Grains marketer and maltster GrainCorp is facing a challenging year, with smaller crops, dry weather and tough competition from rivals.
Shareholders at GrainCorp's annual meeting heard that estimates for crop production in Australia's eastern states were below normal.
"There will again be a challenging year in the next 12 months," GrainCorp chairman Don Taylor said.
"We have another relatively dry winter behind us and have largely finished receiving a second consecutive, smaller crop, where market competition has never been more intense."
Mr Taylor said, however, that the company's diversification into other areas such as edible oils and malt production had enabled it to generate earnings more consistently, and pay dividends.
He said good progress was being made on projects aiming to boost growth in the oils business.
Chief executive Mark Palmquist said the estimated production of wheat, barley, canola and sorghum in eastern Australia for fiscal 2015 was below the norm.
Lower production meant there was significant competition for grain in eastern Australia, and GrainCorp's receivals for the year would be lower.
The lower production also meant there was less grain available for export, and GrainCorp's exports for 2015 would be down on the prior year.
Consequently, GrainCorp was looking for opportunities to acquire additional grain from western and southern Australia, and from overseas.
"We're going to keep looking at ways so we can expand it (the sourcing of grain) further," Mr Palmquist said.
"It helps us generate some more revenue, but it also helps us manage risk."
Mr Palmquist said overseas customers were looking for suppliers with scale and who could offer a secure supply for up to five years.
He said GrainCorp did not have a massive capital program going on to buy assets outside of Australia.
GrainCorp was considering options requiring little or no capital, such as contracting with other grain companies, joint ventures or long-term agreements.
Mr Palmquist said the market for edible oils had been challenging in fiscal 2014 but was looking more stable in fiscal 2015.
The malting business was in pretty good shape, with margins holding up and benefits from the lower value of the Australian dollar.
GrainCorp suffered a 64 per cent fall in net profit in the year to September 30 to $50.3 million, partly due to the impact of drought and dry weather on grains production in Australia's east.
Shares in GrainCorp were 16 cents higher at $8.06 at 1252 AEDT.
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