Weekly Agri News Recap

This article is bought to you by Victorian State Marnoo Merinos Field Day and Elmore Compost.

By Georgia Devenish - Agricultural Research Analyst at JLL

Agribusiness

Australian-owned Fresh Solutions Group has announced it will acquire Melbourne-based exporter BGP International. Fresh Solutions Group has a network of fresh produce suppliers across Australia, the US, South America and Asia while BGP International exports fresh produce from Australia, Egypt, South Africa, the US, India and China. While BGP International will continue to operate under its own name as a separate entity, the merger will allow for a stronger positioning to assist their suppliers. Neil Barker, chairman of BGP, said, "We are strong in exports and Fresh Solutions Group is strong domestically in Australia. We are looking forward to working together to identify and develop potential opportunities together."

Liquidators have been appointed to Chinese-backed Harmony Operations Australia Pty Ltd after a New South Wales custom feedlot operator sought repayment of $5.4 million from the company. On the same day, National Australia Bank appointed FTI Consulting as receivers to the same company. According to Australian Securities and Investments Commission (ASIC) documents, Harmony Operations Australia is a wholly-owned subsidiary of Harmony Agriculture and Food Company. ASIC documents show Harmony Agriculture and Food Company is not in administration, receivership or liquidation.

Fonterra Australia has recorded its smallest July milk intake in at least seven years. For the first month of the 2019/20 season, milk collection was down 28.9 percent on last season at 5.4 million kilograms of milk solids. In its latest 'Global Dairy Update' report, Fonterra said, "The drought in 2019 has led to an increase in cow cull rates, a significant number of farm retirements and a continuation of historically high input costs resulting in a material reduction to the Australian milk pool in FY19 (the 2018/19 financial year) versus FY18." Dairy Australia anticipates a decline in national milk production of between 3 percent and 5 percent to 8.3-8.5 billion litres during 2019/20, due to continued high input costs and the reduced size of the national herd.

Horticulture

According to recently released figures from Global Trade Atlas, Australian exports of fruit, nuts and vegetables have cracked $2.8 billion in value for the first time, showing an increase of 27 percent Year-On-Year (YOY). Specifically, Australian nut exports hit the $1 billion market in export value while table grape exports reached $555 million – a 45 percent increase YOY. The trade value for almonds was $675 million reflecting a growth of 53 percent YOY which made it the most valuable export crop. Fresh vegetable exports also exhibited strong growth trends with an 18 percent increase in value over the last financial year.

Dairy

Australian milk productions fell to 8.8 billion litres in 2018/19, the lowest production volume in 22 years. Dairy Australia anticipates milk production to drop again this season, falling between 3 percent and 5 percent to 8.3 to 8.5 billion litres, due to continued high input costs and the reduced size of the national herd. While this dismal domestic supply situation continues to hang over the Australian industry, global milk trade continues to grow strongly. An International Farm Comparison Network (IFCN) report released in June 2019 showed international trade in milk and dairy products had doubled between 1998 and 2018 to 57 million tonnes of milk equivalent. The IFCN estimates dairy trade will nearly double again by 2040.

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Cropping

The Victorian State Government has convened a taskforce to investigate the industrial use of hemp and identify opportunities for growth. The taskforce will engage with industry stakeholders, participants and research organisations to understand where the industry has potential, and whether regulations need to be amended to support growth. The taskforce will focus strictly on the industrial use of hemp, rather than the therapeutic uses.

Fisheries/Aquaculture

Millions of Atlantic salmon are filling Huon Aquaculture's 18 super-tough 'fortress pens' at a new farm site in open water in southern Tasmania. They are transported from the company's hatchery, pumped into the wellboat, the Ronja Huon, and taken to the fish farm site. The Yellow Bluff site, north-east of Bruny Island, is a key part of Huon Aquaculture's grow-out plan for Atlantic salmon. The general manager of Huon Aquaculture's marine operations, David Moorehead, said the process started with approval applications in 2016. With those approvals in place, the moorings and the fish pens have been established and now the fish are being moved in.

Huon Aquaculture is not the only aquaculture company to be setting up further operations in open water in Tasmania's south-east. Petuna's application for its fish farming expansion in Storm Bay has had some of its early approvals, and Tassal has had four 45-hectare leases approved. Tassal's farms will be at West of Wedge near the Tasman Peninsula.

Trade

After taking the top spot in July 2019, China has retained its position as Australia's largest beef export customer during August. Trade results released by the Department of Agriculture show that although volumes had fallen by approximately 7 percent on July's extreme record-high, volumes shipped to China were still well ahead of those into traditionally dominant markets, Japan and the United States. The fall on July is not surprising, last month's shipments to China had reached a point 80 percent higher than those recorded for the same period last year. For the calendar year to August, overall export trade to all markets reached just over 790,000 tonnes, representing a 6 percent increase YOY.

Other

The South Australian State Government has opened consultation on a discussion paper on growing South Australia's $14.8 billion food, wine and agribusiness sector as part of the ‘Growth State' initiative. ‘Growth State' is the Government's work plan to achieve three percent overall growth annually in South Australia and is being applied initially to those sectors having the strongest prospects for increased trade and investment.

CSIRO has released their new report, 'Growth Opportunities For Australian Food And Agribusiness' at the Global Table conference in Melbourne. CSIRO's strategic advisory arm, CSIRO Futures, has valued the full range of opportunities identified in the 2017 Food and Agribusiness Roadmap. The paper explores the potential value of market opportunities in the specific areas of health and wellbeing products, sustainable solutions and premium interactions. One of the findings from the paper was that there was significant value to be found in fortified and functional foods. This opportunity includes foods and beverages that contain added health ingredients and nutrients for intended nutritional benefits.

According to figures from Rural Bank, South Australia exported $5.42 billion of agricultural products in 2018/19. This represents a 13.6 percent, or $856 million, decline in value YOY which was largely driven by lower grain production, and thus lower exportable supplies. A brighter point for the state was the continued strength of horticultural exports which accounted for more than 40 percent of the total export value. South Australia also experienced growth in wool, seafood and horticultural commodities.

Ad- Victorian State Marnoo Merinos Field Day - After a successful 1st event we are looking forward to next year - Ad
Ad - Get the balance back in your soils - Try Elmore Compost - Call Frank Harney on 0428 511 525 - Ad