Category: Sustainable Settlement and Agriculture

The fall in global food prices as a result of the economic downturn may have reached the bottom according to international agency GlobalDairyTrade. The agency reported that an increase in spot prices for whole milk powder in late December is a sign that buyers are re-entering the market. As a result of the global economic downturn companies and governments stopped buying and began eating into stockpiles built up during 2008 and the global scare over food shortages. Prices for dairy products have halved in the last six months, wheat and other grains have fallen by more than one third. They are still higher than at anytime before 2006.

Global Dairy Trade announcement

IMF Commodity Prices Index

 

Read it in The Land

THE NSW Government this month re-affirmed its decision to mandate 10 per cent ethanol in all regular unleaded petrol sold in the State by 2011, but finding enough ethanol could be a stretch.

Proposals to build ethanol plants in NSW are at worst floundering or at best grinding their way slowly through the approval processes.

The exception is the Manildra Group which is in the process of ramping up ethanol production at its starch plant at Nowra.

According to Manildra chairman, Dick Honan, the expansion will lift annual production to 240 million litres a year, equivalent to about four per cent of the State’s petrol consumption.

“For 10 per cent ethanol there will have to be another player to do it,” he said.

But where the remaining six per cent for the target will come from is in the lap of the gods, and the crash in the world oil price in recent months is unlikely to spark latent ethanol projects into life.

Read it in The Land

James Packer is set to sell off his family’s huge rural holdings built up over a quarter of a century, as the credit crunch severely dampens investors’ ability to borrow.

Reports indicate that British private equity firm Terra Firma is interested in buying the Packer family’s 16 properties, for about $425 million.

Although Packer was considering selling a stake of his Consolidated Pastoral Company to private equity early last year, he had intended to retain his family’s links to an iconic Australian business that his father, the late Kerry Packer, began 25 years ago.

But the credit crunch seems to have put paid to those hopes.

Packer will sell 90pc of Consolidated Pastoral, Australia’s second-largest cattle owner, to Terra Firma and allow Ken Warriner, a long-time family friend and boss of the cattle empire, to keep his 10pc holding.

The sale will force the billionaire, who worked as a jackeroo on one of the family stations in the Northern Territory as a teenager, to relinquish his title as one of Australia’s largest landholders.

Terra Firma is not the first overseas investor to buy great swathes of Australia’s outback cattle stations in recent years.

In 2005, the Sultan of Brunei bought five cattle stations, joining other investors from Malaysia, Indonesia, Argentina and the US.

The pending sale, expected to be finalised early in the new year, comes at a high point for the price of remote cattle properties in northern Australia, because of the expected growing demand for beef exports in China and India and weakness in the Australian dollar.

Packer is also rumoured to have quietly put the last of his media interests — a 38pc stake in Consolidated Media Holdings — on the auction block.

His gambling investments have been under pressure.

Crown has been forced to put in an extra $C20 million ($A24.8 million) to fund nine casinos in Canada through a joint venture with Macquarie Bank.

Earlier this month, Crown launched a $300 million equity placement to strengthen its balance sheet to help weather the gambling downturn in the US, Macau and Australia.

Packer’s pastoral interests are little known to those outside the pastoral industry, as part of his extensive financial empire.

Consolidated Pastoral is a part of the family’s private company, Consolidated Press Holdings, and owns 17 beef-producing properties — mostly in the Northern Territory and Queensland — covering more than 5 million hectares, or almost the size of Tasmania. It employs 139 people, nearly half of whom are station hands or jackeroos.

The properties include the 1 million-hectare Newcastle Waters station in the Northern Territory, bought in 1983 (pictured) and also home bases for Ken Warriner when he in the cattle country.

Like his love for television, James’ father showed a close interest in the family properties. “It is one thing that Kerry really liked about it, compared to television,” Warriner once said.

“He said, ‘You guys tell each other everything. You’ve got nothing to hide; it’s all open.’ He had a lot of time for the people in the north because they copped it pretty tough.”

The cattle are either exported to South-East Asia via Darwin, or to Japan, or sent to the Australian market.

