A Chinese investment company has bought two of the Northern Territory’s biggest watermelon farms for $27.5 million, in what is one of the most significant horticultural deals in the NT’s history.
The Hong Kong-based CK Hutchinson Holdings bought Stuart and Kane Younghusband’s melon farms near Mataranka, which cover a combined area of about 1,900 hectares.
The new owners have signed a 10-year lease with the New South Wales-based Rombola Family Farms, which was this year found to have sold rockmelons contaminated with listeria, which led to a miscarriage and the deaths of seven people.
ABC Rural understands the Foreign Investment Review Board gave its approval for the sale to go ahead, which settled shortly before Treasurer Josh Frydenberg blocked one of CK Holding’s subsidiaries, CK Investment, from buying the majority of Australia’s gas transmission pipeline.
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The two Mataranka farms, which were run as separate businesses, produced about 25,000 tonnes of watermelons every year, which is more than half of the NT’s 46,000-tonne yearly melon production.
The deal also included groundwater extraction licences totalling 10,148 megalitres per year.
Agricultural consultant Ian Baker said the sale of the two properties was one of the biggest horticultural deals he had seen in northern Australia.
“In the [Northern Territory] horticultural industry, farms have been selling between $5 [million] and $10 million, so this is a big sale,” Mr Baker said.
“It is a big sale in Australian terms. There are not many horticulture businesses [across Australia] that sell for this sort of money.”
The Mataranka melon farms are among the largest in the Northern Territory.
ABC Rural: Daniel Fitzgerald
Manager ‘more important than investor’
Mr Baker said the fact that investment in the properties had come from overseas was less important than the ability of the new managers to handle the challenges of farming in the north.
“I have never been worried about money coming from overseas. The critical thing is having managers who are able to learn and develop the business,” he said.
“Sometimes a big farmer from down south struggles to learn really well because he’s done it really well down there and struggles to make the transition.
“Management of the operation is going to be the critical thing, less so than where the money comes from.”
ABC Rural has spoken to several melon farmers who have questioned what the sale could mean for melon prices should the new managers, with their significant financial backing, choose to expand production.
Mr Baker said any lift in melon plantings by the new managers would likely impact prices.
“[The NT] puts out about 50,000 tonnes of melons roughly, and the market is not endless. There’s probably limited export opportunities, and the price is very sensitive to over-production,” he said.
“They are going to have to be careful about how much they ramp [production] up — there is plenty of land and water to do it — but I think any manager who knows the Australian market would be silly to over-produce and depress prices.”
Rombola Family Farms has been contacted for comment.
Kane Younghusband and his brother Stuart pioneered melon growing in Mataranka.
ABC Rural: Daniel Fitzgerald
From little things, big things grow
Kane and Stuart Younghusband developed their farms from uncleared blocks in the early 2000s, in one of the first horticultural developments in the Mataranka region.
Mr Baker said the sale of the farms was a testament to the success of the Younghusbands’ ability to start small and learn on the job.
“These two young boys came up from Gilgandra [New South Wales], they didn’t know much about the Territory, didn’t know much about watermelons, they didn’t have a lot of backing behind them,” he said.
“Where they ended up with these properties shows you that success is possible, and they demonstrated a way to get there.
“All we hear about is the big grandiose schemes, but they have a history of failing, whereas the story of people like Kane and Stuart, that’s really the way agriculture developed in southern Australia and that’s probably the way it needs to develop here.
“Start small and grow big.”