Ravensdown Fertiliser Co-op chief executive Rodney Green said even with the 13% lift in New Zealand company sales last year, farm productivity could not be maintained.
"Until we get back to a total market of 2.7 to 2.8 million tonnes, we're not even at maintenance," he said in an interview.
Mr Green was releasing his company's annual result, which showed a strong performance, with a trading profit of $43 million in the year to May 31, up from $10 million the year before.
The 1.3 million tonnes of sales compared with 1.081 million a year earlier but well down on 1.45 million in 2007-08.
The operating revenue was down slightly at $834 million ($892 million in 2008-09), but operating cash flow was in the black at $126 million, compared with a negative $21 million the previous year.
Net assets grew from $296 million to $316 million, but the profit before tax and rebate was down slightly at $27 million ($36.1 million in 2008-09).
Ravensdown will pay shareholders a rebate of $13 for every tonne of fertiliser sold, the amount reduced by a one-off $4.5 million hit from the Government's new building depreciation charge.
Sales through its Australian business grew 54%, or 82,000 tonnes, during the year, but some one-off issues meant an operating loss of $6 million, compared with a $15 million profit the previous year.
Mr Green said a ship carrying Ravensdown product destined for West Australia ran aground off Casablanca, Morocco, initially creating delivery issues. By the time it had arrived, the product had spoiled and the case was the subject of an insurance claim.
In the past few years, more than 80,000 tonnes of superphosphate made at its Dunedin plant at Ravensbourne had been exported to Australia, and trade was set to increase with growing demand, Mr Green said.
During the year, fertiliser prices came off their peaks; urea fell from $1111 a tonne in 2008-09 to $620; and superphosphate has fallen $249 a tonne since December.
Looking ahead, Mr Green said farmer support was growing in Australia and in the coming year Ravensdown intended accelerating its establishment in Queensland.
There were also signs New Zealand farmers would spend more on fertiliser in the coming season.
