Weekly Agribusiness News Recap

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By Georgia Devenish - Agricultural Research Analyst at JLL

Australian almond processor, Almondco, has received a $28.55 million loan from the South Australian Government to expand its Renmark processing facility. Almondco is the second largest processor of almonds in Australia. The company exports approximately 30 percent of the national almond crop, and exports more than 50 percent of its output. Minister for Primary Industries and Regional Development, Tim Whetstone, said, "This expansion will assist Almondco meet market needs with a projected increase in almonds processed from 28,000 tonnes to over 45,000 tonnes per annum by 2026." The loan has been provided under the 'Loans to Cooperatives Scheme' which supports investment in new processing and storage infrastructure.

Canadian pension fund, Ontario Teachers' Pension Plan (OTPP), is expanding its horticultural presence in Australia. It has been recently revealed that the fund is in the process of acquiring 'Capel Farms', an avocado farm in the Busselton region of south-west Western Australia. OTPP is reportedly paying approximately $20 million for the 220 hectare 'Capel Farms' property, which features 50 hectares of Hass avocado trees that were planted in the past year. The remaining land on the property, currently utilised to grow vegetables, will make way for a greenfield avocado development to be planted within the next 18 months.

OTPP were behind the purchase of 'Jasper Farms' in late 2017. 'Jasper Farms' is Western Australia's biggest avocado operation, and the second largest nationally. With the purchase of 'Capel Farms', OTPP's avocado footprint in Australia will grow to approximately 580 hectares.

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John Dee, the oldest single-family owned meat processor in Australia, is expanding their Warwick abattoir in Queensland which will see its processing capacity increase by 40 percent. Minister for Agricultural Industry Development, Mark Furner, said the investment will increase John Dee's production capacity at its Warwick facility by 1,000 head of cattle per week. The expansion will leverage $16.7 million in capital investment and ultimately lead the company to be one of Queensland's leading processors of premium beef. Their Warwick abattoir is Queensland's only facility, and one of only two in the country, to offer long-term, large-scale contract processing services to other feedlots. Construction on the project is expected to be completed by the end of 2019.

Australian Farmlands Fund, a new farmland fund managed by Kilter Rural, is scouring the southern Murray Darling Basin for opportunities to acquire and develop farms to high-value annual crops. These type of crops will include the likes of field tomatoes, high-yielding organic cereals and oilseeds. It is understood the fund will avoid investment in water-intensive crops, a strategy which Kilter Rural Chief Executive Officer, Cullen Gunn, said was based around being able to "manage its irrigation footprint". The Australian Farmlands Fund is backed by Sydney-based, Regal Funds Management, which acquired 50 percent of Kilter Rural in February. To date, four properties in Northern Victoria have been acquired and aggregated at a cost of approximately $20 million.

Ridley Corporation has announced it will close one of its two South Australian stockfeed mills by the end of October. Shifts at the facility located at Murray Bridge have already been cut to one shift per day, but the company said that the continued operation of the feedmill was costing the business $1.5 million annually. Ridley Agriproducts was notified earlier this year it would lose a supply contract for poultry processor, Ingham's, this month. Ingham's opened a new feed mill of its own at nearby Brinkley in February as part of a $279 million expansion to its feed processing and poultry farming operations in South Australia. Managing director, Quinton Hildebrand, suggested that the Murray Bridge facility was expected to be sold in the 'medium term'.

It was reported this week that Auscott's vertically integrated 'Midkin' business at Moree in northern New South Wales had been acquired - in what may have been a potential joint venture - by Australian Food and Fibre. Auscott has confirmed the sale of 'Midkin' but has not named a buyer. The offering drew considerable interest and included 17,300 hectares of land, 57,600 megalitres of water entitlements and ginning facilities with the capacity to process 200,000 cotton bales per annum.

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VicForests has launched a revised policy on native forest operations that involves changes to harvesting and regeneration techniques as part of its campaign to achieve Forest Stewardship Council (FSC) certification. It is expected to have a big impact on the forestry industry in Gippsland and the North East. Major retailers such as Bunnings and Officeworks have said they will only accept FSC products from next year. VicForests is introducing these changes to achieve the FSC Controlled Wood Standard, an interim measure to achieve full FSC certification. VicForests already has Programme for the Endorsement of Forest certification, which is the largest certification system in the world.

Wool markets have recovered this week on the back of a relatively small offering and reports of lowering stocks of greasy wool in China. The Eastern Market Indicator (EMI) increased 61 cents per kilogram clean at sales in Melbourne and Sydney this week. On Wednesday, the the EMI finished on 1,603 cents per kilogram with a small national offering of 12,949 bales recorded. The pass-in rate was 4.7 percent. An offering of 19-21 micron wools attracted strong buyer demand for all types and descriptions, pushing the micron price guides 90-100 cents higher.

A Memorandum of Understanding (MOU) has been signed this week in recognition of red meat trade relationships between China and Australia. Australian Meat Industry Council chief executive officer, Patrick Hutchinson, signed 'The China Australia Red Meat Agreement' (CARMA) with the China Meat Association in Chengdu, China. "The aim of this MOU is to establish long-term and formal cooperative relations, strengthen effective and practical food safety processes and enable bilateral exchanges around technical know-how, marketing, and research and development investment. Ultimately, the MOU will help secure trade outcomes that are beneficial to all parties," Mr Hutchinson said. Under the terms of the MOU, a working group to help implement the goals of the CARMA will be formed to initiate the cooperative program.

The Australian Department of Agriculture has released its most recent 'Insights' paper with a focus on Australia's place in global agriculture and food value chains.

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