The Finance Minister's forecasting tough financial times ahead for state owned farming company Landcorp.

The SOE returned a $4.9 million net profit last year, down from the $30 million it made the previous year.

Finance Minister Bill English has told Parliament Landcorp's returns are likely to drop further.

"Landcorp's one of New Zealand's largest dairy farmers, and as dairy prices have dropped considerably in the last 12 months or so, we'd expect Landcorp's probably going to make negative returns for at least the next year."

English has indicated land sales could be on the cards for the financially pressured state owned farming company. He said the Government won't sell Landcorp, but points out the SOE buys and sells farms all the time.

"You would expect in current conditions where it's making significant losses and has debt levels it needs to deal with, that it may well sell some farms."