31 Jul

Lease Fund Launches $100 Million Farmland Investment Scheme

Investment company Growth Farms has announced a $100 million venture to lease land to Australian farmers.

As the cost of agricultural land increases, leasing farmland is becoming an increasingly popular option for farmers who want to expand holdings and capitalise on enterprise scale.

Growth Farm’s ten-year investment fund will acquire mid-sized properties in high rainfall areas across northorn Queensland and northern New South Wales, the southern Murray Darling Basin region, Victoria, Tasmania and South Australia, with the first purchases expected to be made later in 2018.

The Australian Agricultural Lease Fund will target properties up to the value of $8 million, with the aim of leasing the land to nearby family farmers. Growth Farms expects to generate a return of around 10% per annum for investors through a combination of rental returns and capital gains.

“The leasing model gives farmers more opportunities to expand their businesses without having to find the capital to buy more land,” said David Sackett from Growth Farms.

“Many existing farmers are sub scale and capital constrained. Leasing overcomes this.”

Farmers leasing land through the fund will be required by Growth Farm to use the land sustainably, employ and train local workers and actively engage with the local community. At the end of the fund’s ten year period, the lessee would be given the opportunity to buy the land.

“From an investor’s point of view, leasing provides a stable cash flow based on rental yields and avoids much of the volatility that comes with direct exposure to agricultural markets,” he said.

While the fund has a ten-year life span, investor support and earnings will be calculated at the five-year mark. Investment is being sought from wholesale contributors with a minimum $100,000 investment.

Growth Farms has managed agricultural land for investors for nearly 20 years with properties across Queensland, New South Wales and Victoria. With a portfolio of 20 properties – valued with assets at $440 million – the company has made pre-tax internal rates of return of 10.4% for the last ten years.

The company currently leases around 10% of the land it manages, with strong demand for additional leased land. According to Mr Sackett, farms purchased by the fund could include sugar cane, irrigated grain and dairy properties, although favourable market trends and seasonal conditions would also influence purchasing decisions.

Growth Farm expects farmland prices to improve by 2-3% above CPI over the long term, while returns in high rainfall zones have averaged 6% over the last 40 years.

“[Farmland values were] driven by strong demand for quality broadacre and permanent cropping properties, with avocado, citrus, nut and table grape properties experiencing particularly strong demand.”

While agricultural lease models have traditionally been popular in the US and Europe, there are an increasing number of agricultural investment groups operating in Australia.

The US global asset manager Westchester has made bold moves in Australia, including the $50 million acquisition of Milton Downs – a 10,000-hectare parcel of land bought from Australia’s largest wheat grower in 2016.

Sources: Stock Journal, AFR

31 Jul

Pressure Mounts for Plastic-Free Food Value Chain

More consumers are opting to purchase foods free of single-plastic packaging. Image by mcstudio79 from pixabay under a CC0 license.

The world’s first plastic-free aisle has opened in a supermarket in the Netherlands. Retail chain Ekoplaza has included the plastic-free area amid the growing trend against single-use plastic items and in response to consumer demand. Instead of plastic, products are wrapped in biomaterials that compost within twelve weeks, according to Chief Executive Erik Does. Ekoplaza has absorbed the additional cost involved with eco-friendly packaging in order to maintain sales momentum.

The introduction of Ekoplaza’s plastic-free shopping is just one example of a growing trend against single-use plastic. Around the globe, an increasing number of independent retailers are offering a completely single-use plastic-free shopping experience, putting pressure on the bigger retailers to follow suit.

In the UK, retail chain Iceland has responded by promising to be completely plastic free by 2023, saying it is actively working with its suppliers to develop packaging alternatives. Most major UK supermarket chains have agreed to a pledge that will require all plastic to be reusable, recyclable or compostable, by 2025, although there is some scepticism about how committed they really are.

Closer to home, Australian supermarkets have also failed to commit to a complete eradication of single-use plastic. Both Woolworths and Coles have announced measures to reduce plastic and food waste, but neither has committed to a total ban of single-use plastic including items such as disposable straws.

“While we’ve made progress in reducing the amount of plastic in our stores, supported recycling labelling initiatives, and made improvements in energy efficiency, sustainable sourcing and reducing food waste, we know that more needs to be done to meet our customers’ expectations,” said Woolworths Chief Executive officer Brad Banducci.

