Troubled South Australian dairy processor, Beston Global Food Company, has suspended share trading on the Australian Securities Exchange until the end of this week pending the release of details on its milk supply arrangements for 2024-25.
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The company, which has previously reported debt liabilities of about $70 million, will also release business funding details before share trading resumes.
Beston, founded and listed on the ASX in 2015, has seen its share price sink from an early high around 50 cents in 2016 to less than 1c since January.
A downturn in dairy product values last financial year, coinciding with high milk prices and its biggest ever milk receivals recently left the company struggling to pay its farmer suppliers in full instalments.
Monthly payments were split into two or three portions.
Dairy farmers are keen to find out what the company's future will hold, particularly because as it is valued as a key competitor in the southern Australian market.
Last year Beston bought about 165m litres of SA's 500m litre milk output for its cheese and lactoferrin plants at Murray Bridge and Jervois.
While some suppliers were tempted to switch to other processors when new season milk prices were released in June, Beston's quotes in the $7.80 a kilogram to $8.10/kg (milk solids) range were within the ballpark for processor offers for 2024-25 - about 15 per cent below last season.
Industry observers estimated up to two thirds of its supplier base would still be on two- or three-year contracts locked in at last year's higher payment rates.
"Beston's place in the market has been integral to the higher milk prices farmers have received in the past couple of years," said SA Dairyfarmers Association president Rob Brokenshire.
"We certainly don't want to lose them as a competitor in the market.
"They have quite a lot of suppliers and make good products, but it's been a tight year for them as the global commodity prices fell."
Lower international dairy prices had also triggered an increase in cheap US and New Zealand dairy imports competing with local lines in Australia.
For the first half of 2023-24 Beston Global Foods reported a net loss of almost $19m, with revenue down 4.2pc to $81.
Milk receivals of 89m litres of milk were up 8.6pc on the same period last year, including its highest milk intake on record in the December quarter due to favourable weather conditions for South East SA dairy farms.
Beston has been trying to sell its northern Victorian meat products packing business the Provincial Food Group for the past year.
The PFG division, at Shepparton manufactures food products for export and domestic requirements in the retail and foodservice markets.
Meanwhile, after losing two board directors at the end of last financial year, Beston has just appointed finance and banking specialist, Ian Campbell, as a new director to fill one of the three vacancies on its six seat board.
Mr Campbell's previous roles include business banking head at Bank of New Zealand, managing director of online home lender, Eloan, and chairman of the Morialta Charitable Trust.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
