THE Australian cotton sector is facing its toughest outlook in more than a decade, as ongoing drought slashes local production prospects to just 735,000 bales in the 2019/20 season, according to a recently-released report by Rabobank.

According to Rabobank analysis, it will be a long road to recovery, even in the event of significant water inflows next year, with any recovery to ‘full output potential’ – of around four million bales – only possible from the 2021/22 season.

In its report, Drought Drags Cotton to Decade Lows, the specialist agribusiness bank said all major production regions would “feel the pinch”, with southern Queensland and northern and central New South Wales the hardest hit. 

“We anticipate 735,000 new season bales will be picked next year, in line with broader market expectations of between 720,000 and 800,000 bales," Rabobank cotton analyst Charles Clack said.

“This would see the Australian crop come in at just 16 percent of ‘peak’ production last seen in the 2017/18 season and the lowest output since the 2007/08 drought.”

The result is a cut in exports by 50 percent year-on-year, he said.

FORWARD CAUTION

Looking further forward, the report outlines two scenarios for Australian cotton production out to the 2021/22 season.

“The first scenario assumes extensive rainfall across the east coast through autumn and in to winter,” Mr Clack said. “In this scenario, 2020/21 season production could potentially recover to around 2-3 million bales.”

Mr Clack said while lack of seed availability and uncertainty around water allocations, coupled with alternative summer crop plantings, would limit a ‘full recovery’ (of above four million bales), it was possible – under this scenario – in the 2021/22 season.

“The other scenario considers the impact of ongoing drought conditions,” he said, “which would see production fall further to around 500,000 bales.”

While the outlook is uncertain going forward, Mr Clack said the current supply tightness was likely to support domestic cotton prices, with prices expected to sit around $600/bale by the end of 2020.

“This outlook is also being supported by the uptick in global cotton prices and the depreciation of the Australian dollar, as well as China continuing to source cotton from non-US origins amid the ongoing trade war,” Mr Clack said.

Mr Clack said while China was likely to purchase some cotton from the US to fill orders, other countries, such as Brazil, are likely to gain a larger market share in China.

“Longer-term, this poses a risk for Australia, as there will likely be additional rivalry with Brazilian supplies – and hence a more competitive price environment – once production recovers,” he said.

 

ends

By Leon Gettler >>

TOMMY HUPPERT, the CEO of Cannatrek, believes medicinal cannabis will be the biggest cash crop in the country, and an export earner.

Cannatrek has just got permission from Greater Shepparton City Council to build a $160 million medicinal cannabis production facility near Shepparton, Victoria. When completed, it will be one of the world’s largest medicinal cannabis facilities.

The facility will include a 160,000sqm growing area under a giant high-technology glasshouse, as protected cropping, maximising the yield of the plant.

Cannatrek is using technology pioneered by the Dutch, pioneers of the flower industry, who are world leaders in protected cropping. When operating at full production, the company aims to produce 160 tonnes of medicinal cannabis per year.

Mr Huppert said the medicinal cannabis market is enormous. 

He said while cannabis had been around for thousands of years, it is still new from a regulatory perspective as it has only been two and a half years since Australia’s Narcotics Drugs Amendment Act was passed in 2016. Early movers are now receiving licences from the Office of Drug Control and commercialising their produce.

“We believe there are 300 to 500 eligible patients under the current scheme,” Mr Huppert told Talking Business.

“Most of those patients don’t even know they’re eligible so we’re finding more and more people, when they’re visiting their GP, are asking about an alternative medicine to what’s traditionally been prescribed – and medicinal cannabis has now come as an optional therapeutic product of choice.”

READY TO ROLL

Cannatrek has operations in Queensland and phase one of the Shepparton plant will be started towards the end of this year, Mr Huppert said, and can potentially be in production next year.

Mr Huppert said it would create many jobs.

“It’s a very hands-on product, it is labour intensive,” he said. “For our facility in Shepparton, we believe in excess of 400 jobs will be created and that’s in the facility itself.

“That’s not including the maintenance and down supply chain jobs which will be required to support the entire industry,” he said.

