1 00:00:04,200 --> 00:00:07,020 Adam Lang: Welcome to the Fear and Greed Daily Interview. I'm Adam 2 00:00:07,020 --> 00:00:12,180 Adam Lang: Lang. Agricultural farmers are vulnerable to so many factors outside 3 00:00:12,180 --> 00:00:17,070 Adam Lang: their control, from weather to pests. Mariculture, or marine farming, 4 00:00:17,190 --> 00:00:21,060 Adam Lang: faces the same challenges, which means oyster growers are no 5 00:00:21,060 --> 00:00:24,090 Adam Lang: different. This year, we've seen a large chunk of the 6 00:00:24,090 --> 00:00:27,990 Adam Lang: Sydney rock oyster harvest wipe out. Now the industry is 7 00:00:27,990 --> 00:00:31,200 Adam Lang: calling for the public and restaurateurs to rally behind the 8 00:00:31,200 --> 00:00:33,900 Adam Lang: sector in the same way the community got behind dairy 9 00:00:33,900 --> 00:00:38,130 Adam Lang: farmers in 2016. Brad Verdich is an oyster farmer with 10 00:00:38,159 --> 00:00:42,210 Adam Lang: ASX listed oyster grower East 33. Brad joins me this 11 00:00:42,210 --> 00:00:44,099 Adam Lang: morning. Brad, welcome to Fear and Greed. 12 00:00:44,610 --> 00:00:45,839 Brad Verdich: G'day, Adam. Pleasure to be here. 13 00:00:46,680 --> 00:00:50,280 Adam Lang: Why has it been such a tough year for oysters? 14 00:00:50,970 --> 00:00:55,080 Brad Verdich: Look, oysters grow best when they have average rainfall for 15 00:00:55,080 --> 00:00:59,130 Brad Verdich: their estuary. When you have above average rainfall, you have 16 00:00:59,130 --> 00:01:03,420 Brad Verdich: below average growth and survivability of those oysters. That encoupled with 17 00:01:03,480 --> 00:01:07,170 Brad Verdich: some viral impacts that have come about partly because of 18 00:01:07,170 --> 00:01:10,560 Brad Verdich: that rainfall, and some other natural impacts that have happened, 19 00:01:10,770 --> 00:01:13,530 Brad Verdich: we've had three really hard years for oyster farming. 20 00:01:14,010 --> 00:01:16,290 Adam Lang: And three in a row, and I'm sure that they 21 00:01:16,290 --> 00:01:17,581 Adam Lang: have a compounding effect as well. 22 00:01:17,581 --> 00:01:21,690 Brad Verdich: They do. They definitely do. Where a Sydney rock oyster takes 23 00:01:21,840 --> 00:01:24,509 Brad Verdich: three years to grow from our initial catching or growing 24 00:01:24,510 --> 00:01:28,500 Brad Verdich: in the hatchery to delivering into the customer's plate, it's 25 00:01:28,890 --> 00:01:31,620 Brad Verdich: those three years that make the impact and make the 26 00:01:31,620 --> 00:01:34,649 Brad Verdich: difference. So not only does a drought affect you or 27 00:01:34,650 --> 00:01:38,430 Brad Verdich: a flood affect you for that season, it affects you 28 00:01:38,430 --> 00:01:40,319 Brad Verdich: for the next three years ongoing. 29 00:01:41,190 --> 00:01:43,470 Adam Lang: So, in terms of the scale of this impact, you've 30 00:01:43,470 --> 00:01:47,700 Adam Lang: described what's happening and how long it might last, what 31 00:01:47,700 --> 00:01:49,260 Adam Lang: damage has already been done? 32 00:01:49,980 --> 00:01:52,710 Brad Verdich: Well, in terms of impact and scale, last year we 33 00:01:52,710 --> 00:01:56,610 Brad Verdich: looked at around 70 million oysters were produced by the New 34 00:01:56,610 --> 00:01:59,580 Brad Verdich: South Wales Sydney rock oyster industry. We're looking this year 35 00:01:59,580 --> 00:02:02,850 Brad Verdich: to be around 45 to 50 million oysters produced. 