Weekly Agribusiness News Recap

This article is bought to you by Wormhit and Extend Security.

By Georgia Devenish - Agricultural Research Analyst at JLL

N&A Group and Plunkett have entered into a new partnership which will see 100 percent of the fruit produced at N&A Group's orchards in Batlow, New South Wales, packed at Plunkett Orchards' new packing facility in Ardmona, Victoria. The new packing facility in Ardmona is a 20,000 square metre packing facility which has been built alongside its existing 25,000 square metre packing shed. The combined domestic market output from the new facility will be distributed exclusively by the N&A Group.

Both companies are vertically integrated. Plunkett Orchards also grows apples, pears, peaches and apricots across approximately 235 hectares of orchards. N&A Group have five apple orchards in the Batlow region. In terms of packing and distribution, N&A Group, has had a longstanding relationship with Plunkett Orchards, as well as other local producers including Pacific Group and Sunland Fresh Fruits.

Perfection Fresh has acquired Queensland-based Berry Yummy Marketing. The move will effectively result in Perfection Fresh controlling approximately 10 percent of the Australian strawberry market. This comes as part of the company's commitment to expanding its berry category. Berry Yummy Marketing's former owner, Ray Daniels, has joined Perfection Fresh in a dual role as grower liaison and also as a mentor to help establish best practice growing, logistics and packaging for this strawberry sector. Perfection Fresh also has plans to implement the commercial production of blackberries in the next 12 months to complete its berry portfolio.

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Montague, one of Australia's leading fresh produce companies, has commenced construction of a state-of-the-art upgrade to its operations. The $54 million project comprises a new packing and distribution centre. It will also feature a community engagement centre and a research and development orchard. Once completed, Montague expects the facility to double its annual production capacity to 29,000 tonnes of apples and 5,000 tonnes of stonefruit. Montague's general manager business development, Rowan Little, said, "It will speed up the process, particularly for export containers. We are thinking it will drop the time it will take to pack a container of fruit for export from three days to six hours." Construction of the facility is expected to be finished in late 2020.

Western Australia's biggest family dairy farming operation, Peninsula Downs, has entered into a management agreement with AgCap, a private company that until last year managed the Sustainable Agriculture Fund. Peninsula Downs owner, Ross Woodhouse, had approached AgCap and its chief executive officer, Wolfie Wagner, about a management deal after he decided to take a step back from the operations of the growing business, saying he had reached the age where he needed to "pull back a little bit". The family operation has five dairy operations in south-west Western Australia, producing on average approximately 19 million litres of milk per annum. Mr Wagner put a proposal to Mr Woodhouse on stabilising the business before taking it to the next level, potentially with outside capital. AgCap gets paid 80 percent of its revenue from the deal through a base fee, with the remaining 20 percent paid as performance incentives.

On Monday, Bellamy's Australia announced it had entered into a scheme for Mengniu Dairy Company, one of China's biggest dairy companies, to acquire 100 percent of the company at $12.65 per share, with a special dividend of a further $0.60 per share to be paid before the takeover. Mengniu Dairy Company is listed on the Hong Kong stock exchange, with a market capitalisation of $A22.6 billion. Bellamy's chair, John Ho, said the board unanimously backed the proposal, with the takeover expected to be completed by the end of the year. The board is urging shareholders to approve the deal, which is also subject to approval by the Foreign Investment Review Board.

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Angus Pastoral Company will begin construction of a greenfield beef processing plant in November, after four years of detailed planning and approval applications. The new $27.9 million facility will be built by Signature OnFarm, part of Blair and Josie Angus' Angus Pastoral Company, on 'Sondella Station', approximately 125 kilometres north-west of Moranbah. The ‘boutique-scale' facility will be export accredited and have the capacity to process up to 200 cattle per day when fully operational. In addition to processing cattle under the Angus' own Signature Beef brand, the new abattoir will give other producers in Central Queensland access to a local, custom kill service. Operation of the plant is expected to commence in late 2020 or early 2021.

ADM Australia will move into bulk-handling as the company's facility at Port Pirie South which opens. The facility will act to expand marketing options available to growers in the Mid and Upper North regions of South Australia. The site is expected to open next month, and will service domestic customers. ADM Asia Pacific trading managing director, Tim Henry, said, "Coupled with other projects nearing completion in the state, and the expansion of on-farm storage, the grain supply chain landscape is changing rapidly in South Australia."

A recent Australian Bureau of Agricultural and Resource Economics (ABARES) commodities report suggests the value of Australian farming production is forecast to fall to $59 billion this season. Forecasting a 5 percent drop in production value, this decline leaves the sector at a low not seen since 2009/10, during the millennium drought. ABARES chief commodity analyst, Peter Gooday, said while production values were low, they had not yet reached the lowest point of the millennium drought. "We're still about 20 per cent above the lowest point," he said.