Amazon’s organic problem for farmers

Colin Jackson Bush Chat, Current News, Horticulture, Markets, Produce

GLOBAL TECH GIANT Amazon’s expansion into food retailing has wowed the financial markets, but is a real problem for farmers. In the USA, the online retailer Amazon (worth $US470 billion) has bought Wholefoods for $US13.7 billion to accelerate its move into food retailing. Big dollars for an average investor, but just a minor side bet for Amazon. That caused the share price of Woolworths and Coles to slide in Australia because Amazon is stirring the Sydney, Melbourne and Brisbane industrial shed market, buying-up huge distribution centres for their move into Australia. The financial market experts are all excited about the possible disruption to our grocery market, with predictions of drones delivering fresh produce to the front door of urban consumers. And Amazon/Wholefoods is particularly aimed at organic foods. The hipsters can hardly hold their pants up. But, and this is just a very practical, down to earth ‘but’, what about the farmers and food producers and packers and manufacturers? When Aldi last year started its push into fresh produce, it caused a stir in the produce markets and supply chains. And they are a minnow compared to Amazon’s financial firepower and market ambitions. A further complication is that Amazon, in …

TPP to go ahead — without Trump’s USA

Colin Jackson Current News, Markets

TRANSPACIFIC Trade Ministers meeting in Chile decided to go ahead with the TPP — without the USA. Australia’s Trade Minister, Steven Ciobo, said all countries were dedicated to progressing the TPP. Japan was particularly enthusiastic — a good sign for Australia’s agricultural producers — as that may accelerate market openings beyond the bilateral agreement. Discussion about how to include China (not in the TPP and offering its own trade agreement) and the USA was overshadowed by practical issues about how to progress issues such as a common digital document platform (which could be a huge advance for Australian exporters), food and packaging standards, and dealing with sensitive items such as local food protection. While it may be dismissed as a talkfest to keep TPP alive through the Trump administration, officials said progress on issues such as import protocols and simplifying ‘paperwork’ would in themselves have major advantages, especially in the food sector. The fact that countries with major export potential for Australia, such as Japan, Vietnam and Indonesia, supported TPP continuing highlighted their nervousness about a China-dominated trade pact, as well as their commitment to opening trade.

Why farmers must fight — and governments must be fairer adjudicators

Colin Jackson Cotton, Current News, Horticulture, Livestock, Markets, Sugar

AGALERT DOESN’T APOLOGISE for concentrating so much on the Wilmar dispute, even for all those farmers who don’t grow sugar cane. That’s because it goes to the heart of modern farming and current business practices. It’s a very 21st century issue much at the heart of current frustration with the political and business system by the mass of populations in western democracies around the world. Politics and business is not regarded as being about ‘what’s fair’ and ‘what’s good for as many as possible in our populations and for our country’. It’s about who can aggressively win the most. A recent stockbroker report praised a number of companies as terrific investments because they cornered a monopoly which gave them pricing power over customers, and buying power to screw suppliers as employees. That’s what CEOs earn the very big bucks for. To put their conscience in a box and grab monopoly, and screw away at everyone’s they deal with — all, of course, behind the nice politically correct mission statements about serving customers, suppliers, employees, etc, etc. CSR was a tough, paternalistic, authoritarian sugar miller for a century, but they took the big bucks from Wilmar — $1.7 billion or about …

Winter crop production forecast to hit record high of 52.4 million tonnes

Colin Jackson Current News, Markets

TOTAL AUSTRALIAN winter crop production is forecast to increase by 32 per cent in 2016-17 to a new record high of 52.4 million tonnes. Acting ABARES Executive Director, Peter Gooday, said above average rainfall in September, followed by mild spring conditions, had ensured good soil moisture for the critical grain development period. “Wheat production in 2016–17 is forecast to rise by 35 per cent to a record high of 32.6 million tonnes,” he said. “At the same time, barley production is forecast to rise by 24 per cent to a record high of 10.6 million tonnes, and canola production is forecast to rise by 22 per cent to 3.6 million tonnes — which would be the third-highest on record. “Chickpea production is also forecast to reach a record high of 1.2 million tonnes this year — a rise of 21 per cent that reflects an estimated increase in planted area and a forecast rise in the average yield.” Mr Gooday said that some cropping regions had been hard hit by seasonal conditions this year. “Across the nation, however, total production is forecast to be higher in every state.” Mr Gooday also said that total summer crop production was forecast to increase by 21 per cent to around …

