How Is SunRice Shaping Its Future Amid Record Crop Yields and Industry Challenges?

A Milestone Year for SunRice

Ricegrowers Limited, trading as SunRice, celebrated its 75th anniversary in 2025, marking a journey from a local cooperative to a global food business operating across 10 countries and supplying over 50 markets. The company’s 2025 Annual General Meeting, held in Griffith, New South Wales, highlighted a year of solid financial performance and strategic progress despite ongoing challenges in the rice industry.

Chairman Laurie Arthur, concluding his 18-year tenure, reflected on the company’s evolution and resilience. Under his leadership, SunRice transitioned from a cooperative to a publicly listed entity on the ASX in 2019, broadening its investor base and positioning for future growth. John Bradford, a long-serving Grower Director, was appointed as the new Chairman, ensuring continuity in governance.

Financial Performance Amid Market Pressures

For the financial year ending April 2025, SunRice reported revenue of $1.85 billion, a slight 2% decline from the previous year, while EBITDA rose 3% to $147.7 million and net profit after tax increased 4% to $70.7 million. The company attributed improved profitability to a favorable shift towards higher-value branded products, operational efficiencies, and disciplined cost management.

Despite these gains, the medium-grain paddy price for the 2024 crop year settled at $406 per tonne, down from $430 in FY24. This decline was driven by the lowest wholegrain mill-out rates in over five years and increased competition from international suppliers, notably the rebound of the Californian rice crop. These factors exerted downward pressure on global tender prices, impacting returns to growers.

Exceptional Crop Yields and Stable Outlook

Looking ahead, the 2025 Riverina crop (CY25) delivered exceptional on-farm yields, including a world-record average yield of 17.3 tonnes per hectare for the Matilda variety. The total harvest of approximately 511,000 paddy tonnes is expected to support a full milling program and robust branded sales in FY26. Consequently, SunRice maintained its paddy price guidance for medium grain rice in the range of $380 to $450 per tonne for FY26.

However, the company cautioned that historically low mill-out rates for the CY24 and CY25 crops continue to pressure expected returns. Additionally, water reform uncertainty, currency fluctuations, particularly the Australian dollar and Papua New Guinea kina, and inflationary cost pressures remain challenges for the year ahead.

Advancing the 2030 Growth Strategy

SunRice is actively executing its 2030 Growth Strategy, which centers rice at the heart of its ambition to become a highly differentiated, value-added food company. Key strategic priorities include product innovation, sustainability leadership, international market expansion, and operational efficiency.

In FY25, the company launched over 40 new products across categories such as core rice, microwave rice, snacks, bakery, and ready meals. Sustainability milestones included validation of Science Based Targets, release of a Net Zero Roadmap, and achieving an 'A' rating for its Modern Slavery Statement benchmarking. The company also progressed packaging sustainability, with 95% of Australian consumer goods packaging now recyclable, reusable, or compostable.

Organizationally, SunRice restructured into market-based divisions to deepen expertise and responsiveness in key regions, including Australia & New Zealand, the Middle East, and the United States. Strategic acquisitions such as SavourLife and Simply Delish expanded the company’s footprint in pet food and complementary food categories.

Navigating Industry Challenges

Water reform remains a critical issue for SunRice and the broader Riverina rice industry. The company continues to advocate for balanced water policies that support both environmental outcomes and the long-term viability of irrigation-dependent agriculture. The end of rice vesting on 1 July 2025 introduces new flexibility to align volumes with demand and reward quality, marking a new era for growers and the company alike.

SunRice also faces competitive pressures from lower-priced offerings in key markets, currency volatility affecting import costs, and inflationary pressures that could moderate growth in FY26. The company remains vigilant about geopolitical risks, including ongoing conflicts in the Middle East and trade policy uncertainties impacting global supply chains.

Looking Forward

Despite these headwinds, SunRice expressed confidence in its growth prospects for FY26, supported by a strong innovation pipeline, brand strength, market expansion opportunities, and operational improvements. The company plans to invest in upgrading its Riverina manufacturing facilities to enhance capacity and productivity, further reinforcing its competitive position.

With a track record of delivering total shareholder returns of 350% over the past decade, significantly outperforming the ASX300 Accumulation Index, SunRice aims to continue creating value for both its grower shareholders and B Class investors. The leadership transition and strategic initiatives position the company well to navigate the evolving landscape and build on its rich heritage.