Coles and Woolworths both phased out single-use plastic bags in the middle of 2018, instead offering customers reusable bags for a small charge, but many customers continue to be frustrated by big retailers’ lack of action when it comes to plastic packaging. Woolworths has been criticized for excessive packaging, especially on fresh food items, and more recently Coles has been under fire for its ‘Little Shop’ campaign, which rewards customer spending with miniature, collectable grocery items.

While the retail sector has a big part to play in reducing plastic use, some farmers and producers are also responding to the challenge.

In Gippsland, beef producer Paul Crock is investigating plastic alternatives for meat in an effort to reduce the amount of plastic involved in the meat value chain.

“Without putting too fine a point on it, meat uses a lot of plastic,” he said.

“It kind of has to use a lot of plastic. That’s the dilemma we’re in at the moment.”

Single-use plastic packaging is particularly significant in the meat industry, due to hygiene requirements.

Mr Crock has turned to European manufacturers to see if any suitable alternatives are available and he has even considered a product similar to sausage casings.

But Melbourne butcher Tony Montesano thinks the ideal solution may be hard to come by.

“Unfortunately you’ve got to use some [plastic]. You can’t exactly have just a flesh of meat. Where do you put it? You can’t exactly put it in your pockets,” he said.

Sources: The New Daily, Business Insider, The Herald, BBCSMH, ABC

31 Jul

NSW Government Pledges Extra $500 Million to Drought Affected Farmers

98% of New South Wales and more than 57% of Queensland are in a state of declared drought. Image by Jussarian available on Flikr on a CC2.0 license.

The New South Wales Government has announced an additional $500 million in funding to help farmers facing drought, tipping the total contribution to more than $1 billion.

The extension of the drought assistance package includes several new measures hoped to alleviate the stress on the State’s farmers. Almost half of the new funding will be used to provide farmers with subsidies to cover the cost of carting feed and water, backdated to include costs incurred since January this year.

$150 million will be added to the New South Wales Farm Innovation Fund, which helps farmers to develop resilience to climate fluctuations by improving farm infrastructure.

The New South Wales Government has also announced that it will waive Local Land Services rates, fixed water charges, agricultural vehicle registration costs as well as interest on existing Farm Innovation Loans.

As part of the boost to funding, provisions have also been made to provide farmers with access to mental health services, road upgrades and animal welfare services.

98% of NSW is in drought, or drought affected and some parts of the State have suffered dry times for up to seven years in a row.

More than 57% of Queensland is in drought, and with dry conditions facing many parts of Western Australia, South Australia and Victoria, there are calls for more intervention and assistance from state and federal governments.

Poor Uptake of the Farm Household Allowance

Figures released last week showed that up to 15,000 farmers eligible for the Federal Government’s drought assistance payment have not applied for it.

Farmers in drought can apply for the Farm Household Allowance (FHA), which provides a regular payment at a similar rate to the unemployment benefit. Around 8,000 people have accessed the support since 2014.

Many farmers have expressed their frustration about the red tape surrounding Farm Household Allowance, citing the paperwork as a major barrier. Some applicants have applied for the funding, only to have to wait for weeks and months before being approved for the payments.

Federal Agriculture Minister, David Littleproud, has instigated a review of the Farm Household Allowance with the aim of simplifying the application process.

He urges farmers to persist with the application process in the interim.

“I’ve called again and again for farmers not to self-assess whether they qualify for the FHA,” he said.

“Farmers need to use the free help we provide – Rural Financial Counsellors – and talk it through with them.”

“Government can’t make it rain, and heartbreakingly we cannot save every farmer, but we can and do provide free expert advice through Rural Financial Counsellors and I urge farmers to use it.”

While rain is forecast for much of southern Australia over the next week, it is unlikely to make any significant headway in terms of rectifying the deficit.

Screen Shot 2018-07-31 at 9.24.39 am

Image courtesy of the BOM. Rainfall forecasts for the week 31st July – 7th August. (Accessed 31st July.)

Sources: ABC, ABC

31 Jul

Fresh Opportunities for the Fruit and Veg Retail Sector

Consumer trends set to drive fresh produce growth includes an increasing need for convenient, healthy options. Image by igorovsyannkov, available at pixabay under a CC0 license.