The Donald confuses Ag markets

Colin Jackson Current News, Markets

DONALD TRUMP is doing to Ag markets what he did to Hilary Clinton — keep them off balance and confused. And that’s without saying a word. Ag markets are confused and concerned, mainly by the threat of a trade war. The USA is sitting on one of its largest stockpiles of grains — just when supply is also growing in Russia, Ukraine and South America. It was revealed yesterday that the Black Sea wheat has been selling actually for half, already lowering world wheat prices. This has been because of poor quality, erratic logistics (and concern about storage capacity for next year’s giant crop), and the desperate search for foreign currency by Ukraine and Russia. No wonder so many Australian farmers are bypassing grains to grow the various beans and lupine in sudden demand in southern Asia. Mungbeans at up to $1,100 a tonne are most attractive. And then Trump adds to the uncertainty because, if China or the Middle East decide to boycott US grain in trade wars promised by the incoming president, analysts suggest lots of casualties. No wonder the big trading companies are being hesitant about taking-up futures contracts. And especially if interest rates are increased by the USA Federal …

Strengthening agricultural ties with China

Colin Jackson Current News, Markets

AUSTRALIAN FARMERS, researchers, and agricultural industry experts will play a growing role in meeting global demand for high quality food products, according to Assistant Minister to the Deputy Prime Minister, Luke Hartsuyker, who departs Australia today for Beijing to attend the China Food Security and Food Safety Summit. “Improving global food security and food safety requires close and cooperative relationships, with an emphasis on open dialogue, knowledge sharing and the application of innovative technologies,” said Mr Hartsuyker, who is representing Deputy Prime Minister, Barnaby Joyce. “Both Australia and China place enormous value in our agricultural sectors and recognise the importance of agriculture in building the wealth and lifestyle of our nations. “Governments and industries of Australia and China are committed to working together to harness research and development, as the need for agricultural productivity becomes ever more important.” Minister Hartsuyker said the visit also presented an opportunity to reflect on the success of the China-Australia Free Trade Agreement (ChAFTA), which entered into force in December 2015. “China has become the world’s second largest importer of agriculture, food and fishery products, worth almost US$120 billion in 2014,” Minister Hartsuyker said. “China has also become Australia’s biggest market for agricultural products, with …

Good news in latest ABARES crop report

Colin Jackson Current News, Markets

FOR THE first time since 2007–08, winter crop production is forecast to increase across all states, according to the latest Australian Crop Report by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). Acting ABARES Executive Director, Peter Gooday, said winter crop production forecasts were very positive, thanks to very favourable seasonal conditions over winter and a favourable outlook for spring rainfall. “Total winter crop production is forecast to rise by 16 per cent in 2016–17 to a record 46.1 million tonnes, driven by significant increases in forecast production in Western Australia and Victoria,” Mr Gooday said. “Seasonal conditions in most cropping regions during winter were very favourable, and crops are generally in very good condition at the beginning of spring. “In the eastern states, including South Australia, winter rainfall was average to above average and in Western Australia was more variable but timely. “In some regions, particularly in parts of New South Wales and far southern Western Australia, yields could be constrained by waterlogging, which resulted from very high winter rainfall. “Wheat (up 16 per cent to 28.1 million tonnes) and barley (up 11 per cent to 9.5 million tonnes) production are both forecast to be the …

Local barley crop facing record against changing world market

Colin Jackson Current News, Markets

AUSTRALIA may be facing a record in barley, as well as wheat — depending how significantly rain has helped, rather than hindered, the crop — potentially presenting a challenge for merchants negotiating a transformed world market. While commodities bureau ABARES has downsized the nation’s barley sowings this year by 50,000 hectares to 4.05m hectares, Nidera Australia is expecting a healthy rise in volumes. In essence, Australian barley output could defy the drop in sowings: “Whilst barley planting nationally is down a little compared to last year, the ideal growing conditions are seeing production estimates topping 10m tonnes,” said Peter McMeekin, origination manager at the grain merchant. Apart from being a 13-year high, that would be well above the 9.03m-tonne crop expected by Abares — which is expected next week to revisit its forecasts — as well as beating forecasts from other leading commentators. The International Grains Council pegs the crop at 9.6m tonnes, while the US Department of Agriculture foresees a 9.4m-tonne harvest. May beat the record This year’s harvest “even has the potential to exceed the previous record of 10.4m tonnes set in 2003-04,” Mr McMeekin said, flagging the boost to yield prospects from ample moisture in major growing …

