Agribusiness News Weekly Recap

This article is bought to you by Marson Industries Australia and Molloy Contracting.

By Georgia Devenish - Agricultural Research Analyst at JLL

It appears the severe drought in eastern Australia has taken another casualty, this time in the form of Blue Sky's 'Premium Beef Development' fund which has begun winding up operations. Kim Morison, managing director at Argyle Capital Partners, which oversees the fund, cited the fact that, "The drought conditions have been far worse than we would have ever expected." He said the decision had been made to exit the venture "rather than trying to tolerate another year of drought".

Launched in 2017, the fund had the aim of breeding 6,000 Wagyu cattle annually and market the meat toward expanding premium markets, including China. It is understood Blue Sky had estimated the whole venture could be sold in nine years for $62 million. It had targeted returns exceeding 17 percent per annum on investor capital.

Oakey Beef Exports have had their development application for a new cold storage facility approved by the Toowoomba Regional Council. Oakey Beef Exports is a major abattoir facility located in the Darling Downs region of Queensland. The proposed expansion will add an additional 2,496 square metres gross floor area comprising additional chiller and frozen storage capacity, automated storage retrieval systems, an automated air blast freezer and a robotic palletising system.

The Australian arm of Canada's Public Sector Pension Investment Board - PSP Investments - has put forward a bid for ASX-listed agribusiness, Webster Limited. Hinging on FIRB approval, the $854 million offer for the extensive portfolio of irrigated farmland and water rights could see the company de-listed and assets carved up between a proposed new entity, KoobaCo, existing private businesses and joint venture operations. PSP Investments currently holds a 19.1 percent share in Webster Limited. Other major stakeholders, Belfort Investment Advisors and Verolot Limited, hold 12.5 percent and 10.7 percent shares in the business, respectively. These two entities will be offered 50.1 percent of KoobaCo.

Ad- For the best Agricultural Tarps in the business call Marson Industries Australia - Ad
Ad - Need Windrowing, Baling and Carting? Central NSW, call Molloy Contracting - Ad

PSP Investments has been active in the Australian agribusiness sector of late. Along with its investment in Webster Limited, the fund has investments in nuts through Stahmann Farms, cattle through a joint venture with the Hewitt family, and row cropping through a joint venture with the Robinson family. Other activities have included the acquisition of the BFB cropping business and an avocado joint venture with the Simpson family in Queensland.

Seeka has been steadily offloading its kiwifruit orchard portfolio in New Zealand over the past 18 months. Cumulatively, Seeka has returned approximately NZ$45 million from the sale of orchards in New Zealand's Northland region.

During 2018, Seeka sold and settled NZ$7 million of its Northland orchard portfolio. The orchards formed part of a portfolio the company had acquired through the purchase of T&G Global's KeriKeri post-harvest and orchard business. In the next six months (ending 30 June 2019), Seeka settled sales for a further NZ$5.4 million of its orchard portfolio.

In the period since 30 June 2019, Seeka has sold and settled NZ$28.75 million of its Northland orchard portfolio. This includes the recently announced agreement to sell a 20 canopy hectare Kerikeri SunGold kiwifruit orchard to Booster's listed Private Land & Property Fund for NZ$15.5 million. In a statement on the New Zealand Exchange, the company said a further NZ$5 million in conditional sales had been agreed, with settlement expected before 31 December 2019.

The first frozen beef shipment has left the Port of Townsville in Queensland in more than a decade. It is an achievement which the Port of Townsville hopes will be the beginning of a burgeoning new animal protein trade directly from North Queensland. Thomas Borthwick & Sons (Australia) Pty Ltd, a Mackay abattoir, is undertaking the trial at the Port of Townsville. Processing approximately 2,400 head of cattle per week and exporting approximately 30 containers per week, Borthwick's General Manager, Jason Delaney, said, "Townsville would give us a lot more flexibility and the distance is closer so overall it's going to give us a better turnaround.''

A proposed new $70 million abattoir development is getting closer to breaking earth at Port Pirie in South Australia. Announced in May, final approvals for the project are still being sought, however it is understood the company undertaking the development is confident construction will begin in coming months, with a view to commencing processing operations in late 2020. Pirie Meats Chief Executive Officer, Reg Smyth, said more than 1 million sheep and over a 100,000 cattle from South Australia were being slaughtered interstate, primarily Victoria, due to a lack of processing capacity within the state, a situation exacerbated by the Thomas Foods International Murray Bridge abattoir fire in January 2018.

Ad- For the best Agricultural Tarps in the business call Marson Industries Australia - Ad
Ad - Need Windrowing, Baling and Carting? Central NSW, call Molloy Contracting - Ad 

The federal government will provide up to $443,000 funding to support growers looking to develop protected cropping business in Western Australia, Northern Territory and Queensland. The Cooperative Research Centre for Northern Australia (CRCNA) will spend up to two years investigating how to best assist the establishment of commercial-scale protected cropping systems. Industry, Science and Technology Minister, Karen Andrews, said there are at least 15 CRCNA projects underway to develop and diversify agricultural across northern Australia. "With protected cropping being the fastest growing food producing sector in Australia, with a farm-gate value of around $1.8 billion each year, it makes good sense to look at how we expand its use in northern Australia," said Andrews.

A new report released this week puts the value of the fisheries and aquaculture industry to Tasmania at $1.5 billion. To put it in context, the figure is larger than any other jurisdiction and accounts for nearly one third of the national total. Tasmania also led the nation in terms of employment in the sector, with the state accounting for more than one in four seafood industry jobs. The report forms part of the 'National Fisheries and Aquaculture Industry Contribution Study' funded by the Fisheries Research and Development Corporation.

According to the Cellar Door and Direct-to-Consumer report 2019, published this week by Wine Australia, direct-to-consumer (DTC) wine sales reached an estimated $1 billion in 2018/19. Showcasing 9 percent year-on-year growth, DTC accounted for an estimated 17 percent of total Australian wine sales value. Analysis of the survey results suggest that the smaller the wine business, the greater its reliance on DTC for sales revenue.

The Winter Crop Performance Edition of 'Primary Industries and Regions South Australia's (PIRSA) Crop and Pasture Report' was released this week. The report estimated 3.84 million hectares have been sown with a forecast grain harvest for 2019/20 of 6.2 million tonnes, 23 percent down on the 10-year average of eight million tonnes, as a result of ongoing dry conditions. However, the forecast farm gate value for the 2019/20 crop is estimated at $1.8 billion, which is slightly higher than the previous two seasons despite the lower production.