About two weeks ago, FAO released their biannual food outlook....

About two weeks ago, FAO released their biannual food outlook. Very interesting read. While the news is filled with food security issues related to Ukraine-Russia, the reality is, across most commodities production is up and demand=supply. That includes wheat. Where we are seeing *structural* shortages includes coarse grains: think maize, oats, etc which are used for livestock feed as well. No surprises, that is good for the feed providers like Ridleys, but it's also bullish for low-cost protein producers with export markets. For example, Australian Agricultural Company has been benefiting from high beef prices, while their cost of production is very low as it's free range with grains only used in the feedlots.

And this brings me to fish. FAO's report is extremely bullish on fisheries in general. They note booming sales as demand is revived post-Covid, but also it's a relatively more cost-efficient protein source than beef. They note that demand is outstripping supply pretty much across the board. The supply constraints are being felt because of high oil prices reduces the viability of ocean trawling - there was an article on the ABC last week about prawns in Australia with prawn trawlers reluctant to go out, while prawn farmers are doing better. They note ocean stocking issues - again this is a headwind for wild caught, and a tailwind for aquaculture - last year was the first time in Australia's history where farming was worth more than ocean caught fisheries. They are expecting volumes to drop by 1.9% and value to increase by 2.8% - that's exactly what we want to see.

Here is a low res(sorry) version of the fisheries summary:


And let's just zoom in on that chart, you can see the long term trend in fish prices:


You can find the FAO report here:
https://www.fao.org/3/cb9427en/cb9427en.pdf

And the ABC report on prawns:
https://www.abc.net.au/news/2022-06-17/prawn-season-suffers-from-high-fuel-prices/101160430

And finally, if the FinTwit interest in aquaculture is anything to go buy, my guess is the tide has turned (pun intended). Every day people are DM'ing me about aquaculture and specific companies. Mind you, mostly about Murray Cod Australia, Seafarms, and Clean Seas - not sure why people want to try and pick turnarounds rather than the proven. GLTAH.