Canola crop

Aerial crop spraying of waterlogged canola sees lift in forecast

Colin Jackson Current News, Markets

INDUSTRY EXPERTS have lifted their forecast for Australia’s canola harvest, citing decisions by some farmers to enlist crop-spraying planes to keep in check levels of disease being encouraged by wet conditions. The Australian Oilseeds Federation lifted by 50,000 tonnes to 3.39m tonnes its forecast for Australia’s canola production this year, taking the figure further above the 3.10m tonnes harvested in 2015. The upgrade to the forecast — which compares with a harvest estimate of 3.24m tonnes made in June by Australia’s official commodities bureau — was attributed to rainfall which “has been mostly adequate — through most of the canola growing regions during plant establishment and early growth stages.” “This has placed the canola crop in good stead.” Heavily infected However, the federation — whose harvest estimate is below the 3.50m tonne-crop forecast by the US Department of Agriculture — acknowledged that rains had been too heavy in some areas. For New South Wales, the group slashed its harvest estimate by 90,000 tonnes to 810,000, putting a drop in production on the cards, citing wet conditions which, besides inundating some crops, are encouraging disease. “The earlier sown crops are tolerating wet condition better than the later sown crops which have …

Australia’s wheat crop set for “stellar yields” — Lanworth

Colin Jackson Current News, Markets

AUSTRALIA’S WHEAT CROP could be in for a dramatic upgrade, potentially to a record high, thanks to wet weather which has put “stellar yields” in prospect — if stoking the quality worries already live in the world market. Forecaster Lanworth pegged the Australian wheat harvest this year at between 24.3m and 29.3m tonnes, with a central estimate of 27.2m tonnes, flagging “overall beneficial conditions during the growing season.” Indeed, satellite imagery shows “record vegetation density across nearly all major growing regions,” the analysis group said, adding that Australia was “on track for stellar yields” in wheat. The group’s harvest forecast is well above the 25.4m tonnes expected by ABARES, the official Australian commodities bureau, and would represent a sharp improvement on last year’s harvest of 24.2m tonnes. The estimate is also above the 26.5m tonnes expected by the US Department of Agriculture, and a little ahead, too, of the 27m-tonne forecast last week by the International Grains Council, upgraded by 1m tonnes. Record production? However, even Lanworth could be significantly underestimating crop potential, according to the Australian arm of crop trader Nidera — which says a record harvest could be on the agenda. “The largest domestic wheat crop 29.6m tonnes …

Cotton crop, St George

ICAC lifts cotton price hopes — futures sink a little

Colin Jackson Current News, Markets

THE INTERNATIONAL Cotton Advisory Committee lifted expectations for average cotton prices this season to a clear three-year high, even as futures lost some of the buoyancy that saw them soar four per cent on Thursday. The ICAC raised by three cents a pound to 75 cents a pound its forecast for average cotton prices, as measured by the Cotlook index of physical values, in 2016-17. The upgrade, to a figure representing a five-cent uplift year on year, implies values holding around current levels, with the Cotlook A on Thursday pegged at 75.0 cents a pound. And the ICAC’s revision to its price outlook reflected a downgrade of 490,000 tonnes to 18.14m tonnes in its forecast for global cotton stocks at the close of the season. That took the stocks forecast well below the high of 22.3m tonnes reached in 2014-15, and indeed put them close to a five-year low. Compared with consumption, to form the stocks-to-use ratio closely watched as an indicator of price potential, inventories will end the season at 76 per cent, down five points year on year. Chinese stocks shrink The committee highlighted the drain on Chinese inventories from auctions from huge government reserves built-up thanks to a …

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