Sunday, December 11, 2016
Gina Rinehart wins battle Rinehart wins battle for Kidman empire
Australia’s richest woman, Gina Rinehart has emerged victorious in the take-over battle for the Kidman and Co land and cattle empire.
Treasurer Scott Morrison has approved a bid by Outback Beef to purchase the Kidman group. Outback Beef is 67% owned by Rinehart’s Hancock Beef, and 33% by a Chinese company, Shanghai CRED.
Founded in 1886 by the legendary Sidney Kidman, the Kidman group is Australia’s largest private landholder. It controls 100,000 square kilometres of pastoral leases-about 1.3% of Australia’s total land area and 2.5% of the country’s agricultural land. Kidman has 185,000 head of cattle in Western Australia, the “Top End” and South Australia.
Morrison rejected a bid by a Chinese group on national security grounds, while Gina Rinehart’s $386.5 million bid put an end to the hopes of another consortium made up of four of Australia’s wealthiest farming families to win control of Kidman.
The combination of Kidman’s operations with her other operations will make Rinehart’s company one of the top three beef producers in Australia with a combined herd of about 300,000 cattle.
Gina Rinehart had already been busy buying other cattle properties as well as Kidman. In July she purchased two properties in the Northern Territory totalling 550,000 hectares to add to her properties in WA, QLD and NSW.
Shanghai CRED has been busy itself in its own right, recently buying four stations in WA’s Goldfields region , on top of other stations purchased in the Goldfields region and the Kimberley region of WA.
Another mining magnate getting into cattle farming in a big way is Andrew Forrest of Fortescue Mining. Since 2009, he has been buying cattle properties in Western Australia, making a total of 10,000 square kilometres. He also owns meat processor Harvey Beef, which is Western Australia’s biggest beef exporter.
It appears that Rinehart and Forrest are seeking to hedge their bets against any downturns in their mining operations by moving into cattle farming.
Multi-billion dollar takeover has farmers worried
Australian farmers have expressed concern at a proposed $US66 billion takeover of the US crop seeds giant Monsanto by the German chemical giant Bayer. The merger will give the new company control over about a quarter of the world’s seed and pesticide supplies.
Monsanto is the world’s largest supplier of genetically modified seeds and also produces the weed-killing herbicide Roundup. Monsanto’s sales totalled $US15 billion last year, while Bayer’s sales were $69.7 billion.
In the last 12 months other major agribusiness companies have announced mergers, with Dow Chemical and DuPont merging and China’s ChemChina moving to buy the Swiss agrochemical and seed company Syngenta.
Farmers are worried that these mergers and take-overs in the agribusiness area will lead to reduced competition, price gouging and less innovation and research.
Victorian dairy farmers making negative incomes
Cuts to the price of milk and poor seasonal conditions have led to Victorian milk farmers experiencing negative incomes in 2015-16. On average, net farm income fell from $135,000 in 2014-15 to minus $41,000 in 2015-16.
In South western Victoria average net farm income fell from $149,000 in 2014-15 to minus $71,000 in 2015-16. Other regions fared worse. In northern Victoria average net farm income fell from $142,000 to minus $36,000. In Gippsland, average farm income fell from $114,000 to minus $16,000.
Dairy farmers were hit with drought conditions and higher prices for fodder and water on top of the price cuts announced by Murray Goulburn and other milk processors.