribusinesses build resilience and position themselves for long-term success.
 

“With the right advice and information, agribusiness owners can move from reacting to uncertainty to actively shaping a more resilient and sustainable future for their business.” – Dallas Peters, National Agribusiness Sector Leader