Weekly Agribusiness News Recap

By: "Farm Tender" News
Hay & Fodder News
Oct 24, 2019
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By Georgia Devenish - Agricultural Research Analyst at JLL

The Kyabram jam and sauces plant in northern Victoria and the IXL jam and Taylor's marinades and sauces have been sold to the Kyabram Jam Company. The announcement made on Monday by SPC said the group behind the acquisition was made up of local farmers.

This follows the attempt by SPC last year to sell the IXL Jam and Taylor's marinade and sauces brands to Kyabram Conserves Pty Ltd, a company backed by Sydney based fund and asset manager, Millinium Capital Managers Limited. However, in November 2018 it was announced the sale, which had been scheduled for completion by 31 October 2018, would no longer be proceeding and the IXL and Taylor's brands remained with SPC.

The sale of the factory comes only months after Coca-Cola Amatil divested SPC which was picked up by Shepparton Partners Collective, a joint venture between Perma Funds Management and The Eights.

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JBS has announced a project to develop a traceability system which will see cuts of beef linked back to the individual producer in the paddock. The announcement was made at a JBS field-day function on King Island with cattle suppliers, distributors and restaurant end-users engaged with the King Island beef brand. With plans to launch by the end of the year, the program will initially focus on the company's Longford beef plant in Tasmania where cattle supplied by its King Island growers are processed.

Finasucre, a Belgian sugar producer, has acquired a significant portfolio of macadamia orchards situated north of Bundaberg in the Burnett region of Queensland. The 1,018 hectares aggregation features approximately 644 hectares of mature plantings and associated with the sale was 1,838 megalitres of water licences. The vendor, an entity of Boston-based Hancock Agricultural Group, sold the assets for $59.2 million. The purchase adds macadamias to the suite of agrifood products Finasucre produces in Australia, including broccolini, raspberries, blueberries and sweet potatoes.

Costa Group Ltd entered a trading halt on Monday ahead of what was expected to be an announcement about a hit to its earnings. When handing in its August 2018 interim profit report, Australia's biggest grower and packer of fresh fruit and vegetables warned that there was 'downside risk' to its guidance if pricing for blueberries and mushrooms remained weak. As at 30 June 2019, Costa also had net debt of approximately $309 million when deducting $45.8 million cash on hand. Trading of Costa Group Ltd shares remains suspended following the initial three day period after the company asked for the trading halt to be extended for up to an addition five day period.

Treasury Wine Estates Chief Executive Officer (CEO), Michael Clark, has announced his intentions to retire from the role of Managing Director and CEO in the first quarter of fiscal 2021. Tim Ford, the company's Chief Operating Officer will then be appointed to the role of CEO. "Following an extensive transition period and upon his retirement, Mr Clarke has agreed to act in the capacity of advisor to the company for up to an additional one-year period, to provide strategic support across key initiatives including potential merger and acquisition opportunities," a statement from Treasury Wine Estates said.

The Milk Exchange, the dairy industry's first open market selling platform, was launched this week. The national digital milk market is comparable to other electronic livestock marketplace, such as AuctionsPlus, and similar online grain trading facilities. The platform aims to allow sellers and buyers of raw milk nationally to join an open trade, or at least get a broader picture of demand and price indicators for any spare supplies on offer. CEO of the producer body, Australian Dairy Farmers, David Inall said in response to the launch, "We haven't fully analysed all that the Milk Exchange might deliver, but we definitely support any initiative providing greater market options to dairy farmers."

Expectations of Australia's grain harvest continue to slide as grain industry analysts drop predicted tonnage from the total winter crop. Rabobank has forecast a total winter crop of 27.7 million tonnes, down 9.7 percent down on last year's crop total of 30.4 million tonnes and 31 percent below the five year average. If it eventuates, Rabobank's forecast would represents the smallest crop since 2007/08.

The US Department of Agriculture has announced it will purchase US$30 million of US grown table grapes to assist grower returns. It comes as part of its section 32 programme, which diverts commodities from normal channels of trade and commerce in order to improve grower returns. US$6 million has also been allocated to the California Table Grape Commission to assist in the promotion of table grapes in global export markets. Recent tariffs and trade barriers appear to be causing uncertainty for US fresh produce exports.

Legislation has passed through the House of Representatives this week which will allow for the ratification of Australia's Free Trade Agreements with Indonesia, Hong Kong and Peru. The Customs Tariff Amendment Bill 2019 was given bipartisan support and will now go to the Senate for final approval. Trade Minister Senator Simon Birmingham, said, "It is our intention for the necessary legislation to pass the Senate by the end of the year. Hong Kong and Peru have already completed ratification processes and we remain hopeful that Indonesia will complete their processes in a similar time frame to Australia."