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AAC - AUSTRALIAN AGRICULTURAL COMPANY LIMITED.


The_Muns

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Speaking as an Australian beef cattle farmer, Muns, I would point out that the beef industry as a whole tends to suffer from such incidents as the recent BSE outbreak in the US. The reason is that the Japanese and Koreans, our principal beef export market, simply reduce their overall consumption of beef as a result.

 

That isn't to say that there won't be benefits to the Australian beef industry since exports will re-adjust to make up for the US shortfall. But-- alas, the meat industry export "pipeline" is not able to absorb rapid change mainly because contracts have long lead times and cattle feedlots take many months to produce export product.

 

By that time the crisis may have passed. On the other hand, beef futures trading may be interesting in coming weeks.

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AAC is the only well-known beef stock I know of ... http://www.asxboard.com/html/emoticons/unsure.gif

 

Are there any other rural stocks which have big cattle operations?

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AAC is indeed the play for this one. I got in Wednesday at 1.17 ( was busy earlier). This could have HUGE fallout. Japan still hasn't lifted the Canadian ban based on 1 cow being found with BSE.

 

There is another possibility of a left field play most wouldn't know about, or understand. I'm working on that one & will advise if it proves up.

 

cheers,

 

ned.

 

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The Sultan Brunei owns ALOT of Australia cattle (in fact he owns the largest cattle station in Australia...Wileroo Ranch)

 

Muns I'd be more looking at BSE researchers (a number are working on a solution)

 

 

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Thanks Guy's and Girls,

 

Will be looking into this further.

 

Good report in the Weekend Australian. See below.

 

QUOTE

Beef stakes low on mad cow market
By Vanda Carson
December 27, 2003
Australian beef exporters would have difficulty capitalising on the mad cow-inflicted misfortune of their US counterparts because the worst drought in a century had dramatically reduced valuable breeding stocks, industry experts said yesterday.

Australian Agricultural Company spokesman Ross Aird said there were not enough surplus cattle which could be sold to Asia to fulfil the huge demand created by the ban on US imports, following the suspected mad cow case in Washington state.

"It makes it tough to take advantage on an increase in prices in Asia," he said.

Japan, the biggest importer of US beef, and South Korea have suspended imports of US beef pending confirmation of the country's first case of mad cow disease.

The ban has created a vacuum of 148,900 tonnes of beef to Japan and just under 100,000 tonnes to Korea - assuming the bans are in place for six months.

Beef industry body spokesman Peter Barnard said Australia could not fill all of this supply hole because it does not have the capacity to sell the specialty cuts required by the Korean market.

AACo, Australia's largest beef producer, currently exports 25 per cent of its production to Japan, but was looking to exploit the market opportunity, Mr Aird said.

Its shares climbed 14c to $1.23 on Wednesday because the company has looked after its breeding herd during the drought and is able to continue producing cattle.

Less fortunate beef producers had lost valuable heifers during the dry spell and it would take longer for them to recover.

Mr Barnard, from Meat and Livestock Australia, said the Australian herd was down two million on its pre-drought size and, as a result, next year's production was expected to fall 6-7 per cent from 2003 levels.

Mr Aird said it was too early to predict how the Australian market would be affected, but the longer the bans, the more opportunities for Australian producers.

It could result in lower prices in the US and higher prices in Japan and Korea due to shortages. Mr Barnard argued the net result of the bans would be neutral.

 

 

 

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AAC is indeed the play for this one. I got in Wednesday at 1.17 ( was busy earlier). This could have HUGE fallout. Japan still hasn't lifted the Canadian ban based on 1 cow being found with BSE.

 

Bit strange that AAC talking it down ? I've seen a previous report (a few months back), that stated they had indeed weathered the drought very well & were stocked up to take advantage of the rising prices.

There is also a huge stock of frozen beef in the freezers all around Australia. The extra few million head killed due to the drought are now in cold storage.