Australia’s fresh produce sector offers great potential for future sales growth, according to a report released by Neilsen this month.

The analysis, which was originally published in Produce magazine, noted that although Australian households are spending more money on healthier packaged grocery items, sales of fruit and vegetables have remained relatively flat.

Despite the overall lack of growth, some products did perform exceptionally well, suggesting that there are opportunities yet to be realised. The dollar value of packaged salads and salad mixes, blueberries, mandarins and mangoes has increased in recent years, reflecting developing consumer trends.

Demand for these particular items gives some indication of what factors will drive growth in fresh produce sales over the next few years:

  • Premiumisation refers to items or formats that provide a better consumer experience such as eating quality or convenience. To date, Australian shoppers have indicated that they are willing to pay a higher price for these items, as evidenced in increasing sales of snacking tomatoes and ready to eat formats such as salad bowls.


  • Availability is also a significant driver for sales growth, especially when it comes to produce limited by seasonality. Sales of blueberries increased by 20% in 2018*, driven by oversupply, which caused the price to weaken – attracting a new set of consumers. Availability will also be driven by innovation in production – such as varieties that last longer on the supermarket shelf.


  • Even with the recent price increase of bananas, consumers continued to stick with Australia’s favourite fruit. The trend shows that the role and understanding of price is a significant factor when it comes to maximising industry sales and profits. Despite a price increase of 17% in the last 12 months to May 2018, dollar sales of bananas increased by 4.6%.


  • Keeping Australian consumers informed is a key strategy in influencing shopper decision-making. Australians are increasingly interested in choosing healthy options but are also influenced by food trends. A great example of this is the increase in popularity of avocados, in part due to the smashed avocado trend.


As the focus on health and well being increases – both in terms of consumer wants and marketers’ strategies – the fresh produce sector has a natural advantage. The challenge for the industry is to remain relevant and to connect with their target audience in an increasingly busy marketplace.

Sources: Nielsen

28 Jun

Crystal Gazing: The Future of Australian Supply Chains and Logistics

Mail delivered by drone could soon be a reality, as the logistics industry catches up with advances in technology. Image: The Interspect by Bako Gaboravailable at Wikimedia under a Creative Commons 1.0 license.

The Deakin Centre for Supply Chain and Logistics has recently completed a scenario planning study on behalf of the Australian Government with the aim of identifying national freight and supply chain priorities.

The study involved considering the potential for autonomous processes in place of traditional models, such as mobile driverless grocery stores as an alternative to supermarkets. Mail delivered by drone was another identified trend, with ‘RoboPost’ units capable of using public footpaths and bike lanes to make deliveries.

The study considered how the sharing economy model – developed by brands like Uber and Airbnb – could be used in supply chain management, with ideas including shared truckloads and leased warehouse space.

Other suggestions from the report included:

  • Freight-only airports and rail networks, separating passenger transport from freight
  • Decentralised farming and manufacturing, reducing the distance between producers and consumers
  • An increase in government terms and a reduction in government tiers – to facilitate better bipartisan support of infrastructure projects
  • The use of smartphone apps by consumers to track food provenance from the farm to their plate, increasing trust amongst shoppers
  • Automated, carbon neutral supply chains between Australia and China
  • Highly automated systems, and the impact upon human labour

Findings from the study will be used to inform a new national freight and supply chain strategy identified by the Government as essential to maintain competitiveness and respond to challenges such as automation, climate change and population growth.

“This strategy will inform the development of infrastructure that will take several years to implement and then needs to last decades,” said Dr Roberto Perez-Franco, a Senior Research Fellow at the Deakin Centre.

“So it’s critical we look deep into the future,” he said.

Dr Perez-Franco interviewed supply chain industry experts as part of the study, identifying a list of 200 drivers of change.

The information was then overlapped with four different scenarios for supply chain management in 2037, using a novel scenario methodology developed by the Massachusetts Institute of Technology in 2010, including work by Dr Perez-Franco.

According to the researcher, Australia’s city-centric population and congested rail and road networks were the biggest barriers to future supply chain performance.

“Urban congestion is a problem that will only get worse in the future unless urban planners include provisions for freight and supply chains into their plans for cities,” he said.