36 00:02:03,120 --> 00:02:03,690 Adam Lang: Wow. 37 00:02:03,750 --> 00:02:06,990 Brad Verdich: A fair percentage of that has come from oysters that 38 00:02:07,050 --> 00:02:10,530 Brad Verdich: have been wiped out due to flooding, due to infrastructure 39 00:02:10,530 --> 00:02:14,310 Brad Verdich: being essentially washed out the headlands with the associated oysters 40 00:02:14,580 --> 00:02:17,070 Brad Verdich: going along with it. And in addition to that, there's been a 41 00:02:17,070 --> 00:02:20,790 Brad Verdich: virus called QX, which has heavily impacted the Port Stephens 42 00:02:20,790 --> 00:02:25,139 Brad Verdich: growing area. Port Stephens has, in recent years, produced around 43 00:02:25,139 --> 00:02:29,160 Brad Verdich: 15% of the Sydney rock oyster crop, and those oysters 44 00:02:29,160 --> 00:02:30,720 Brad Verdich: have been basically decimated. 45 00:02:31,530 --> 00:02:34,169 Adam Lang: And when that happens, Brad, what process do you actually 46 00:02:34,169 --> 00:02:36,389 Adam Lang: go through? Are we talking about you have to remove 47 00:02:36,389 --> 00:02:40,260 Adam Lang: those oysters, destroy them, clean and start again? What happens? 48 00:02:40,980 --> 00:02:44,399 Brad Verdich: So, the QX virus is a virus which only affects 49 00:02:44,910 --> 00:02:47,550 Brad Verdich: Sydney rock oysters, it doesn't affect other species of oyster. 50 00:02:47,970 --> 00:02:52,080 Brad Verdich: And when it affects the oyster, it essentially prevents the 51 00:02:52,080 --> 00:02:55,260 Brad Verdich: oyster from taking nutrition from the environment. It inflames its 52 00:02:55,350 --> 00:02:58,919 Brad Verdich: intestines and its guts, so it stops the oyster from growing 53 00:02:58,919 --> 00:03:01,440 Brad Verdich: and feeding. So the oyster can still be alive, but 54 00:03:01,440 --> 00:03:04,740 Brad Verdich: it's essentially starving to death when it's infected. So when 55 00:03:04,740 --> 00:03:06,660 Brad Verdich: we pick up an oyster and look at it, on 56 00:03:06,660 --> 00:03:08,820 Brad Verdich: the outside it looks healthy, and we can put it 57 00:03:08,820 --> 00:03:11,190 Brad Verdich: in a bag and ship it off to our processing depot 58 00:03:11,190 --> 00:03:14,610 Brad Verdich: to be opened and served to customers. It's not until 59 00:03:14,610 --> 00:03:17,760 Brad Verdich: it's opened that you can usually tell whether that oyster 60 00:03:17,760 --> 00:03:19,619 Brad Verdich: is sick or healthy. 61 00:03:19,980 --> 00:03:20,459 Adam Lang: Wow. 62 00:03:20,669 --> 00:03:23,250 Brad Verdich: The virus doesn't affect humans, it has no effect on 63 00:03:23,250 --> 00:03:26,790 Brad Verdich: humans in any manner at all. But the costs in 64 00:03:27,120 --> 00:03:29,580 Brad Verdich: sorting through those oysters to figure out which ones are 65 00:03:29,580 --> 00:03:31,560 Brad Verdich: the good oysters and which ones are the bad oysters 66 00:03:31,980 --> 00:03:35,970 Brad Verdich: is fairly impactful. That couple with you've already lost 80% 67 00:03:35,970 --> 00:03:38,430 Brad Verdich: of your crop, so now you've got 20% left, that 68 00:03:38,430 --> 00:03:42,780 Brad Verdich: 20% that's left, 50% is sick and dying, and the other 50% 69 00:03:42,780 --> 00:03:47,100 Brad Verdich: is still serviceable. So there's a big weigh up of 70 00:03:47,100 --> 00:03:49,260 Brad Verdich: what you've got to do to get the oysters that 71 00:03:49,260 --> 00:03:51,390 Brad Verdich: you have. How much labor do you want to put 72 00:03:51,390 --> 00:03:53,280 Brad Verdich: into getting the oysters that you have that are still 73 00:03:53,280 --> 00:03:56,820 Brad Verdich: alive onto market? Or do you say, " No, I'll scrap 74 00:03:56,820 --> 00:03:59,190 Brad Verdich: those and step away for a while and see what 75 00:03:59,190 --> 00:04:02,610 Brad Verdich: happens with the environment"? Do I change my production and 76 00:04:02,610 --> 00:04:05,100 Brad Verdich: change to a different species and change over to the Pacific 77 00:04:05,130 --> 00:04:09,180 Brad Verdich: oyster, which isn't affected by the QX virus, or do 78 00:04:09,180 --> 00:04:10,920 Brad Verdich: I hold out and wait to see if the QX 79 00:04:10,920 --> 00:04:14,220 Brad Verdich: virus comes back in another season and try my luck again? 80 00:04:14,910 --> 00:04:17,430 Adam Lang: So, all of the challenges that you've outlined, and they 81 00:04:17,430 --> 00:04:21,420 Adam Lang: can be devastating, what is so special about Sydney rock 82 00:04:21,450 --> 00:04:23,070 Adam Lang: oysters that makes them worth growing? 83 00:04:23,730 --> 00:04:26,489 Brad Verdich: Look, if you took a pile of oysters that were 84 00:04:26,490 --> 00:04:31,770 Brad Verdich: grown commercially worldwide, and there's say 36,000 oysters in that pile, only 85 00:04:31,770 --> 00:04:34,140 Brad Verdich: one of those oysters would be a Sydney rock oyster. 86 00:04:34,470 --> 00:04:34,710 Adam Lang: Wow. 87 00:04:35,190 --> 00:04:39,390 Brad Verdich: It's less than 0. 1%. Now, here in New South Wales, 88 00:04:39,390 --> 00:04:42,450 Brad Verdich: and Sydney especially, we don't see a Sydney rock oyster 89 00:04:42,450 --> 00:04:47,250 Brad Verdich: as being a rarity or a scarce commodity. That's because 90 00:04:47,250 --> 00:04:50,640 Brad Verdich: they're so prevalent on menus everywhere you see, but in 91 00:04:50,640 --> 00:04:53,339 Brad Verdich: actual fact, on a worldwide scale, they're actually a very 92 00:04:53,339 --> 00:04:56,430 Brad Verdich: rare oyster and a very special oyster. They're, I believe, one 93 00:04:56,430 --> 00:05:00,240 Brad Verdich: of the best- tasting oysters in the world, and they 94 00:05:00,240 --> 00:05:02,190 Brad Verdich: should be treasured and valued as such. 95 00:05:02,820 --> 00:05:05,400 Adam Lang: They're a great delicacy, and I think Brad, like you 96 00:05:05,400 --> 00:05:07,710 Adam Lang: suggested, I'm one of the lucky ones who get to 97 00:05:08,220 --> 00:05:12,180 Adam Lang: eat these from time to time. The difference between Sydney 98 00:05:12,180 --> 00:05:15,000 Adam Lang: rock oysters and Pacific oysters, you've talked about the three- 99 00:05:15,000 --> 00:05:18,270 Adam Lang: year growing cycle and other oysters, what's the growing time 100 00:05:18,270 --> 00:05:21,750 Adam Lang: like, the location, the availability and that kind of thing 101 00:05:22,080 --> 00:05:25,380 Adam Lang: that increasingly makes the Sydney rock oysters so precious? 102 00:05:25,800 --> 00:05:29,730 Brad Verdich: In comparison to a Pacific oyster, a Sydney rock oyster, 103 00:05:30,060 --> 00:05:32,520 Brad Verdich: as you said, takes three years to grow, whereas a 104 00:05:32,520 --> 00:05:36,210 Brad Verdich: Pacific oyster takes 12 to 18 months. Still a very good oyster 105 00:05:36,210 --> 00:05:38,880 Brad Verdich: and great eating, and we've got some wonderful producers in 106 00:05:38,880 --> 00:05:42,330 Brad Verdich: Australia that produce high- quality Pacific oysters. But of that 107 00:05:42,330 --> 00:05:47,010 Brad Verdich: 36,000 oysters that we mentioned before produced worldwide, 95% of 108 00:05:47,010 --> 00:05:51,720 Brad Verdich: those are Pacific oysters. So when we're talking less than 0. 