They are bred on the vast outlying properties, then trucked south where they are fattened on properties in southern Queensland.

It is unclear whether the latest sale will involve just the stations or whether it will include Packer’s interests in the live-cattle export business and processing.

Packer plans to sell only 16 stations because he would be loath to even consider parting with the flagship family property, Ellerston, in the Hunter Valley, NSW.

Parts of Ellerston have been in the family since 1956 and James’ father is buried there.

Consolidated Pastoral racked up a loss of $20 million in 2007-08, according to the latest financial statement filed with the Australian Securities and Investments Commission in November. But this was an improvement on a loss of about $24 million the previous year and $36 million in 2005-06.

The latest accounts show the company’s revenue of $36 million a year.

Consolidated Pastoral has total debts of $684 million, including $459 million owing to its controlled entities and $225 million in non-current bank debt.

Its 300,000 head of cattle are valued at $145 million.

 

From The Land

Farmers who don’t grow genetically modified (GM) canola will be forced to sue those who do, over economic losses in a move that could divide communities, a farmers’ group says.

Farmers are outraged the Western Australia government has decided to allow GM canola crops to be planted before a report on the technology had been handed to the state government.

Up to 1,000 hectares of GM canola will be planted in the 2009 growing season, as a result of the decision.

WA is the third state to allow GM crop technology to go ahead – the NSW and Victorian state governments changed their policies earlier this year

“It’s a blatant disregard for the process that was promised,” spokeswoman for the Network of Concerned Farmers Julie Newman said.

Ms Newman is part of an industry reference group that was finalising the report, expected to be released by the end of this year.

The report is expected to detail concerns that GM doesn’t stack up to the high praise it has received overseas, both “agronomically and economically”.

As a result of the controversial decision, farmers who dion’t support the practice won’t be able to segregate from the GM sector and legally wouldn’t be able to defend themselves, she said.

“Non-GM farmers will be very hard pushed to sell the product as non-GM.

“If you have a look at the canola now, that’s coming out with a non-GM label on it, (that’s) because they are forcing non-GM canola.

“You won’t be able to get that, once it’s released in every state.”

The report is also expected to show that risk management doesn’t exist, that legal defence would be inadequate and there would be no protection for farmers and no choice for consumers, Ms Newman said.

“By ignoring risk management, it means farmers of non-GM crops have to sue the farmers growing GM for any economic loss that they cause.

“And that causes major rifts within the community.”

Ms Newman said the group would be seeking further answers from the WA government over its decision.

Australia‘s National Farmers Federation NFF will vote this week to change its constitution and allow international corporations to become full members. Traditionally a farmers’ body, the NFF has recently lobbied government on behalf of seed, fertiliser and pesticide companies. A combination of the drought, international financial instability and scandals involving quasi-government organisations such as the Australian Wheat Board has made farmers cautious about aligning their interests with other organisations. Several state farmers associations have left the national body, feeling it has lost its way. Head of the National Farmers Federation, David Crombie, said that farmers will not lose their majority ownership of the NFF.

 Related article from the Land

Mr Crombie said corporate agribusiness and other affiliated agricultural groups, which he would not name, would be offered a full membership class with full voting entitlements up to a certain limit.

“But the critical issue put forward to us in all our meetings with farmer groups is that we retain farmer control of NFF,” Mr Crombie said.

“While new members would be offered a full membership class, the management of affairs and the organisation would remain in the hands of farmers.

“The model we are proposing and putting to our members next week would never see NFF in a position where State farmer organisations and commodity groups do not have the majority.

“We are about preserving the majority shareholding in farmer hands.”

Mr Crombie acknowledged NFF’s “long and deep heritage” as a representative voice for farmers which he did not want thrown away with any major structural change.

He said change was still needed to help broaden the representation of the lobby group and spread it across the agricultural supply chain, representing changes in the sector now and through until 2020.

“We need broader views in policy development, and new membership will give us that,” he said.

“We need better research and better unity of purpose.

“We also need to reduce duplication in agricultural representation and look at the issues we need to tackle at the national level to ensure we are doing that as effectively as possible.”