“I believe the industry will need more than 10,000 jobs in Australia, industry-wide, over the next few years, as the industry develops.”

Mr Huppert said the legislation provided scope for Australia to become a major exporter of medicinal cannabis to countries that might not have the right climate conditions to grow it themselves.

“We have sun, obviously we’re a barren land. However, we do have water resources so Australia is really in a perfect ideal position globally to be a production source for the world,” he said.

Mr Huppert said Europe could be a major market as it do not have the ideal climate. Another market was the Asia Pacific region, with Japan bringing in legislation for access. 

“I really believe this whole industry is a one-in-a-hundred year event. Similar to prohibition of alcohol, we’re seeing it in our generation post-prohibition for the regulation of medicinal cannabis.”

www.cannatrek.com.au

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Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.

By Leon Gettler >>

CROPLOGIC, which spun out of the Institute of Plant and Food in New Zealand, the equivalent of the CSIRO and which is partly New Zealand government owned and listed on the ASX, is using the latest agricultural technology to expand into the United States.

It is operating in states like Idaho, the largest producer of potatoes, Oregon and Washington, and partners with farm agronomists.

The crops vary from region to region, from state to state.

In Washington, the big crops are row crops like potatoes, onions and carrots, with some cherries and a strong wine industry, Idaho has a big dairy and potato industry, Oregon is a big pear producer, and is also producing hemp.

In Australia, in the Mildura office, the focus is on citrus, almonds and viticulture. 

 

THREE UNIQUE PRODUCTS

CropLogic CEO James Cooper-Jones said CropLogic has three agtech products: CropLogic Real Time, CropLogic aerial imagery and CropLogic Predict.

CropLogic Real Time is a system of soil moisture sensors that go down anywhere from 2ft to 5ft into the soil and provide readings to a desk top and mobile app.

“That allows the grower to have in their palm the minute detail of how their moisture is reacting,’’ Mr Cooper-Jones told Talking Business.

CropLogic also provides infra-red aerial imagery of plants and crops.

“A healthy plant will give off a different infra-red image to a non-healthy plant or a stressed plant,” Mr Cooper-Jones said. “That allows us to produce images for growers that’s shows areas of their fields that might be stressed that may not be visible to the naked eye.

“When you’re talking about a growing period of say a potato crop of 16 weeks, you lose two weeks. You’re losing a significant amount of time of the optimum growing period.

“With this technology, that allows growers to tackle the issue and get the optimum growing days for each of their crops.”

 

AG SCIENTISTS HELP DECISIONS

Mr Cooper-Jones said CropLogic also brings in agricultural scientists to look at the data and help producers deal with the problem.

He said this allows the grower to decide what to do at the “click of a button”. 

CropLogic has had spectacular success in the US with a five-fold increase in the take-up of its technology.

“In some of our zones, and some of our target crops, we’re servicing as much as 30 percent of the market and that’s just astounding in just two seasons,” Mr Cooper-Jones said.

He said in Australia, growers were now enjoying increased citrus prices but the cost of water had also doubled in the Riverina, the Sunraysia and the Mallee regions.

“There’s no lack of demand, the price is going up, but increasingly water is becoming scarce so that’s where you’re seeing increasingly growers starting to look for digital systems,” he said.

www.croplogic.com

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Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.  

By Leon Gettler >>

PROVENIR, an Australian ag-tech firm, has used technology to develop the perfect solution for Australian cattle farmers battling to produce quality beef in the face of closing abattoirs.

Provenir has produced a mobile abattoir that’s delivered to the farm. It is the first vertically integrated, commercially licensed mobile abattoir to process livestock at the point of production – on the farm where they were raised.  

It means farmers don’t have to transport cattle over long distances to abattoirs, putting less stress on the animal and ensuring it is in good shape.

Chris Balazs, the CEO and co-founder of Provenir, said the company had used technology to put a static abattoir in the back of a semi-trailer.

“What that enables us to do is produce a product that is of premium quality and has high welfare attributes to it as well,” Mr Balazs told Talking Business.

