Weekly Agribusiness News Recap

By Georgia Devenish - Agricultural Research Analyst at JLL

Murray River Organics (MRO) has announced two new contracts with Woolworths Supermarkets to the order of $15 million over two years. It is understood the scale and global sourcing capabilities of the organics manufacturer were key to forming the contracts. MRO services the organic, natural and health food and snack market and has certified organic products, which are sold into 26 countries.

In early February 2020, MRO announced a fully underwritten $25 million renounceable entitlement offer at a price of $0.015 cents per share. The new equity would be used by MRO to fund its turnaround strategy, after it struggled in 2019 fighting drought, low farm yields, high water costs and high growing costs. The challenges in 2019 forced the company to voluntarily suspend itself from trading on the ASX late last year. On March 5 2020, the suspension of trading in the securities of Murray River Organics Group Limited were lifted following the announcement of the completion of its entitlement offer on March 4 2020.

Viterra has loaded its largest single rail cartage - a 100-wagon train - bounded for interstate feedlots to meet continuing demand for quality South Australian new season grain. Each of Viterra's six SA port terminals will be loading vessels over March and April with wheat, barley and canola headed to a range of domestic and export markets. Viterra operations manager Michael Hill says, "It's a huge positive to see grain from our state in such high demand with a number of buyers in our system sourcing SA grain for the first time."

The South Australian Government has released more than 6,500 hectares of unallocated and available water for aquaculture production. The bulk of release is based around Port Lincoln and the greater Eyre Peninsula region. Minister for Primary Industries and Regional Development Tim Whetstone said, "Opening up zones for emerging industries such as farming seaweed and the existing aquaculture sectors will strengthen South Australia's aquaculture industry and revitalise the regional communities that support it." Approximately 4,000 hectares of aquaculture area is currently allocated and being farmed in South Australia.

Australian Sustainable Hardwoods (ASH) has commissioned its new $3 million timber manufacturing plant in Heyfield. A key feature of the facility is improved sawing technology which maximises the amount of useable timber while minimising sawdust and woodchip waste. ASH received a $1.2 million grant from the Federal Government for the project to create new jobs and encourage business investment.

The Queensland Department of Agriculture has released its study on the north-west Queensland Monsoon event of 26 January – 9 February 2019. It represents the first time an accurate, district-by-district assessment of livestock losses experienced during floods has been completed. The survey covered the Local Government Areas of Burke, Carpentaria, Cloncurry, Flinders, McKinlay, Richmond and Winton Shires.

The report suggests the floods caused the death of an estimated 457,000 head of cattle, 43,000 sheep, 710 horses and 3,000 goats across an area of 11.4 million hectares. Cattle represented 91 percent of total livestock losses. In addition to livestock mortalities, approximately 22,000 kilometres of fencing and 29,000 kilometres of farm roads and tracks were destroyed or damaged, and 2,320 kilometres of poly pipe and 1,350 tanks and troughs destroyed or damaged.

In terms of recovery, by September 2019, most landholders had replaced and repaired fences, but had not yet moved on to other infrastructure. Furthermore, an estimated 24 percent of cattle (109,000 head) and 20 percent of sheep (8,700 head) had been restocked.

The Department of Agriculture, Water and the Environment has released their report 'Future scenarios for the southern Murray-Darling Basin'. This report presents recent economic modelling of forward looking scenarios for the southern Murray-Darling Basin water market, examining potential future water prices, trade flows and irrigation sector outcomes, taking into account recent and expected trends for water supply and demand. The key findings include:

• Higher water prices;
• Inter-regional trade limits having a larger effect;
• Just enough water to maintain horticultural plantings in dry years;
• Reductions in water use in some traditional irrigation sectors and regions; and
• Decrease in gross value of irrigated agricultural production for traditional irrigation sectors (i.e. dairy and rice).

And as a final hot topic - the Bureau of Meteorology has released a 'Special Climate Statement' on extreme heat and fire weather conditions during summer. Some of the key statistics include -

• Extensive heatwaves over much of Australia saw area-averaged maximum temperature records. Broadly on average, Australia recorded 41.88 °C on 18 December (previous record 40.30 °C on 7 January 2013). Six other days in December also exceeded the previous record.
• Warmest December on record for Australia and all mainland States except Victoria.
• Numerous high daily temperature records at sites across southern and eastern Australia. The highest recorded was at Nullarbor, South Australia where the temperature reached 49.9 °C on 19 December.
• Dangerous fire weather conditions continued from spring into summer; highest December accumulated Forest Fire Danger Index for Australia as a whole.