Update from previous landlord:Advinco Farm:
Following cancellation of the lease with Murray River Organics in mid-December last year we established a strong operational team, renamed the property to “Advinco Farm ” and are now well into harvesting the 2020 crop of Sultanas and Sun-Muscat dried vine fruit.
Recent rains have delayed the current harvest by a couple of weeks but has also assisted in a welcome reduction to the price of water, one of the major operating expenses of this property. Thankfully, the price of water has fallen from $930 per megalitre in mid- December 2019 to around $480 per megalitre today.
As long as water remains below $600 per megalitre, we believe that this property with industry benchmark yields will produce an excellent return for the operating entity. This property is the largest dried fruit property in the Sunraysia region and its fruit will always be in high demand.
While the current crop will be modest due to poor operational management of the property over the last couple of years, considerable rectification work is being undertaken by our Advinco Farm staff to return the property to its previous benchmark yields.
We are anticipating an operating loss from this year’s crop and as a consequence we have written off costs of $2.8 million at 31 March 2020, which are primarily the cost of water used on the property and vine rectification expenses incurred up to that date.
We have dropped all organic production in favour ofconventional dried fruit practices and our decision making is currently focusedon maximising fruit yield and farm profitability in FY2021 and FY2022.
We have commenced our search to find a suitable tenant for this property and it remains our intention to re-lease this property within the next 2 – 3 years.
I suppose MRG couldn't have dropepd the organic production, but interesting to see new owner thinks that's the best option at this time.
If Arrow can manage water cost and find a good tenant, this works out very well for them.
