Weekly Agribusiness News Recap - By Georgia Devenish

By: "Farm Tender" News
Hay & Fodder News
May 09, 2019
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By Georgia Devenish - Agricultural Research Analyst at JLL

Horticulture

Select Harvests, one of Australia's largest almond growers, is expecting this year's almond crop to be one of the best the company has seen in recent years. Select Harvests said it was expecting a yield over 10 percent above industry standards across all the portfolio orchards when harvest wrapped up at the end of April.

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The company points to investment in greenfield plantings as well as technology and improved risk management as key drivers of the increased yield. In terms of the market, managing director, Paul Thompson, said pricing had remained stable, with the average 2019 price expected to be circa $8.40 to $8.70 per kilogram as both domestic and export demand continues to remain strong.

Cropping

Despite a recent drop in grain prices in Western Australia as the market aligns with global conditions, the prolonged dry conditions on the east coast of Australia has continued to lift prices year-on-year. Australian Premium White wheat delivered to Melbourne on 1 May 2019 made $385 per tonne, up 25 percent on the $307 per tonne received the same time last year. However, this is below on the $442 per tonne received for the same specification wheat at the beginning of the year.

Dairy

Australian Consolidated Milk (ACM) supplers will received an opening guaranteed price plus of $9 per kilogram of milk solids next season, equating to an increase of 12.5 percent on this year's opening price. ACM commercial manager, Peter Jones, said, “The new season’s price reflects ACM’s continued progress in developing the organic business.” The company's organic milk pool has grown 25 percent over the past year.

Bubs and Fonterra Australia have announced a partnership to produce Australia's first organic grass-fed cow's milk infant formula. Fonterra will supply Bubs with organic cow's milk powder sourced from New Zealand. Following the announcement of the new organic product on Monday, Bubs' share price recorded a 22 percent increase from Friday's close.

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Bubs has also been busy finalising a joint venture with Beingmate Baby and Child Food, a strategic agreement with Alibaba's Tmall and an alliance with Chemist Warehouse.

Agribusiness

Having failed to move beyond the non-binding indicative proposal announced on 3 December 2018, Long-Term Asset Partners' (LTAP) $3.3 billion takeover bid for GrainCorp has been withdrawn. Culminating a prolonged five month period of due diligence, and coming just days before GrainCorp is due to finalise the sale of its bulk liquid terminals business to ANZ Terminals for $350 million, LTAP chairman Tony Shepherd said in a statement that “had due diligence supported our operational assumptions, we are confident we would have turned the LTAP proposal into a binding offer as contemplated.”

Graincorp has posted a $59 million half-year loss, with the prolonged dry conditions in eastern Australia as the driving factor for this decline. For the same period last year Graincorp recorded a profit of $36 million.

Perth-based company Alterra is in the process of repositioning itself to capture strong institutional investor demand for WA agriculture. Managing director Oliver Barnes said “by securing access to land with water allocations, Alterra can transform under-capitalised West Australian agricultural properties into higher-value permanent tree crops, which are in strong demand from institutional investors.” Barnes furthermore stated that the company was currently assessing cattle and potato farms that have under-utilised water assets as potential sites for greenfield horticultural development. Alterra aims to complete four deals a year, and is currently assessing eight near-term opportunities in its investment pipeline. As well as developing greenfield assets, Alterra plans to manage operations.

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Mid-market buyout firm Odyssey Private Equity has taken a 20 percent stake in Delta Agribusiness. Odyssey managing partner George Penklis said it was unusual for private equity to invest in a rural merchandiser but the firm made an exception because Delta had "strong growth opportunities". Odyssey, a Sydney-based firm, was spun out of CHAMP Ventures two years ago.

AgTech

Cattle producers now have access to a free online tool which allows them to compare the prices on offer for direct consignment to a range of processors and feedlots including Teys, Thomas Foods, Bindaree, Borthwicks and NH Foods. The tool is located on the new AgCentre website.

Property

Harvard University’s Harvard Management Company has listed its portfolio of irrigated and dryland cropping properties in the Lachlan and Murrumbidgee valleys of south-western New South Wales. Known as the Lachlan River Portfolio, it covers 32,567 hectares and comprises much of 'Cowl Cowl' and 'Newmarket', and most of 'Wyadra'.

Sir Michael Hintze's MH Premium Farms has acquired the 'Canowindra Aggregation' in Central Western New South Wales from Macquarie's Viridis Ag for more than $21 million. The aggregation comprises 3,651 hectare 'Canomodine' on the Belbubula River and 536 hectare 'Elonera' west of Orange and included livestock and a 1,296 megalitres of water entitlements.

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Webster Limited has paid $10 million for the cropping rights to 422 hectares of walnut orchards, some of which it already owns. A Webster subsidiary, AWG Funds Management, was responsible for running the AWG investment, but will be wound up following the purchase. Webster chief executive officer, Maurice Felizzi, said the acquisition allowed Webster to realise synergies in its walnut operations without the additional administration and cost burdens associated with dealing with a MIS.