 

Something a bit weird here. At the time, I thought the industry was being cute, talking beef prices up, then dribbling the huge extra stock out. With the huge over stock from the drought, beef prices should have fallen quite a bit. Looks to me like profiteering. Now they have the chance to really cash in.

 

This may indeed be the case, with AAC, sending a further scare into the Japanese/Korean buyers, saying we don't have enough. So they will scramble to grab whatever is available and pay the price.

 

I have some contacts in this industry & will work on finding out what the real situation is.

 

cheers,

 

ned.

 

PS

There is another possibility of a left field play most wouldn't know about, or understand. I'm working on that one & will advise if it proves up.

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  • 2 weeks later...

IN REPLY TO A POST BY redned71, Sunday 28/12/03 11:25am   [READ POST]

AAC is indeed the play for this one. I got in Wednesday at 1.17 ( was busy earlier). This could have HUGE fallout. Japan still hasn't lifted the Canadian ban based on 1 cow being found with BSE.

Bit strange that AAC talking it down ? I've seen a previous report (a few months back), that stated they had indeed weathered the drought very well & were stocked up to take advantage of the rising prices.
There is also a huge stock of frozen beef in the freezers all around Australia. The extra few million head killed due to the drought are now in cold storage.

Something a bit weird here. At the time, I thought the industry was being cute, talking beef prices up, then dribbling the huge extra stock out. With the huge over stock from the drought, beef prices should have fallen quite a bit. Looks to me like profiteering. Now they have the chance to really cash in.

This may indeed be the case, with AAC, sending a further scare into the Japanese/Korean buyers, saying we don't have enough. So they will scramble to grab whatever is available and pay the price.

I have some contacts in this industry & will work on finding out what the real situation is.

cheers,

ned.

PS
There is another possibility of a left field play most wouldn't know about, or understand. I'm working on that one & will advise if it proves up.

SMH today AACo buys 58,000 head and station for $50m

 

http://www.smh.com.au/articles/2004/01/05/1073267965845.html

 

Also I have created a AAC topic and merged this "MAD COW Disease" topic into it (it seems to be all related to AAC)

 

Cheers

Matt

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IN REPLY TO A POST BY redned71, Sunday 28/12/03 10:25am   [READ POST]

AAC is indeed the play for this one. I got in Wednesday at 1.17 ( was busy earlier). This could have HUGE fallout. Japan still hasn't lifted the Canadian ban based on 1 cow being found with BSE.

Bit strange that AAC talking it down ? I've seen a previous report (a few months back), that stated they had indeed weathered the drought very well & were stocked up to take advantage of the rising prices.
There is also a huge stock of frozen beef in the freezers all around Australia. The extra few million head killed due to the drought are now in cold storage.

Something a bit weird here. At the time, I thought the industry was being cute, talking beef prices up, then dribbling the huge extra stock out. With the huge over stock from the drought, beef prices should have fallen quite a bit. Looks to me like profiteering. Now they have the chance to really cash in.

This may indeed be the case, with AAC, sending a further scare into the Japanese/Korean buyers, saying we don't have enough. So they will scramble to grab whatever is available and pay the price.

I have some contacts in this industry & will work on finding out what the real situation is.

cheers,

ned.

PS
There is another possibility of a left field play most wouldn't know about, or understand. I'm working on that one & will advise if it proves up.

Ned, if you can work out the real situation in this industry please let me know, I have had some involvment for 50 years and can assure this is one industry full of left fields, the producers never know what the middle men are doing, and the middle men make sure the end users are never in the know. This all sounds very negative and I dont mean to be, AAc is a wonderfull old company with great spread of properties and a wonderfull herd of cattle, I have reason to believe the management is on the ball but as I said earlier so many left fields! When you see such well run outfits as WHSP showing an interest in this industry you cant help think there maybe some upside, Regards Boulia

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I've been a happy holder since late 02 @ av of .86c. This Co is worthy of a an asxboard listing with currant USA Mad Cow scare. I'm not a seller at present. C > b. http://www.asxboard.com/html/emoticons/hypocrite.gif
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