Grain volumes at Agfarm have tumbled by nearly one-quarter, part-owner RuralCo revealed, in the first insight into the Australian grain trader since US agricultural co-operative giant CHS bought a 50% stake.
Agfarm was, in the year to the end of last month, "unable to repeat its record prior-year performance", RuralCo, Australia's biggest farm services group, said.
Grain volumes fell 23%, a decline that RuralCo said "was consistent with wider industry experience for the 2012-13 harvest," when a run-up in prices encouraged farmers to sell straight to traders and mills rather than rely on the pool programmes and managed sales products offered by the likes of Agfarm.
"High international grain prices strongly favoured participants operating in the cash sales market, relative to providers of polling and managed sales products."
'Hot and dry seasonal conditions'
The comments represent the first on the performance of Agfarm since CHS in July revealed it had paid an undisclosed amount for a 50% stake, joining the likes of Archer Daniels Midland, Cargill and Sumitomo Corp in investing in Australian grain trading.
RuralCo has said that Agfarm appears "well placed" for the newly-started 2013-14 harvest, for which Australian wheat prices are a little lower than last year, and for which volumes are forecast well ahead of last season's 22.1m tonnes.
And the statement came as RuralCo, which in May revealed its first half-year loss in at least a decade, revealed that "hot and dry seasonal conditions" had continued to take a toll in the second-half of its financial year, from April to September.
'Markedly lower commodity prices'
"Performance was impacted by markedly lower livestock commodity prices," John Maher, the RuralCo managing director, said.
"Although we have seen some recovery in sheep and lamb indicator prices in the second half, beef prices remain under pressure due to reduced rainfall and feed levels in northern Australia and parts of eastern Australia."
A "predominance" of underweight stock "has impacted commission revenues for much of the year," Mr Maher said.
The hot weather in northern Australia and some eastern areas - last month was the hottest September on record in Queensland – has weakened farmers' appetite for building herds, although the dent to prices has been constrained by strong export demand for beef and lamb.
Australian lamb exports jumped 22% year on year last month to 17,114 tonnes slaughter weight, which shipments to China hitting a record 4,371 tonnes.
Beef exports hit 95,000 tonnes slaughter weight, also a September record.
Mr Maher said that, "pleasingly", its rural supplies business "returned a solid second half performance", after being hit in the first half of the financial year by a drop in agrichemical sales, a decline blamed on hot and dry conditions.
Overall, the group perform "credibly in terms of activity volumes and cost management", he added.
Nonetheless, RuralCo was on track to reveal earnings for the year to the end of September down 50-55% on last year's Aus$15.6m result.
Earnings before interest, taxation, depreciation and amortisation (ebitda) will fall some 30-35%, implying a figure of Aus$29.1m-31.4m.
The guidance was below market expectations of Aus$37.1m in ebitda and Aus$11.6m in earnings.
The statement followed the close of Sydney markets on Monday, when RuralCo shares closed down 1.1% at Aus$3.49m.