Weekly Agribusiness New Recap

This article is bought to you by Molloy Contracting.

By Georgia Devenish - Agricultural Research Analyst at JLL

On the Victorian Country Hour last week, Peter Somerville talked to AuctionsPlus CEO, Angus Street, about what is thought to be the largest online auction in the company's history and possibly Australia's too. AuctionsPlus sold more than 13,000 cattle in a single sale with the sale grossing just over $13 million. The sale topped 668 cents per kilogram; Mr Street expects prices to continue to grow although perhaps not at the same rate which has been observed in the last few weeks. Approximately 50 percent of stock sold went to New South Wales purchasers, where rainfall has kicked off the appetite of buyers.

The impact of coronavirus on Australia's agricultural sector is reverberating through the wine industry. Treasury Wine Estates (TWE) has flagged a full-year profit downgrade as sales stumble in China. The company announced previously reported profit guidance of earnings growth of between 5 percent and 10 percent for the 2019 financial year would no longer be achievable.

TWE cannot be alone in feeling the pinch. In early February, Wine Australia reported China was the biggest destination for Australian wine by value in 2019 while consolidating its position as the number one imported country of origin ahead of France. One article from SmartCompany, suggested exporters are saying sales could be down by as much as 90 percent for the first two months of this year.

Yumbah Aquaculture, an integrated aquaculture business, has announced a $13 million investment plan for its Kangaroo Island abalone farm which it hopes will boost employee and regional morale following a devastating fire season. The first stage of the investment will involve an initial repair and recovery investment of $1 million, which includes further fire prevention infrastructure and formalising how to share Yumbah’s dams for future firefighting use. Following this, the business has a $3 million 'shovel and approval ready' expansion to lift annual abalone production from 150 tonnes to 250 tonnes, adding about 50 new skilled jobs for Kangaroo Island.

Woods Group, a Queensland-based vertically integrated agribusiness, has acquired Agrifoods Australia, an independent agrifoods business specialising in pulse grains, birdseed, coarse grains and specialty seeds. Located in Dalby, Queensland Agrifoods Australia provides grain marketing services in the major grain production areas of Central and Western Queensland, the Darling Downs and Northern New South Wales.

#FarmTender2020 - Focus on Farming Systems - June 5th, Bendigo, Vic

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The Woods Group has six vertically integrated business divisions with a focus on industry innovation and product differentiation. In 2018 the Woods Group partnered with The University of Queensland to further diversify its operations by establishing an onsite algae farm. The company received council approval a seven-pond algae farm, and a reservoir – the first commercial venture of its kind in Queensland. It is understood the Omega-3 product from the algae was planned to be trialed as a food supplement to the Woods Grain feed mill on the neighbouring site.

Effective on 21 February 2020, Pasture Genetics officially become a part of S&W Seed Company Australia (S&W). S&W made the announcement in a statement issued to the New York NASDAQ last week. Pasture Genetics is one of the largest producers, marketers and suppliers of pasture seeds in Australia. The acquisition will be S&W’s fourth in the past six years, including three other Australian innovators in seed genetics.

Australia's largest live export company, Wellard Limited has announced a 172 percent drop in profits year-on-year with a $2.1 million loss for the first half of the 2019/20 trading year. However, the company commented that its earnings position and prospects were improving, with net debt cut by 24.5 percent to $84.5 million from $112 million in June 2019. Wellard also remained positive about it earnings outlook for the current quarter, with all its available shipping space chartered.

Welllard Limited is currently undergoing a restructuring operation to focus on chartering. For the six months to December 31, chartering activity grew from 18 percent of total revenue to 93.2 percent, while livestock trading represented just 7 percent, down from activity declined from 81.9 percent a year earlier.

A thought provoking new podcast episode in the Future Tense series presented by Anthony Funnell. The program looks at the new technologies, new approaches and new responses arising from rapid change and ultimately how we adapt to a changing world. This is the second installment in a two-part series on water conflict and management.

In this episode, Funnell focuses on the idea of water banking. Water banking involves the deliberate injection of surplus water into known aquifers. The idea is to re-purpose the world’s many artesian basins as giant sustainable storage tanks - ones that can readily be drawn upon in times of drought.