Farm Tender

Weekly Agribusiness News Recap

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By Georgia Devenish - Agricultural Research Analyst at JLL

Hops Products Australia (HPA) - the company which produces 90 percent of all hops grown in Australia - has received funding from the Victorian Government to build a new processing facility in the state's North East. HPA own a 300 hectare site at Buffalo River Valley near Myrtleford which will be the location of the new facility. The planned investment will increase HPA’s export capabilities by $16 million once completed. The four-year project involves a total investment from HPA of $26 million, with construction of the processing facility expected to begin in March. HPA is a privately owned and independently managed Australian company, part of the Barth-Haas Group of companies; the largest hop trader in the world.

New Forests, an Australian-based forestry investor, has announced its third-round Australia New Zealand Forest Fund has acquired the hardwood plantation assets of Bunbury Fibre Plantations from Mitsui Bussan Woodchip Oceania. The Bunbury Fibre Plantations assets include approximately 12,000 hectares of certified plantation hardwood, situated near Bunbury, Western Australia. The plantations will continue to be managed for long-term supply of certified woodchips, principally targeting export markets.

This acquisition was the second announced by New Forests for February 2020. On the 7th of February, the firm announced the purchase of 18,000 hectares of radiata pine plantations in southern Tasmania from listed Norwegian paper producer, Norske Skog. The deal includes a long-term agreement to supply pulp wood to the Boyer paper mill, which will continue to be operated by Norske Skog. The purchase will require Foreign Investment Review Board approval.

Fonterra Australia announced this week that it had signed a sale agreement for its Dennington milk processing plant. The purchaser, ProviCo, is an Australian-owned animal nutrition manufacturer and the largest supplier nationally of calf milk replacers. The sale will be complete by 22 April 2020.

The transaction follows Fonterra's decision to close the facility located in south-western Victoria as announced in May 2019 with date effective being in November 2019. Fonterra's Farm Source General Manager, Matt Watt, cited falling Australian milk production and excess processing capacity in the industry as a key reason for the closure. The decision came as a shock to some industry participants given the company had previously announced in January 2018 that the Dennington factory would undergo an $8.6 million expansion.

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ABARES has released a suite of publications this week. To choose one to focus on, 'Disaggregating farm performance statistics by size, 2018–19' provided some interesting data. The report highlighted a relationship between farm size and farm performance,

  • The largest 10% of broadacre farms produced 48% of total output, while the smallest 50% of farms produced 11% of total output.
  • The average rate of return including capital appreciation by the largest 10% of broadacre farms was 8.3%, while the average for the smallest 10% of farms was –4.2%.
  • The beef industry was the most concentrated broadacre industry, with the largest 10% of farms producing over half of total industry output in the 3 years to 2018–19.

A new tech start-up company may be part of the solution to repairing drought- and fire- affected forests in eastern Australia. AirSeed Technologies, an environmental restoration firm, has developed specialised tree-planting drones. Co-founded by mechanical engineer, Andrew Walker, and geo spatial data expert, Andries Louw, the company is concentrating on large-scale reforestation trials which will start in the coming months in bushfire-affected areas. Mr Walker said at the moment it could comfortably plant about 40,000 trees a day. As Mr Walker said, the value in the system lies in the fact that, "The system reduces the cost of planting trees by 75-80 percent using a payload system called a 'Podder', AirSeed Technologies can disperse seed pods 95 percent faster compared with traditional planting methods and has the ability to access harsh or difficult terrain."

Released on Sunday, Landline captured the story of a beef producing family operation in south-east Queensland exporting their product to China. The Penfold family's beef export business has been in a continual state of growth since a chance meeting in Rockhampton with Ms Nisha Wang from ANZJoy International two years ago. Ms Wang, a Chinese importer who wanted clean, green, beef was intrigued by a photo of the four red-headed daughters working on the family's cattle property. The uniqueness of this cattle operation formed the basis of the marketing campaign for the new Australian beef brand in China and gave it it's name, Four Daughters.

Unfortunately, the new export beef business has been severely impacted by the coronavirus, with ANZJoy International based in Wuhan, the epicenter of the coronavirus outbreak. Two containers of the Penfolds' beef arrived at the Port of Shanghai last week, but won't be released until quarantine restrictions in Wuhan are lifted. This compounds on two other containers, which landed late last year and weren't cleared in time to be trucked to Wuhan, which are also being held.

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