True enough but looking at CAE, isn't it really an announcement about a number of 50/50 propositions, where (all the way down the chain), there is one more or other JVs involved, even downd to the CDI split of 80/20 (with EAT).
The suggested farming intensity however is way more dense than anything that AHF is proposing, the difference here being between sustainable farming (AHF) including the eventual in-sourcing of the primary cost influencers (think feedstock and the role that Ignatious is now starting to play).
In contrats however, it seems that AHF is aiming for an optimal milking average of 8,000/L as against mcDonald's 18,421/L based on 6 properties, or 18,000 hectares in total size, with 38,000 cows milking at any time (ie: a minimum of 2.1 milking cows per hectare compared to AHF's 1.6 ratio).
At 31/12/15, AHF's herd size was 2,657 herd size (since increased by >250 due to the guaranteed in-calf stock acquisitions that were due during January, going into February) + other natural increases /movements (less: any stock sales in the interim). That is, a current herd ratio of 1.6 per hectare (31/12/15) through to 1.7 (current, asusming the January valcing).
Post Heywood, the herd size was expected to be 2570 spread over 1675 hectares. It zis now >2657.
Target milk production was also expected to be 17.75m/L - 19.585m/L or 6,900/L - 7,630/L per cow based on a 2570 herd size, measured against a 7500L upper average for Heywood (alone) vs a 7700+L upper average across the existing Brucknell farms (estimated at 7/8/15).
With the most recent investor releases however it seems that the upper milk average has now shifted to ~7800L (upper), vs ~7100L (lower). With this in mind, this puts the C16 milking range at between 18.86m/L (lower) and 20.7m/L (upper), based on the 31/12/15 herd size. This also puts the C16 milk solids range at between 1.4MKg - 1.533MKg.
That's using the AHF information from 7/8/15 and the H16 report (re: herd size).
As suggested in several other recent pzosts, no matter which way you look at it, AHF's C16 milk production (alone) will exceed 20m/L (way ahead of schedule.
Refer: 17239826
Including the observation:
"With CCF, they have stated (ASXR 8/1/16) that "Targeted production expansion under “System 5” to 2,500 milking cows for 25 million litres of milk per annum" is their near term plan. AHF is already at that number and beyond. Going forward, CCF is targeting average production of 10,000/l per cow. AHF is targeting ~7,800. On another thread, I've already concluded that AHF's F17 milk production will already exceed 20mL (well ahead of time). But, if they were to achieve CCF's optimistically stated levels, then based on a 2657 herd size at 31/12/15, then AHF could well be targeting 26.6mL of milk production during F17, or even closer to 30mL given the rapidly growing herd size. Either way, AHF's herd size, commitment and forecasting levels are already in place, producing and securing results even if their forecasts remain upwards of 25-30% conservative of their actual standing (ignoring even the CCF forecasted suggestions)."
Also refer: 17239452
Including the observation:
"Examples of this can be found by reference to the recent investor presentation. In that presentation, the herd size was put at 1600 for F16 and 2100 for F17 (assuming no more farm purchases). F16 production estimates were put at 12.5m/l and F17, at 16.5m/l. That is, at an average of 7,812/l (F16) and 7857/l (F17). Estimated solids production for F16 however is suggested at 912,500 kgMS whilst for F17 it is estimated at 1,204,500 kgMS. A ratio of 13.69 litres to kgMS was used throughout the presentation. Taking this down a tad however to 7500/l on a 31/12/15 herd size of 2,657, translates to a 19.92m/l production capacity through F17 (or 1,455,077 kgMS). Keeping this to the indicative F17 average of 7857/l however points to a potential yield of 21m/l during F17 (all things being equal), or 1,533,966 kgMS. Again however at slide 8, they have used a constant kgMS indicative pricing of $6.00. Translated, whilst slide 8 suggests that $7.23M in gross revenue can be generated in F17 based solely on AHF’s kgMS indicative pricing, this increases rapidly to between $8.73M - $9.21M using the 31/12/15 actual herd size numbers."
So, as Amused has sugegsted:
"AHF just needs to stay focused on CDC and farm aggregation for now and the short term (12 months)."
In the process of doing so however, AHF's potential upsides including through:
* in-sourcing of its costs (feedstock etc);
* further increasing its milking yields /farm efficiency towards an 8,000/L average, or even higher,
* improving on its acreage utilistaion ratio. and
* ongoing careful farm /hub selection, etc,
could well be catalysts for the SP quite independently of the CDC acquisition, especially if in doing so, AHF can start progressing towards a 30m/L annualised production level heading towards 2017 (2.222MKg in milk solids production).
AHF Price at posting:
23.0¢ Sentiment: Buy Disclosure: Held
