FARM investor and operator PrimeAg has forecast a second-half operating profit of between $6 million to $10 million, driven primarily by cotton production.
But executive chairman Peter Corish conceded that earnings since listing in December 2007 had been "well below long-term expectations" due to below average rainfall and reduced irrigation allocations, according to The Australian Financial Review.
PrimeAg reduced its winter wheat crop following weaker grain prices to plant higher value summer crops, including cotton, leading to a $4.4 million loss in the first half of 2010.
Mr Corish said dry seasonal conditions and lower grain prices significantly reduced revenue. "The dry season is estimated to have reduced grain production by 12,000 tonnes or 30 per cent," Mr Corish said.
"Wheat prices fell a further $100 per tonne or 30 per cent during planting and harvest. The combined effect of lower yield and price reduced revenue by $5.3 million against budget."
Email a friend