Weekly Agribusiness News Recap

By: "Farm Tender" News
Hay & Fodder News
Apr 20, 2019
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By Georgia Devenish - Agricultural Research Analyst at JLL.

Horticulture

2018 saw strong growth in Australian potato exports. According to Global Trade Atlas, Australian potato exports (excluding seed potatoes) increased 23 percent in value to $31 million, while volume increased 27 percent to more than 40,000 tonnes. South Korea remained the leading market for Australian potato exports. While the country imported a slightly lower tonnage than the previous year, the value of this market increased six per cent to $12.3 million.

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Exports of Australian vegetables grew to $281 million as a result of strong demand in Singapore, Japan and Thailand markets. Singapore increased 7.5 percent in value, to $50.5 million, Japan rose 8.7 percent, to $32 million and Thailand 54 percent, to $7.8 million.

AusVeg data showed carrots were the strongest export performers at 113,000 tonnes, increasing in value by 5.1 per cent to $98 million. As AusVeg National Manager - Export Development Michael Coote pointed out, “Carrots are one vegetable crop where Australian producers can be price competitive in international markets due to fully automated production methods reducing labour requirements.”

Finishing up the third week of marketing for 2019, manager of the Kanzi apple brand in Australia, Desmond Muir says the variety is proving very popular among consumers. Sales of Kanzi apples in Australia has continued to grow at a significant rate. Mr Muir puts the growth in volumes down to younger trees coming into production, with 600,000 trees in the ground and 150,000 set to be planted. At present demand is outweighing supply. Mr Muir says that growers want to plant more trees to keep up with the demand, but a cap has been applied to prevent an oversupply, and a reduction in prices.

Livestock

Meat and Livestock Australia’s national trade lamb indicator hit 715 cents per kilogram on Monday — well up on the 582 cents per kilogram at the same time last year and 680 cents per kilogram in 2017. Elders Jamestown’s Scott Fleetwood said processors had followed the national saleyard indicator price, lifting their rates last week.

Meat and Livestock Australia export statistics show that in the first three months of 2019 Australian beef exports to China increased 67 percent year-on-year compared to 11 percent across all markets. Australian beef sales to China for the 12 months ending March 2019 increased 57 percent year-on-year to 183,481 tonnes.

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In a new report, Rabobank said it expected Chinese pork output would decline by between 25 to 35 percent in 2019 as a result of African Swine Flu incursions. US-based RaboResearch senior analyst for animal protein, Christine McCracken, estimated that the virus was now affecting up to 150 to 200 million pigs in China.

In September 2018 the Red Meat Advisory Council (RMAC) announced the review the Memorandum of Understanding (MoU) put in place 20 years ago to define the roles, responsibilities and funding of Australia’s red meat industry bodies. The Green Paper was released for public consultation between 14 February - 15 April 2019 with over 600 Green Paper downloads and 50 submissions being received over the period.

Following the end of the public consultation period on Monday, the RMAC is expected to present its White Paper of recommendations to the Minister for Agriculture and Water Resources and MoU signatories by the middle of this year. All submissions that gave permission to be published will be available for viewing shortly on the RMAC website.

Cropping

According to the latest data from the Australian Bureau of Statistics, Australia exported 47,431 tonnes of chickpeas in February, the highest figure recorded since April last year when 69,103 tonnes were shipped. While India, traditionally Australia’s largest chickpea market, remains closed to volume imports as it works through its own chickpea supply, secondary markets like Bangladesh, Nepal, Pakistan and the United Arab Emirates have taken on increased importance for Australian exporters.

Wine/Vineyards

An 'Australian Wine Label Intellectual Property Directory' is being developed as part of the $50 million Export and Regional Wine Support Package.

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Wool

Rabobank released its latest Agribusiness Monthly report last week which highlighted the positive short to medium term outlook for the wool industry. Despite wool prices having fallen last month, they remain some of the best in recent years. The Eastern Market Indicator (EMI) has risen steadily from about 1,200 cents per kilogram in late 2015 to top 2,100 cents per kilogram last year. The EMI fell to 1,936 cents per kilogram last week after reaching 2,036 cents per kilogram on February 20 2019.

Agribusiness

Coles and canned fruit company, SPC, have partnered to produce a new range of locally farmed peaches, pears and apricots. The two-year supply deal will see an additional 1.8 million cans of Australian fruit processed for Coles every year.

The deal comes after Coca-Cola Amatil last year announced it would sell the struggling Shepparton fruit cannery. It is unclear how this deal is going to impact upon the cannery's future, with a sale announcement expected by the middle of this year.

Goldman Sachs is reportedly set to replace the lending group to Elders-backed "agri-financer" StockCo. It is understood Goldman Sachs' securities division will provide a $200 million-off warehouse facility to StockCo replacing the company's existing arrangement with Bank of Queensland and Challenger. This comes after StockCo sold a 30 percent equity stake to Elders late last year.

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Water

The grim outlook for the 2019/20 water year in the southern Murray Darling Basin is a story of significantly reduced water storage resulting in forecasts of low opening allocations.

The South Australian Department of Environment and Water estimates that the opening allocation for high reliability entitlement could be 14 percent, noting however the 90 percent probability that allocation will increase at least 75 percent during the year.

At the start of April Victoria’s Northern Resource Manager estimated that opening allocations for Goulburn and Murray irrigators could be close to zero on July 1, if dry conditions continue. However allocations could reach close to 40 per cent by mid-October, even if rainfall remains low.

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Other

The largest shellfish reef restoration project in the Southern Hemisphere is underway on the Windara Reef where 50,000 native oysters - donated by Primary Industries and Regions SA's research division SARDI (the South Australian Research and Development Institute) - will be introduced this week. This is the first of two oyster deployments for 2019, which together will seed the new reefs with over 7 million juvenile native Australian Flat Oysters grown in South Australian hatcheries.

This project is a partnership funded by The Nature Conservancy, the Australian Government, the South Australian Government, the Yorke Peninsula Council, The University of Adelaide and the Ian Potter Foundation.