Just returned from my annual trip to mildura. These are my observations;
1. Mro has implemented a radical pruning methodology, one I have never seen before. They have essentially stripped all the buds on the fruiting cane from bud 1 to bud 5. This essentially will mean no fruit will grow in the cordon area. Even though it will be an easier harvest, it has reduced the crop by at least 30%, Given there wasn't that much fruit there anyway this is a big call. I have been in dried fruit one way or another for 30 years, have never seen this done. My estimate on the crop is substantially lower then last year.
2. The conditions of the farms are deteriorating very quickly, broken wires, broken strainers, big banks of weeds, vines that are leaning over, vines that have been under watered, an irrigation system that hasn't had maintenance for years, signs of disease in most farms.
3. One side of the factory has been shut off from any workers. Essentially mothballing one side, saying that I noticed the temporary fencing still lines the border of the factory which I installed at construction phase - 4 years ago. Love to know what the rental has been on that. The general appearance of all asset is extremely bad. I am sure no Coles/Woolworth or offshore buyer would approve that site.
4.Fifth street was sold at a bargain price, whatever Val says, she has sold two very profitable assets, 5th Street and the Citrus at Colignon. Both non core she says but when you only grow 600 ton of dried fruit, I am not sure what is core.
5. Advinco, which I believe MRO had the offtake for has been hit by hail, my understand is that 1000 acres of fruit has been lost. Saying that I understand it was questionable if scalzo would ever deliver any fruit anyhow. I don't know how the MRO farms close by got on, but assume any damage would need to be announced as it should be market sensitive.
6. News at the gol gol pub is that they have sold the Gol Gol property as well, again no announcement., I assume Val will call that non core as it has 80 acres of citrus on it.
7. I didn't see the Yatpool property but I was told that it mostly dead, and lucky if was 150 acres alive with a very light crop.
8. The rate that dried fruit properties being sold to Fresh fruit property developers has increased substantially. Meaning less 3rd party fruit available. Mro's 3rd party fruit has dropped by 70% over the past 3 years.
Thats all I have, enjoy the information.
MRG Price at posting:
1.0¢ Sentiment: Sell Disclosure: Not Held
