RFM Almond Fund 2006
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AF06 frost event, Spring 2011 | |
Fund Overview |
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Fund Assets |
Frost Event, Spring 2011
In late September, an unseasonal cold snap resulted in a frost event that affected a small section of the AF06 almond orchard area on the Mooral property near Hillston, NSW.
RFM has undertaken a preliminary sample audit to assess the extent of the damage to the AF06 almond orchard area. To demonstrate the impact this event may have on final harvest, a comparison of budgeted yield to forecast yield incorporating the frost impact is shown below:
| Scheme | 2012 Budget t/ha | Forecast t/ha | t/ha Variance | % Variance |
| AF06 | 2.29 | 2.21 | -0.08 | -3% |
Given the relatively small area impacted by the frost, RFM believes this damage will have an immaterial impact on final revenue. However, the impact on final revenue cannot be quantified with certainty until the orchard has been harvested in 2012 and the almond price for the 2012 harvest is known. Assuming the price received is the same as the 2011 harvest ($4.70/kg), forecast changes to revenue are shown below:
| Scheme | 2012 Budget Revenue | Forecast Revenue | Revenue Variance | % Variance |
| AF06 | $2,925,280 | $2,825,561 | -$99,719 | -3% |
In the AF06 orchard, farm managers use sprinkler systems to warm the orchard floor to discourage frosts. This is a cost effective way to minimise frost damage to the almond crop.
Should you require any further information please contact Adviser Services on 1300 880 295 or email adviserservices@ruralfunds.com.au.
Fund Overview
The aim of the RFM Almond Fund 2006 (AF06) is to provide investors (“Growers”) with the opportunity to operate an almond growing business capable of generating competitive risk-adjusted returns. The business attracts tax deductions supported by ATO Product Rulings PR 2006/24 and PR 2006/25.
AF06 Growers participate in the business of growing and selling almonds for the world market. Each Grower is licensed to occupy and farm one or more Groves each consisting of an area of 0.25 hectares (ha). Each Grove is planted with approximately 70 almond trees and has sufficient water entitlements delivered via a modern irrigation system to cultivate and farm the trees. Grower returns are dependent upon the performance of their almond growing business. Returns are generated from the almond sale proceeds, less the annual operating and management costs including the lease of land and operational infrastructure. The AF06 terminates on 30 June 2026 with no further obligations to the Growers.
As Responsible Entity, RFM is responsible for orchard operations, maintenance, harvesting, pre-processing and delivery. RFM also manages all accounting and administrative functions of the AF06.
The AF06 is closed to new investment.
The Price Management Plan
In order to reduce price volatility, RFM developed a Price Management Plan ("PMP") to provide price support for Growers for up to the first ten years of AF06 or until a cap of $4,125 per Grove has been reached. RFM will pay the Growers up to $3.50 per kilogram on top of the sale price, if the sale price received is less than $8.20 per kilogram.
Any payment to the Growers as result of the PMP will be made after the final price per kilogram for the harvest is determined by Almondco.
Yield
The yield for the 2010 harvest is 1.116 tonnes per hectare or 279 kilograms per Grove. The price achieved was $4.84 per kg. The forecasted yield for the 2011 harvest is 1.4 tonnes of kernel per hectare.
Modern mature almond orchards using industry best practice consistently achieve 3.5 tonnes of almond kernel per hectare. The RFM AF06 almond trees are all are expected to reach mature yields by 2014.
For up to date farm information please refer to the most recent newsletter.
Fund Assets
The number of groves on issue for the Almond Fund 2006 at 6 December 2011 is 846.
The total number of Growers is 170.