Impact of Severe Flooding on Australian Agricultural Co’s Operations

Severe Weather Conditions Affect Operations

The Australian Agricultural Co (AA Co) has updated its investors regarding the significant impact of heavy rainfall and flooding across north-western Queensland since late December. Three of the company’s northern breeding and growing stations—Dalgonally, Carrum, and Canobie—have experienced disruptions due to the recent weather events.

Current Situation and Immediate Focus

As AA Co continues to navigate this evolving situation, the company has declared that their primary concern remains the safety of their personnel and the welfare of their cattle. With about 450,000 cattle across their operations, approximately 55,000 head are on the Gulf properties directly affected by this flooding, a notably smaller herd than seen during the devastating floods of 2019.

In a statement, AA Co expressed, “The full effects of the flood are yet to be determined and are being managed in real-time.” The company is taking all necessary steps to mitigate impacts on their people, cattle, land, and operations.

Historical Context

In May 2019, AA Co faced severe livestock losses estimated to be around 43,000 cattle across several properties, resulting in losses valued at approximately $47 million. The company cautioned against directly comparing the current flooding situation with that of 2019, noting significant differences in cattle valuations, operating practices, and weather conditions.

Financial Outlook and Market Reactions

The company’s recent update has seen its shares fall by 2.1% to $1.42. Despite the adversities, AA Co has confirmed they can meet supply obligations to key markets. However, it was noted that they do not hold insurance for flooding, which poses significant risks.

The overall financial impact for the March 2026 fiscal year remains uncertain but is expected to be material. AA Co management will provide updates as assessments continue.

Visual Insights from Satellite Imagery

Satellite Data Reflects Extent of Flood Damage

Recent satellite maps from Cibo Labs show the extent of the flooding, illustrating affected areas that rival those inundated in 2019. The preliminary graphics depict flooding spreading up to 70 kilometers wide in certain regions.

Source: Cibo Labs. Click twice on images for a larger view.

Continuing Challenges for Local Producers

As of the morning of January 6, local producers reported an estimated 20,580 head of livestock missing or deceased due to flooding. Preliminary assessments highlighted severe infrastructure damage, including the destruction of approximately 980 kilometers of fencing.

Agribusiness banker Rabobank has announced support measures tailored for livestock clients affected by the recent flooding. According to Rabobank’s deputy regional manager for North Queensland, Joe Webb, this includes various forms of assistance aimed at helping impacted operations recover and sustain themselves.

Support Measures Available

• Carry-on finance to keep essential operations running
• Waiver of break costs on early withdrawal from Farm Management Deposits
• Deferral of scheduled loan payments
• Waiver of fees on necessary loan increases for rebuilding

The situation remains fluid, and stakeholders at all levels are closely monitoring developments as the rainfall eventually recedes.