Property Profile: Kerarbury

Kerarbury is a Rural Funds Group (ASX: RFF) owned almond orchard located at Darlington Point, New South Wales. Kerarbury was purchased in 2015 and is one of three RFF owned almond orchards in the Riverina region of southern NSW.

Kerarbury is RFF’s largest almond orchard and represents over 4% of Australia’s total planted almond orchard area.

Lease

In 2016, Kerarbury was leased to Olam Orchards Australia Pty Ltd for 22 years. Olam Orchards Australia Pty Ltd is a subsidiary of the Singapore-based Olam Orchards International (SGX: O32), the world’s second-largest almond grower with market capitalisation of just under $5b.

Development

RFM’s expertise in asset development focuses on acquiring properties with the potential for productivity gains or conversion to higher and better use. Both strategies aim to enhance the value and income-earning potential of assets. The development of lower value assets to an almond orchard is an example of converting land to higher and better use.

At purchase, Kerarbury was an irrigated cropping property, primarily growing cotton and grains. From 2016 to 2020, RFM developed a total planted area of approximately 2,530 ha. The development works included extensive land preparation including laser levelling, ripping, amelioration, and mounding, in addition to the installation of irrigation infrastructure, water storages, and pumping stations.

Water and irrigation

RFF owns 28,141 ML water entitlements which are provided to Olam as part of the Kerarbury lease. In addition, RFF owns Coleambally Irrigation Co-operative Limited (CICL) delivery entitlements that secures Kerarbury’s access to additional water flow in CICL.

RFM has made continuing improvements to irrigation systems to support the needs of the individual almond varietals planted. The current irrigation system in place is an 'ABC' system, which allows for the different varieties to be individually watered and managed.

The automation of the watering system improves the efficiency of water and fertiliser usage, as the application of these inputs can be controlled to specific sections of the orchard with a high degree of accuracy. The watering system can also be programmed to avoid peak energy cost periods.

Climate and soils

Almond production requires winter chill, and hot, preferably dry, harvest weather from late January to April. In Australia, almonds are produced in regions stretching westward from the Riverina to Sunraysia, Riverland, Northern Adelaide Plains, and the Swan region in Western Australia. These areas offer a mediterranean style climate, which is ideal for almonds and helps minimize disease pressure. Additionally, the availability of irrigation water is essential for successful almond cultivation in these regions.

Kerarbury is generally characterised by red-brown sandy clay loam soil with well-structured topsoil. These soils are typically well-drained and have infiltration rates that support efficient irrigation methods, ideal for irrigated production of horticultural crops such as almonds.

Pollination

Almonds and many other tree nut crops will only develop when a flower is correctly pollinated. Traditional almond varieties are not self-pollinating, therefore they require pollinator varieties to be planted alongside the main almond variety sought to be produced. A good mix of pollinator and main varieties is essential for good production and nut quality. Pollination can be disrupted by adverse weather or by poor flowering. Therefore, orchards in Australia often plant more than one pollinator variety to ensure the main varieties flowering period is adequately supported.

Bees are brought-into the orchard each year to assist with pollination. Because almonds are not wind-pollinated, bees are needed to carry the pollen from flower to flower. Under favourable conditions a bee will make from six to eight trips a day in search of nectar — more where pollen is being collected. On each occasion the bee may visit 400 or more flowers.

Each hectare of the orchard requires approximately 4.5 hives for ideal pollination. The introduction of these hives is a mutually beneficial arrangement between the beekeepers and the orchard operators as the pollen in almond blossoms is an excellent source of nutrition for bees, whilst the bees provide a vital pollination service for the trees within the orchard.

Harvest

Almond harvest generally runs from February to April, depending on weather conditions. Almond trees bear fruit in their third year after planting, with full yields expected by the seventh year. Multiple varieties are planted in alternating rows to assist with cross-pollination, and to stagger the harvest as the different varieties mature at different times.

Mechanical harvesting equipment is used at Kerarbury. This equipment requires the orchard floors be cleared and swept of large weeds and other material. Once the orchard floor is prepared, tree shakers vibrate the tree trunks, so that the fruit falls to the ground where it is left to dry for up to 10 days. Mechanical sweepers then sweep the fallen fruit into rows between the trees, and pickup machines collect the rows of almonds and feed them into collection bins. The almonds are then transported to large stockpiles, ready for truck collection and transport to almond processors.