“We go to the farm, the animal doesn’t’ have to be transported, hence the quality aspect, and the fact that they don’t have to go through the stress of transportation, therein lies the animal welfare aspect,” he said.

Mr Balazs said this was critical because the meat industry has consolidated and many abattoirs have closed down. As a result, farmers have to transport the cattle over long distances to areas close to capital cities.

He said the cattle have glucogen reserves which get consumed through any stressful process. The longer that process, the more glucogen gets consumed and that compromises the tenderness of the meat.

“That’s one of the great frustrations,” he said. “I’m a farmer. You spend years growing them and keeping them in optimal conditions and all the farmers are forced to put them on the back of a track to get them to a saleyard or an abattoir.”

”We are really failing the animal and the meat quality in the final hours and days of the animal’s life.”

MOBILE ABATTOIR GAME CHANGER

Mr Balazs said when the truck gets on to the farm, the roof raises, a ramp comes out the side and it turns into mobile abattoir with the knocking box and hoists, evisceration and halving stations as well.

”It’s the same as an abattoir but the trick has been to get all of those attributes into quite a confined space.”

Provenir has also developed QR codes that allow the consumers to know which farms the cattle is coming from. All they have to do is check the code on their phones.

He said Provenir initially is operating out of New South Wales in the Riverina but is looking to expand to other states. 

Provenir has also been approached by interests in Asia.

www.provenir.com.au

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

NEW disease fighting technologies and expanding the emerging Australian native food and medicinal agriculture industries are a major focus of new research funding by the Federal Government.

Senator Simon Birmingham, in his former role as Education and Training Minister, and Agriculture Minister David Littleproud jointly announced three new major research investments, backed by $13.6 million from the Federal Government. The funding is aimed at three emerging sectors of Australia’s agriculture industry that could be “game changers” according to Senator Birmingham.

Sen. Birmingham said Griffith University would receive $5 million for a new Australian Research Council (ARC) Research Hub to develop new technologies to fight disease and reduce the time and the cost of protecting crops and livestock from disease.

“Whether it be Australian lobster farming or our iconic strawberry industry, our agriculture industry will continue to face unique and new risks from disease,” Sen. Birmingham said. 

“In recent years, we’ve seen first-hand the crippling impact disease can have on local farming industries. This is a real opportunity for technology companies and industry to work together and investigate how new machines and robotics can better support our farmers to fight the diseases that threaten their livelihoods.

“The new technologies that will be developed from this hub will not only benefit Australian farmers but also help the start-up technology companies behind these innovations to grow and tap into markets around the world.”

Minister Littleproud said La Trobe University would receive $5 million to establish a new ARC Research Hub for Medicinal Agriculture to help further develop the industry in Australia.

“This research hub will give Australia an edge as we build a local medicinal agriculture industry,” Mr Littleproud said.

“Researchers will work with businesses from beginning to give them the knowledge and the right gear to do well.

“The hub will help researchers share ideas on cultivation and extraction techniques, the discovery of new medicines and more. We’re giving a kick start to Medicinal Agriculture.”

Sen. Birmingham also said the University of Queensland would receive $3.6 million in funding for a new ARC Training Centre for Uniquely Australian Foods, to train and skill specialised researchers in transforming Australia’s native food and agribusiness sector into a global player.

“This state-of-the-art Training Centre backed by the Coalition Government will be a vital spring board for the Australian native food industry onto the world-stage,” Sen. Birmingham said.

“These researchers will use their knowledge and expertise to help local Australian producers set-up their enterprises so they can grow and expand into international markets.

“It’s a major step forward in having Australian produced native foods such as green ants or Kakadu plums offered on the menus of top-end restaurants throughout Asia and Europe.”

The ARC Research Hub for Driving Farming Productivity and Disease Prevention, ARC Research Hub for Medicinal Agriculture and ARC Training Centre for Uniquely Australian Foods are part of the Federal Government’s ARC Industrial Transformation Research Program.

This is part of $180.4 million in new ARC funding announced recently to support 132 new research investments, led by Australian universities.

www.arc.gov.au

ends

LEADING Australian fruit producer, Piñata Farms, is among nine South East Queensland agricultural businesses collaborating with the University of Queensland’s (UQ) School of Agriculture and Food Sciences to provide industry experience to students.

