Weekly Agribusiness News Recap

By: "Farm Tender" News
Hay & Fodder News
Mar 15, 2019
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By Georgia Devenish - Agricultural Research Analyst at JLL.

Cropping

Australian barley exports to China in January 2019 dropped 58 percent on December 2018 figures. This points to China's unofficial moratorium on imports of Australian feed barley as it reviews submissions into its anti-dumping investigation tied to Australian barley pricing, and also its steady demand from Australian malting barley.

Data published by the United States Department of Agriculture (USDA) this week highlights the modest outcomes to be expected for Australia's 2018/19 summer crop production. The USDA estimates Australia's overall sorghum yield is down 16 percent on the five year average to 2.41 tonnes per hectare with total harvest quantity falling to 1.3 million tonnes.

Livestock

According the the Australian Lot Feeders Association, 2018 was the first time in history that cattle on feed remained above 1 million head for the entire year, while grain fed beef exports broke 300,000 tonnes shipped weight for the first time in a calendar year. Feedlot utilisation sat above 85 percent for the majority of the year.

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Sheepmeat exports rose 35 percent year-on-year for the month of February, with exports of mutton to China up 74 percent. Year to date, sheep slaughter has increased 20 percent on 2018 according to Meat & Livestock Australia.

Horticulture

The Australian Macadamia Society has stated the retail price of macadamias has doubled over the last ten years to reach approximately $50 per kilogram. The industry body expects volume of nuts sold in the domestic market this year will surpass last year's record of nearly 4,000 tonnes.

Wine/Vineyards

Weilong Grape Wine Company, China's third largest winemaker, has begun crushing grapes at its new $75 million facility at Yatpool, Victoria. The winery's initial crush will be 25,000 tonnes of mainly red wine grapes for production and export to the Chinese market. Winery manager, Andrew Allen, has said that the winery will have the capacity to reach 170,000 tonnes in the longer term, although current council approval is limited to 80,000 tonnes.

Water

Plans to create Western Australia's next agriculture hub in the Kimberley are underway. The Department of Water and Environmental Regulation has advised stakeholders that up to 600 gigalitres of surface water was considered being made available in the Fitzroy River catchment. Although only a fraction of the 1,700 gigalitres suggested in a CSIRO study released last year, 600 gigalitres would be a significant start towards development in the region.

Agribusiness

AACo has reported an estimate of at least 42,000 head of cattle have died on its four Gulf properties as a result of the recent floods. The infrastructure damage bill has been estimated to total $6-8 million.Conversely, ongoing extreme seasonal conditions in south-western Queensland and the Barkly Tablelands in the Northern Territory are contributing the extra drought fodder, transport and feeding routine expenses which are likely to cost the company approximately $57 million this financial year.

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Hong Kong listed investor First Pacific stands to lose $396.1 million on its four-year part ownership of Australian oils, bread and spreads company, Goodman Fielder, after agreeing to sell its 50 percent stake in the business to joint-venture partner Wilmar International for $US300 million.

Wilmar and First Pacific paid $1.37 billion for the then ASX-listed Goodman Fielder in 2015. The company's brands include Helga's, Mighty Soft, White Wings, Praise, Meadow Lea, Crisco and Pampas.

Investment

Potato processor McCain's has announced plans to spend $37 million upgrading its Smithton factory in Tasmania's North West. However, growers say that without a price increase the company may struggle to convince some growers to continue growing potatoes.

Wide Open Agriculture, a regenerative agricultural company that grows vegetables, is looking at Moora and Merredin in Western Australia as potential sites for a 2 hectare shadehouse which would be four times larger than its existing Arthur River facility. Production is slated to commence in 2020, pending construction to begin by the end of 2019..

The company is likely to be planting snack variety tomatoes, capsicums and cucumbers. Meanwhile, they have plans to use the Arthur River shadehouse for hemp trials. Wide Open Agriculture was listed on the ASX in September 2018.

Property

A South Korean family-controlled company has paid between $20-25 million for the "Warragundi Aggregation" in New South Wales' Mudgee region. The walk-in walk-out transaction for the grazing and cropping land has been approved by the Foreign Investment Review Board and the purchase signifies the company's first foray into Australian agriculture.

Daybreak Cropping purchased the "Kinbeachie Aggregation" at Toobeah in Queensland for a rumoured $25 million from One Tree Agriculture in January 2019. The properties cover 9,192 hectares in total with 7,350 hectares of dryland cropping.

Daybreak Cropping was established as a result of a partnership between Warakirri Asset Management and the Public Sector Pension Investment Board. The "Kinbeachie Aggregation" is the fourth aggregation Daybreak has acquired, joining "Catumnal Farms" (northern Victoria), "Waddikee Farms" (southern Western Australia), and "Caringbah Farms" (south western slopes of New South Wales).

Other

On Monday it was announced London-based CD Capital Natural Resources Fund has put in a $40.5 million takeover bid for Verdant Minerals, which owns one of Australia's largest deposits of phosphate. The small resources company is encouraging shareholders to vote in favour of the bid which represented a 113 percent premium to the company's current share price.

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Research

A study conducted by the University of New South Wales has suggested that water supplies are shrinking at the same time as climate change is generating more intense rain. Professor Ashish Sharma, who led the team in the most exhaustive global analysis of rainfall and rivers, pointed to the drying of soils as the cause of reduced water flow into catchments.