“Freight is expected to double over the next 20 years, so industry and all levels of government need to work together to ensure that happens smoothly and with a positive impact on the nation’s prosperity.”

“There is also a lot of anxiety about new automation technologies, like artificial intelligence and robotics, which promise to displace thousands of people in their jobs.”

“Companies and governments have the responsibility to ensure the displaced workers are retrained so that they can play meaningful roles in this brave new world.”

He believes that developing strong brand integrity is crucial in promoting Australia’s commercial advantage.

“‘Brand Australia’ could become even more important for the country’s exports,” he said.

“We can really set ourselves apart as a clean, green and ethical source of agricultural products if we make our supply chain a priority.”

Sources: Stock Journal

28 Jun

SA Riverland Attracts Sustainable Horticulture Development

Image: The development of a large scale horticulture enterprise at Monash offers a welcome boost to the southern Murray-Darling Basin economy.

A bold new agricultural development will see almost $210 million invested in the Riverland region of South Australia over the next five years, targeting the creation of more than 400 jobs.

The development of Coolamon Farms will include the planting of around 3,000 hectares to mixed horticulture, including almonds, citrus, and avocados. The project is located on Monash Station, a 10,000-hectare property currently owned and operated as a broad acre enterprise by local orchardist and businessman Mr John Gallard.

According to the project’s website, the operators aim to produce 30,000 tonnes of premium horticulture annually for both domestic and international markets, valued in wholesale terms at approximately $75 million AUD.

As well as implementing regenerative and sustainable farming methods, the operation of Coolamon Farms will involve the generation of solar energy to power the site’s irrigation requirements. Local council documents reveal that the project will involve the installation of a 26.4MW solar farm and diesel power plant for back up electricity generation.

Australian investment manager and project developer Kilara Capital, is aiming to raise the required capital over the course of 2018, with construction set to start in 2019. Initial crop yields are expected by 2022 with full production capacity achieved by 2026.

Kilara Capital’s Managing Director Ben Krasnostein confirmed that the majority of approvals required have been granted and the site is effectively shovel ready.

In terms of the irrigation, Mr Krasnostein is confident that the project partners will be able to secure the volume of water required for a development of this scale.

“The project developers and equity partners are working to formulate a comprehensive, flexible and sustainable water acquisition strategy,” he said. “It’s likely to be a mix of leased, owned and spot market entitlements.”

“The quantum of water is directly related to the final composition of horticulture crops and will ramp up over the 5 years of development.”

An additional income stream could come from the commercialisation of renewable energy infrastructure.

“The generation of renewable energy, beyond that which is required for on-farm operations is certainly an option. We are in the initial feasibility stage to see whether a larger, utility-scale Solar PV plant will stack up commercially.”

“We will use renewable energy sources behind-the-meter, to power the pumping and irrigation needs of the farm. This will assist in delivering a de-carbonised solution for the growing and production of all the off-take from the project.”

The Right Time for Job Creation

Publicity surrounding the Coolamon Farm development comes at a welcome time after The Murray-Darling Basin Authority confirmed that there was a downward trend in employment between 2000 and 2016.

The report showed that there has been a 37% decline in on-farm employment and a 16% decline in employment across all sectors, in the southern Murray-Darling Basin region.

While some job losses could be apportioned to on-farm efficiency gains and improvements in technology and automation, the report shows that up to 7% of on-farm job losses were a direct result of the Basin Plan.

Sources: Berri Barmera Council, ABC, Coolamon Farms, pp Solar

28 Jun

Grain Train: Australia’s Longest Locomotive Departs on Drought Mission

Image: A 1.8-kilometre long train left Mid North South Australia last week, on a mission to deliver grain to drought-affected farmers in New South Wales. Images from Farm Online 

Australia’s longest train has departed from South Australia on a mission to deliver much-needed grain to drought-affected New South Wales.

The 1.8-kilometre train left Crystal Brook station in the mid-north of South Australia last Wednesday after arriving a day prior at the Cargill GrainFlow site the previous morning to be loaded.

A total of 6,228 tonnes of locally grown wheat was loaded into 101 wagons under the supervision of Site Manager David Arbon.


“On the first day, using one rail bin, we loaded 72 wagons in six hours at a loading rate of 450t an hour”, he said.

Mr Arbon said that local team was proud to be involved with the record-breaking attempt.