Piñata Farms’ chief financial officer, Chris Jones, said four students based at UQ’s Gatton campus –Alice Freemantle, William Hudson, Glenn Denham and Yoko Lathouly – were reviewing Piñata's management reporting systems as part of the final component in their Bachelor of Agribusiness degrees. 

“A collaboration such as this fosters career pathways into agribusiness and helps us identify potential employees,” Mr Jones said. “Project outcomes also offer fresh perspectives into how we might improve as a business.

“We were keen to get some non-financial metrics in place that we can use to benchmark KPIs against.

“In this specific project, students, working as a team, were asked to review whether current management reporting systems provide timely and appropriate data and devise ideas on how to improve them. They are looking at measures such as what drives price and quality, what other agribusinesses are doing, what industry is doing and what might be useful benchmarks for Piñata as it continues to grow,” Mr Jones said.

The 13-week project began in August, with students to present their report in late October

Piñata Farms managing director Gavin Scurr and North Queensland operations manager Stephen Scurr have had a long-standing relationship with UQ’s School of Agriculture and Food Sciences. A 2016 graduate, Reannan Schultz, now works fulltime at Piñata Farms after participating in a similar project in her final year.
“Gavin and Stephen are immensely proud of what their farming business has achieved,” Mr Jones said.

“This project is a way to give back to the agribusiness sector and to support the next generation of farming professionals.”

UQ lecturer in agribusiness at the School of Agriculture and Food Sciences, Dr Phil Currey, said all students were studying for a Bachelor of Agribusiness. 

While some doing dual degrees, the Piñata Farms' project was the final assessment component of the Bachelor of Agribusiness degree, he said.
“The purpose is to enable students to put into practice what they’ve learned in the previous three years,” Dr Currey said.

“They are referred to a business, they present as consultants and are expected to use their skills to research a problem set by the client and then share their findings and recommendations.
“The objective is to create opportunities for students to be employable by applying theory in a real-world environment.”

Dr Currey said nine south-east Queensland agribusinesses, from a diverse range of sectors including dairy, beef, sugar cane and food manufacturing, were participating in the scheme which involved 33 students. 

“The course is designed so students can choose to work in areas within agriculture that are of specific interest to them," Dr Currey said. “It’s about ensuring UQ provides opportunities for students to gain genuine employment skills while enhancing our reputation as a world-leading agribusiness course provider.

“How the students perform helps UQ understand how the courses work in practice and which areas of earlier study need to be tweaked to provide better outcomes for them and the clients.

“The outcomes are the clients’ to execute. Our aim is to give clients the tools and confidence to make changes,” Dr Currey said.

www.pinatafarms.com.au

ends

THE Australian Bureau of Agricultural and Resource Economics (ABARES) has released a report on how information, communication and technology (ICT) is used in Australian agriculture.

The report also identifies the key differences in adoption between agriculture sectors and between small and large farms.

ABARES executive director, Steve Hatfield-Dodds, said the report presented findings from more than 2000 face-to-face conversations with farmers across Australia. 

Dr Hatfield-Dodds said, “About 96 percent of Australian farmers own and use ICT, and they are investing in technologies that suit their production systems.

“Examples of ICT used on farms range from computers and telephones through to things like GPS guided harvesting equipment.

“Large farms are more likely to invest in and use ICT than their smaller counterparts. For example, on large dairy farms we saw greater investment in sensors and monitoring technology, which is likely to reflect moves towards fully automated milking systems.

“Reported obstacles to adoption of ICT included skills, internet access, cost and availability of useful new technologies,” he said.

“It is evident that new equipment and the data it generates are changing how farms are managed. New ICT will be fundamental to the next wave of productivity growth in Australian agriculture.

“The use of digital agriculture in Australia has the potential to increase productivity through optimising input use, more timely decision-making, labour savings, and improved market access,” Dr Hatfield-Dodds said.

The full report is at www.agriculture.gov.au/ict-use.

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