1% 109 00:05:52,529 --> 00:05:58,260 Brad Verdich: are Sydney rock worldwide, more than 95% are Pacific. So 110 00:05:58,950 --> 00:06:01,830 Brad Verdich: the reason why the Pacific is so prolific around the 111 00:06:01,830 --> 00:06:04,589 Brad Verdich: world is how fast they grow and how easily they 112 00:06:04,589 --> 00:06:08,700 Brad Verdich: adapt to different climates. Originally, they're endemic to Japan and 113 00:06:08,700 --> 00:06:14,010 Brad Verdich: they've been transported around the world on ships as we've 114 00:06:14,010 --> 00:06:17,760 Brad Verdich: moved into industrial ages, allowed oysters to move around the 115 00:06:17,760 --> 00:06:20,099 Brad Verdich: world at a much faster rate, and people have selected them 116 00:06:20,100 --> 00:06:23,550 Brad Verdich: to grow in their local estuaries and in local oceans, 117 00:06:23,940 --> 00:06:27,270 Brad Verdich: so that they can grow them quickly and we get 118 00:06:27,270 --> 00:06:29,940 Brad Verdich: a high- quality protein at a quick rate. 119 00:06:30,060 --> 00:06:38,039 Adam Lang: Stay with me. We'll be back in a minute. I'm 120 00:06:38,040 --> 00:06:42,599 Adam Lang: speaking to East 33 oyster farmer, Brad Verdich. So you 121 00:06:42,600 --> 00:06:46,289 Adam Lang: mentioned that the oyster harvest, the Sydney rock oyster harvest 122 00:06:46,290 --> 00:06:49,560 Adam Lang: coming up has been declining again this year and in 123 00:06:49,560 --> 00:06:53,130 Adam Lang: recent decades, could it reach the point of not being 124 00:06:53,130 --> 00:06:54,540 Adam Lang: economically viable anymore? 125 00:06:55,500 --> 00:06:59,400 Brad Verdich: Well, when you look back historically, the Sydney rock oyster 126 00:06:59,400 --> 00:07:04,109 Brad Verdich: industry back in 1976 produced over 200 million oysters. Last year, 127 00:07:04,110 --> 00:07:06,750 Brad Verdich: we produced 70 million, and this year we're looking at 128 00:07:06,750 --> 00:07:09,989 Brad Verdich: 50. So we can say that that drop from 70 to 50 129 00:07:09,990 --> 00:07:13,470 Brad Verdich: is probably due to weather- induced and viral impacts. But 130 00:07:13,470 --> 00:07:17,100 Brad Verdich: the drop from 200 to 70, in my belief, has been caused 131 00:07:17,100 --> 00:07:19,950 Brad Verdich: because of downward pressure on farm gate prices. 132 00:07:20,370 --> 00:07:20,371 Adam Lang: Okay. 133 00:07:20,371 --> 00:07:24,690 Brad Verdich: And that downward pressure has essentially come because there hasn't 134 00:07:24,690 --> 00:07:27,989 Brad Verdich: been a vertically- integrated player in the market that has recognized, " Hey, 135 00:07:28,020 --> 00:07:30,540 Brad Verdich: what's the true cost to grow an oyster?" And rewarding 136 00:07:30,540 --> 00:07:33,330 Brad Verdich: the farmers for that product, where there was that vertically- 137 00:07:33,330 --> 00:07:37,290 Brad Verdich: integrated farmers back in the 1970s and the early 1980s. 138 00:07:37,950 --> 00:07:41,250 Adam Lang: So, Brad, on that, how does East 33 work? 139 00:07:42,300 --> 00:07:45,660 Brad Verdich: Well, East 33 is a publicly- listed company, as you 140 00:07:45,660 --> 00:07:49,080 Brad Verdich: mentioned in your introduction, but essentially it was nine founding 141 00:07:49,320 --> 00:07:54,300 Brad Verdich: oyster farming families that have been farming since 1883, I believe is the 142 00:07:54,300 --> 00:07:58,200 Brad Verdich: earliest lease holdings that were incorporated into the company. That 143 00:07:58,200 --> 00:08:01,050 Brad Verdich: was with the Brown family. My family's the Verdich family, 144 00:08:01,050 --> 00:08:05,490 Brad Verdich: we've been oyster farming since the '50s and '60s, started in the 145 00:08:05,490 --> 00:08:08,580 Brad