“It’s our local farmers’ wheat that was delivered to our site that is going into those wagons, so it is great to see it headed off to market,” he said.

Watching the Grain Flow

Bianca Schuller – GrainFlow Regional Operations Assistant – was in charge of the Crystal Brook silo while the train was being loaded.

“The longest train I’ve ever filled at this site was 58 wagons, so to see this was pretty mind-boggling actually, it was awesome,” She said

According to Ms Schuller, GrainCorp has been so impressed with the efficiency of loading the train that another has been ordered to depart on July 9th.


The sale of grain from the Crystal Brook site provides more storage for this season’s harvest, without the need for building additional storage facilities.

“The more we can get rid of, the more we can receive without having to build any more infrastructure.”

The train was due to off-load at both Newcastle and Moree. It is believed that grain will be used for stock feed by drought-affected farmers.


Source: Farm Online

28 Jun

Paddock to Plane: Pangkarra Foods Take Flight

Image: Jim and Katherine Maitland, at their Clare farm – Anama Park. Image supplied.

The development of a paddock to plate brand has been a steady success for one South Australian farming family, and the welcome addition of a supply agreement with Virgin Australia presents a new opportunity for their premium food business.

Launched in 2011, the creation of Pangkarra Foods was a way for the Maitland family to diversify their operations from a standard grain-growing model and take more control of value chain opportunities.

Managed by Katherine and Jim Maitland, and Jim’s parents – David and Margot, the business operates from Anama Park – a 2,300-hectare farm growing grains, pulses and export hay, located in the Clare Valley.

Initially, the enterprise produced a line of premium, wholegrain pastas, using durum wheat grown on farm and processed in Adelaide. Product branding focussed on developing a reputation as a wholesome, healthy pasta – features which derive directly from protecting the integrity of the grain through traditional processing methods, including stone milling.

In 2016, Pankgarra added ready-to-eat chickpeas and a snack food line to their mix, capitalising on increasing demand for healthy alternatives and pulse products.

After 12-months of discussions and negotiations, Pangkarra Foods has recently secured a deal to supply ready-to-eat 25g snack packs for passengers on board Virgin Airlines domestic flights.

While the initial sale of 250,000 units has provided a welcome income boost, being able to build brand awareness with Virgin customers doubles as an attractive opportunity for Pangkarra.

“We are thrilled to be working with Virgin Australia in supplying the Pangkarra Roasted Chickpeas and Roasted Bean Mix to Virgin Australia passengers,” said Katherine Maitland.

“With such a captive audience eating and enjoying our products, the exposure and recognition of our brand is invaluable.”

According to Mrs Maitland, it’s a deal that’s already paying off for the business.

“In the domestic market, the promotional advantages with working with airlines helps sales in the retail shops. Since we have secured the Virgin Australia deal, we have had numerous enquiries from customers who have tried our pulses on the inflight menu, and as such, have sourced the product in their local IGA or Foodland.”

“We hope to build on potential wholesale opportunities, including working with some of the major supermarket chains. We also plan to grow our export markets, particularly in South East Asia, China and America.”

Despite the success of Pangkarra Foods, the Maitland’s see the enterprise as a ‘side business’ – albeit a valuable one – to their fifth generation family farming enterprise.

“Rather than having all our eggs in one basket…we have endeavoured to find other ways to sell to the market. By having a value-add business, we now have more appreciation of what we are growing, that is, we are growing food to consumer, rather than a commodity.”

31 May

On-Farm Abattoir Concept Wins MLA Innovation Award

Michelle Lally from Australian Micro Abattoirs accept the Producers Innovation Award from MLA Managing Director Richard Norton. Image supplied.

A FARMER-DEVELOPED micro abattoir concept has been nationally recognised as an innovative system component for the meat market.

South Australian Michele Lally accepted the MLA Producers Innovation Award for Australian Micro Abattoirs at the Rabobank Beef Industry Awards in Rockhampton this month.

With her husband Phil, Ms Lally started Savannah Lamb in 2009 – a small-scale producer of lamb with a focus on ethical, sustainable and stress free livestock handling methods.

Despite strong customer demand for Savannah Lamb products, the issue of processing small numbers of animals became a major barrier for the brand.

