Elders Slumps 2.8% on Bleak Trading Outlook Amid Drought

Highlights:

• Elders Limited (ASX: ELD) shares fell 2.8% after issuing a cautious trading update impacted by ongoing drought conditions across southern Australia.
• The agribusiness warned of reduced crop yields and lower rural supply sales, particularly in South Australia and western Victoria.
• Analysts expect the company to rely on livestock, animal health, and agritech segments to offset weather-related losses in the coming months.

Drought Hits Earnings Forecasts

Elders Limited (ASX: ELD) was among the steepest fallers on the Australian share market after releasing a downbeat trading update. At the time of writing, its share price is down 2.8 percent, reflecting investor concern over weakening conditions in southern Australia. The company warned that persistent drought in key agricultural regions is straining crop yields and constraining income from its rural supplies and services divisions.

Market Response & Investor Sentiment

Investors reacted swiftly, pricing in lower revenue and margin expectations. Elders, which provides a broad suite of agribusiness services — from rural supplies and agronomy to processing and financial support — is seen as vulnerable when seasonal conditions deteriorate.

Analysts suggest that the impact will vary across regions, with the hardest hit areas in South Australia and western Victoria. Some anticipate that compensation via livestock, fertilizer, or input sales may partly offset lost cropping income.

Broader Risks & Strategic Considerations

While Elders has posted resilient earnings in prior periods, the company now faces upside challenges tied to weather variability, input cost inflation, and supply chain volatility. To strengthen resilience, Elders might lean further into non-crop segments like animal health, agritech advisory, or feed processing. Its recent move to acquire Delta Agribusiness (subject to regulatory approval) could also help diversify geographic exposure and product range. (At the time of writing, Elders Limited shares had declined by about 2.8 percent.)

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