Verdich: southern shore. My grandfather, the youngest brother of I think 146 00:08:08,760 --> 00:08:12,000 Brad Verdich: four or five brothers, and they were all oyster farms and fishermen. They 147 00:08:12,000 --> 00:08:14,340 Brad Verdich: moved up and down the coast and did highway oyster 148 00:08:14,340 --> 00:08:17,520 Brad Verdich: farming, which was moving oysters from one estuary to another 149 00:08:17,520 --> 00:08:20,370 Brad Verdich: estuary to take advantage of the best characteristics of each 150 00:08:20,370 --> 00:08:25,110 Brad Verdich: estuary. So, in doing that, we've also brought together, when 151 00:08:25,110 --> 00:08:27,900 Brad Verdich: East 33 came together as a company, we're brought together 152 00:08:27,900 --> 00:08:33,001 Brad Verdich: a processing depot in Sydney called CMB Oysters, it is now (inaudible) 153 00:08:33,001 --> 00:08:36,240 Brad Verdich: East 33 farming as well, and they've been serving 154 00:08:36,240 --> 00:08:40,020 Brad Verdich: the market for over 30 years. So through that network of 155 00:08:40,110 --> 00:08:43,770 Brad Verdich: suppliers, they've been buying oysters from oyster farmers from up 156 00:08:43,770 --> 00:08:47,160 Brad Verdich: and down the coast, and using that network of sharing 157 00:08:47,160 --> 00:08:51,270 Brad Verdich: infrastructure and sharing resources to be able to farm effectively 158 00:08:51,270 --> 00:08:54,420 Brad Verdich: and efficiently for whatever conditions that are thrown up to us. 159 00:08:55,770 --> 00:08:59,220 Adam Lang: So, bringing some scale and efficiency to the whole production 160 00:08:59,220 --> 00:09:03,179 Adam Lang: process. And in terms of the challenges that you've described, 161 00:09:03,210 --> 00:09:05,969 Adam Lang: what are you hoping to see in terms of support 162 00:09:06,059 --> 00:09:07,020 Adam Lang: for the industry, Brad? 163 00:09:07,860 --> 00:09:10,920 Brad Verdich: I guess what I'd love to see is the general 164 00:09:10,920 --> 00:09:13,650 Brad Verdich: public be aware of the difference between a Sydney rock 165 00:09:13,650 --> 00:09:16,620 Brad Verdich: oyster and a Pacific oyster, for one. That it takes three 166 00:09:16,620 --> 00:09:19,530 Brad Verdich: years to grow a Sydney rock oyster and 12 to 18 months for a 167 00:09:19,530 --> 00:09:22,979 Brad Verdich: Pacific, and therefore, when you put them on the menu, 168 00:09:23,070 --> 00:09:25,679 Brad Verdich: we should differentiate between a Sydney rock oyster and a 169 00:09:25,679 --> 00:09:29,820 Brad Verdich: Pacific oyster. A Sydney rock oyster is a native oyster to the New South 170 00:09:29,820 --> 00:09:33,330 Brad Verdich: Wales coastline, growing in only 41 locations, and we want 171 00:09:33,330 --> 00:09:35,880 Brad Verdich: to respect that providence of the Sydney rock oyster, of 172 00:09:35,880 --> 00:09:36,569 Brad Verdich: where it's come from. 173 00:09:36,840 --> 00:09:41,010 Adam Lang: Yeah, that it is native to this area. And Brad, you mentioned oyster 174 00:09:41,010 --> 00:09:43,740 Adam Lang: farming's been in your family, not just as East 33 175 00:09:43,740 --> 00:09:47,130 Adam Lang: now, but for some generations. Take me back. When did 176 00:09:47,130 --> 00:09:48,330 Adam Lang: you eat your first oyster? 177 00:09:48,330 --> 00:09:51,540 Brad Verdich: I think there's a photo of me eating an oyster 178 00:09:51,540 --> 00:09:52,771 Brad Verdich: when I'm about two years old. 179 00:09:52,771 --> 00:09:53,011 Adam Lang: Okay. 180 00:09:55,020 --> 00:09:56,250 Brad Verdich: I don't think I had the best look on my 181 00:09:56,250 --> 00:09:57,179 Brad Verdich: face when I did it, but... 182 00:09:59,610 --> 00:10:02,250 Adam Lang: You later learned to appreciate the delicacy of the Sydney 183 00:10:02,250 --> 00:10:02,940 Adam Lang: rock oyster? 