Using commercial-scale abattoirs consumed so much of their time, the Lallys spent up to four days per week on the road taking livestock to be slaughtered and butchered, as well as delivering stock to distributors and customers.

As well as the time spent away from the farm, the outgoings associated with processing – freight, commission, yard fees, freight and condemnation losses – represented some of the biggest costs for the business, eating into their profit margin.

In addition to the time and cost factors, there is a general risk the meat that producers receive back is not from the livestock that they delivered to the abattoir.

‘When a brand promotes food provenance as a key feature, they must be certain their product has integrity and authenticity, or it can damage their reputation’ said Ms Lally.

‘We had a good relationship with our abattoir and we had a good system in place so we were certain that our returned carcasses were the animals we’d produced, but we know many other producers who have not been able to guarantee their supply chain system integrity”.

A Gap in the Fence

In response to the ongoing issues, the Lallys set about developing a pilot version of a micro abattoir on their own Clare Valley farm, quickly generating interest from other small-scale meat producers.

Seeing the potential for a fully integrated micro abattoir product and service offering, Ms Lally started Australian Micro Abattoirs as a standalone enterprise.

The ‘plug and play’ units are capable of processing both large and small animals, and are available with add-on features such as dry ageing capabilities, commercial kitchens and waste management facilities.

With the ability to slaughter and process animals on-farm, Australian Micro Abattoirs hopes that farmers will be able to better manage output costs, product value and quality, throughput and animal welfare standards.

‘By building and installing small-scale abattoirs, meat producers can take control of their supply chain’.

The service offered by the company comes with a full consultation program to match farmers with the right unit for their throughput, as well as additional consultancy services such as digital provenance, marketing and branding services and waste management advice.

Abattoir Closures Threaten Industry

Australian Micro Abattoirs comes at a critical time for Australian livestock growers. An increasing number of medium-sized abattoirs have been forced to close due to low profitability, leaving few options for those with small numbers of animals.

As well as providing a solution for paddock-to-plate growers, micro abattoirs offer a solution for small-scale livestock producers to band together into a cooperative arrangement, avoiding the need to transport livestock long distances prior to slaughter.

30 May

SuperFarm: WA’s Largest Cropping Property Up for Grabs

Image: Western Australia’s largest holding of cropping country is on the market, and could be yours for a mere $80 million. Image from The West.

WA FARMER AND machinery dealer John Nicoletti is selling his 200,000 hectare property – set to be the biggest transaction of broadacre farming land in Australian history.

The property is made up of more than 30 original farms across the West Australian Wheatbelt including 76,000 hectares of owned land and 127,000 hectares of leased land.

The holdings also include more than 25 dwellings, 12 shearing sheds, 15,000 tonnes of grain storage near CBH’s receival site at Merredin, 50,000 merino ewes plus lambs, plant and machinery.

In an effort to reduce his debt level, Mr Nicoletti sold 70,000 hectares in 2015 to CK Life Sciences for $36 million – the biggest parcel of land ever sold in WA history. The property has been leased back to Mr Nicoletti on a ten-year agreement, with the balance to the new owner.

‘Strong Buyer Interest’

Transaction manager Damian Bryce says that there has been strong global interest in the sale of the Nicoletti property.

‘Given the level of interest we’ve had from the media, we’ve had lots of enquiries from as far as Canada, Sweden and Ireland’.

‘The preferred option for the vendor would be to sell the holdings as a whole, but we would also consider multiple transactions if that’s what the market wants,’ he said.

While the property is likely to attract attention from investors, the fragility of the live export market could prompt interest from buyers seeking to secure live sheep deliveries.

‘As the properties are Middle East facing – in terms of sheep and grain it could be appealing to someone from the Middle East, or foreign funds looking to invest and there are not many assets of this quality and scale to invest in’.

A flock of 50,000 merino ewes plus progeny has been built up over the last few years, but according to Mr Nicoletti his decision to sell the property is not linked to the live export saga.

‘There is an upheaval and a live export ban would affect prices, but the good thing is there is not abundant numbers of sheep in WA, and the wool price is at record levels’ he said.

The sale includes up to 80,000 hectares of sown crops this year, depending upon opening rains.

The vendor will continue to be linked to agriculture through the operation of his John Deere dealership – Ag Implements, which has branches in five towns across the Wheatbelt.

Sources: The West, Ag Implements

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