Fonterra revises its milk price forecast upwards
Fonterra Co-op in New Zealand has increased its 2018/19 forecast farmgate milk price.

The Fonterra farmgate milk price range has increased from $6.30 to $6.60 (€3.79 to €3.97) per kgMS for the 2018/19 season. This is up from from $6.00 to $6.30 (€3.61 to €3.79). However, it has revised its forecast earnings down to between 15c and 25c per share (€0.09 to €0.15 per share).

Fonterra expects that milk volumes will be up by 2% on last year.

Chair John Monaghan says the improved milk price forecast reflects the increases in global milk prices over the last quarter.

“Since our last milk price update in December, global demand has strengthened. This is driven predominantly by stronger demand from Asia, including Greater China,” he said.

“The European Union’s (EU) intervention stocks of skim milk powder (SMP) have also now cleared for the season and, as a result, we expect demand for SMP to be strong.”

Since our last milk price update in December, global demand has strengthened

Australia’s milk production is forecast to be down 5% to 7% on last season and the EU’s growth has slowed and is now forecast to be less than 1% up on last year.

“Here in New Zealand, due to hot, dry weather since the start of the year, we’ve revised our co-op’s forecast milk collections down from 1,550m kgMS to 1,530m kgMS. This is up 2% on last year,” Monaghan said.

Demand

“We expect demand to remain stronger relative to supply for the rest of the season.”

However, Fonterra says that earnings performance in the co-op is not satisfactory and “a fundamental change in direction” is needed to deliver on its full potential.

“We are taking a close look at our business with our portfolio review, where we can win in the world, and the products and markets where we have a real competitive advantage,” Monaghan said.

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Chinese pork imports forecast to jump 40% this year
African swine fever continues to hit Chinese pig farms and domestic production is in freefall, local authorities have warned.

Chinese pork imports and prices are forecast to rise by 40% this year, according to official sources in the country.

The new China Agricultural Outlook (2019-28) published by the Ministry of Agriculture and Rural Affairs forecasts that pork imports will reach 1.7m tonnes this year and increase again to 2.1m tonnes next year, according to China Daily.

Prices will continue to rise for the next two years, fastest in the second half of this year, the forecast adds. Increased supply is expected to come mostly from the EU, North America and Brazil.

African swine fever

Increased demand for imported pork results from over 120 reported African swine fever outbreaks on Chinese pig farms, which have to over 1m pigs being culled, according to official reports.

However, sources quoted by the Hong Kong-based South China Morning Post, say actual figures could be higher.

The Chinese authorities expect domestic pork production to fall by 6.7% in 2019 to just over 50m tonnes this year, before reducing again to 46m tonnes in 2020.

However, Rabobank has forecast Chinese output to drop by 35% to 38m tonnes this year alone.

"Despite the progress made in containment, China still faces difficult challenges in eliminating the disease," China Daily reported, quoting a Ministry of Agriculture source.

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200,000ha Australian farm bought by Saudi firm
The deal to sell the farm is worth in the region of €38m.

A 200,000ha farm in Western Australia’s wheatbelt has been snapped up by the Saudi Agricultural and Livestock Investment Company (SALIC).

The farm, which was owned by grain farmer John Nicoletti, is understood to have been sold in a deal worth €38.1m.

Along with the 200,000ha, the deal also includes a 40,000-head Merino sheep flock.

The acquisition of the farm, which is held under the Baladjie Pty Ltd name, received clearance from Australia’s Foreign Investment Review Board (FIRB).

Equipment

Included in the deal are the farm's four-grain elevators, two processing plants, a potato storage facility, equipment, and land-lease agreements.

Commenting on the deal, SALIC Kingdom of Saudi Arabia CEO Matthew Jansen said: “The acquisition of Baladjie is an important step for SALIC as we continue to build our global footprint in a meaningful way.

“It is our first acquisition in Australia, as well as our first investment in sheep production.”

SALIC’s head of production agriculture investments William England said that the local team will build on the legacy of John Nicoletti, with plans to manage the livestock and grain production enterprise for the long term with a focus on sustainability, profitability, environmental responsibility and support for the local rural community.

SALIC aims to be a world-class food security-focused agribusiness investment company, making sizeable, meaningful and scalable investments while ensuring a balanced risk optimised portfolio.

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Vigilante animal activists targeting farms could face prison in Australia
The current Australian government has said that if re-elected it would introduce legislation to jail vigilante animal activists targeting farms.

Vigilante animal activists could face up to 12 months in prison for sharing personal information which allows them to target and trespass on farms, if the current Australian government is re-elected.

A joint statement from Australian attorney general Christian Porter and Australian minister for agriculture David Littleproud this week said that the government would introduce a new offence designed specifically to protect farmers and primary producers from the unlawful actions of animal activists.

Malicious

Porter said: "We have seen with Aussie farms the malicious use of personal information, including farmers' names, addresses and workplaces, designed specifically to encourage others to trespass on properties and damage businesses.

"This is not acceptable and the Morrison government will, if re-elected, introduce a new criminal offence specifically designed to protect Australian farmers from the sort of vigilante action we have seen this week.

"Penalties of up to 12 months imprisonment will apply to individuals who use a carriage service, such as the internet, to disclose personal information with the intention that another person would use that information to trespass on agricultural land. The law would also apply to other primary producers such as abattoirs,” he said.

He also said the new laws would include appropriate exemptions for bona-fide journalists and for situations where the information being released shows a law being broken, such as whistleblowing on animal cruelty.

Protection

Minister for agriculture David Littleproud said farming families deserved protection.

"I've been fighting this Aussie Farms attack map for activists for months and this is a great day," he said.

"If you use the personal information of our family farmers to incite trespass then you deserve to go to jail. Farming families grow our food and there are children on these farms.

"Now states must beef up farm trespass laws. If 100 of my mates stormed a house in Sydney we'd expect to be locked up and farmers deserve the same protection.

"The Morrison Government will always protect farmers, whilst ensuring that those who do mistreat their animals face appropriate action."

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