184 00:10:03,179 --> 00:10:06,750 Brad Verdich: That's right. I've grown up on the farm. After school 185 00:10:06,750 --> 00:10:08,939 Brad Verdich: and on the school holidays and on the weekends, my 186 00:10:08,940 --> 00:10:12,300 Brad Verdich: job was to be on the oyster farm and hold 187 00:10:12,300 --> 00:10:14,250 Brad Verdich: the boat as it was moving along down the rows 188 00:10:14,250 --> 00:10:16,980 Brad Verdich: as the farm were picking up the trays. And as 189 00:10:16,980 --> 00:10:19,109 Brad Verdich: I get older, I start doing the jobs alongside the 190 00:10:19,590 --> 00:10:21,479 Brad Verdich: men that are working there and the women that are 191 00:10:21,480 --> 00:10:25,890 Brad Verdich: working there, and yeah, it's been a really rewarding way 192 00:10:25,890 --> 00:10:28,410 Brad Verdich: of living. I've gone off and done other things in 193 00:10:28,410 --> 00:10:31,500 Brad Verdich: my career, but I've always kept being drawn back to 194 00:10:31,500 --> 00:10:35,490 Brad Verdich: oyster farming, just because of the way of interacting with 195 00:10:35,490 --> 00:10:37,860 Brad Verdich: the environment and caring for a natural product. 196 00:10:38,190 --> 00:10:40,979 Adam Lang: That's a great story. So, Brad, having appreciated that through 197 00:10:40,980 --> 00:10:44,520 Adam Lang: your life almost, as apprentice now to running an operation, 198 00:10:44,940 --> 00:10:47,790 Adam Lang: how good is it to be part of East 33? 199 00:10:48,780 --> 00:10:54,420 Brad Verdich: East 33 has essentially allowed us to take control and 200 00:10:54,420 --> 00:10:57,240 Brad Verdich: look at the future. Whereas before, as a family business, 201 00:10:57,240 --> 00:11:00,420 Brad Verdich: we were looking at what are we doing next week 202 00:11:00,750 --> 00:11:03,510 Brad Verdich: and next month, now we're able to sit down and say, " 203 00:11:03,570 --> 00:11:06,329 Brad Verdich: Okay, what are we doing in 10 and 15 years?" So 204 00:11:06,330 --> 00:11:08,280 Brad Verdich: we have a long- term plan, not just for our 205 00:11:08,280 --> 00:11:11,189 Brad Verdich: business, but for the industry as a whole. It's essential that 206 00:11:11,730 --> 00:11:15,120 Brad Verdich: if we want the Sydney rock oyster industry to survive, 207 00:11:15,120 --> 00:11:17,760 Brad Verdich: that we have to put in some strategic planning and 208 00:11:17,760 --> 00:11:22,290 Brad Verdich: actions behind those plans that allow us to encourage growth 209 00:11:22,770 --> 00:11:24,420 Brad Verdich: and profitability in the industry. 210 00:11:24,660 --> 00:11:27,540 Adam Lang: That's terrific, Brad, and I'll be very happy to keep 211 00:11:27,540 --> 00:11:30,569 Adam Lang: supporting the Sydney rock oyster market. Thanks so much for 212 00:11:30,570 --> 00:11:31,680 Adam Lang: talking to Fear and Greed. 213 00:11:32,400 --> 00:11:33,569 Brad Verdich: No problem. Thank you very much, Adam. 214 00:11:34,290 --> 00:11:37,710 Adam Lang: That was Brad Verdich, an oyster farmer with ASX listed company 215 00:11:37,710 --> 00:11:41,190 Adam Lang: East 33. This is the Fear and Greed Daily Interview. 216 00:11:41,190 --> 00:11:43,650 Adam Lang: Join us every morning for the full episode of Fear 217 00:11:43,679 --> 00:11:47,790 Adam Lang: and Greed, Australia's most popular business podcast. I'm Adam Lang. 218 00:11:48,150 --> 00:11:49,050 Adam Lang: Enjoy your day.