National Poll Dorset Conference Alexandra Gartmann, CEO and Managing Director Rural Bank and Rural Finance

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1 National Poll Dorset Conference 2017 Alexandra Gartmann, CEO and Managing Director Rural Bank and Rural Finance Internal Document Only

2 Earth according to geography

3 Earth according to population

4 We need to grow more food in the next 40-years than we have in the past 10,000 2 billion extra people by billion middle class in Asia by 2050

5 NZL AUS POL CZE AUT CAN FIN FRA DEU HUN KOR LVA GRC IRL DNK BEL EST SWE USA ESP LTU ROU SVN NLD JPN BGR ITA CYP GBR PRT The sector: a snapshot World consumption by 2050 Sheep and goat meat 2007 Beef and veal 2050 Dairy products Fruits and vegetables ,000 1,500 2,000 ABARE projections Every farm gate $1 generates a further $5.10 along the value chain 1 Currently, each Australian farmer grows enough food to feed 600 people, 150 at home and 450 overseas. 2 There are about 135,000 farm businesses in Australia 99% of which are family owned, and produce ~ 93% of the domestic food supply 3 In 2013/2014 Agriculture accounted for about 2% of Australia s total GDP (farm gate) and 15% of Australia's non-services GDP 4 Trade Agreements are opening up export markets Mining boom myth busted agri is the glamour industry Mining Agriculture $250b $436b Australia has the 2 nd highest % of farmers aged <35 years in the world 5 190k 1.4b Source 1: Neil Clark & Assoc 2: National Farmers Federation 3 & 4: ABARES 5: Neil Barr 2006 Employment Contribution to Aust. economy NCA Jun

6 Australian lending market Grain Mixed Cropping Beef Sheep Mixed Livestock Dairy Cotton Sugar Fruit Grapes Vegetable Intensive Market National lending market by industry 4% 5% 3% 20% 6% 2% 6% 13% 3% 4% 22% 12% Source: NCA Jul 2015 Page 6

7 Interest rate environment Source: Bank of England, June 2015

8 to provide exceptional financial services, knowledge and leadership for Australian farmers to grow

9 Meet the family corporate 21 st century farmers

10 Building strong relationships with customers and partners founded on shared value principles

11 Meet the family corporate 21 st century farmers

12 Meet the family corporate 21 st century farmers

13 Is it any wonder then that we re reading things like this. The World goes nuts for Australian produce

14 Export value: Australian Agri-Food Trade 2015/16 Report $46b

15 But what about lamb, mutton, wool and goat? Let s ask Barnaby: ABARES Outlook 2017 Highest wool prices since 1988: last week closing at 1449c/kg, with wool exports valued at $3.3 billion in ; Over 40% increase in lamb prices - over $6/kg dressed weight, and 100% increase in mutton prices at $4.22/kg dressed weight; Sheepmeat exports are worth over $2.2 billion in , and live sheep exports worth another $226 million; A 191% increase in the price of goats, to over $6/kg; and with goat meat exports worth $226m in 2015/16, up 55% from

16 million head million head slaughtered National sheep flock and slaughter Sheep flock (LHS) Lamb slaughter (RHS) Sheep slaughter (RHS) Source: Meat and Livestock Australia

17 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 cents per kilogram cwt National Trade Lamb Indicator Source: Meat and Livestock Australia

18 kg per capita Australian per capita lamb consumption Lamb Mutton

19 Retail price ($/kg) Retail prices for red meat have been increasing while chicken remains steady Beef Lamb Chicken Source: Meat and Livestock Australia

20 '000 tonnes Australian lamb production and consumption Production Consumption

21 Quantity exported ( 000 tonnes) Australian lamb exports United States China United Arab Emirates Papua New Guinea Qatar Others

22 tonnes swt ('000) Top 5 lamb export markets

23 '000 tonnes US lamb and mutton market production Production Consumption Imports Source: United States Department of Agriculture

24 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Eastern Market Indicator 1,500 1,400 1,300 1,200 1,100 1, Source: AWEX

25 Seasonal conditions - rainfall Recent rainfall: Rainfall deciles for 1 st November 2016 to 31 st January 2017 Rainfall outlook: Chance of above median rainfall for February to April 2017 Source: BoM

26 Industry outlook Prices: Strong restocker demand to support prices and producers look to rebuild flocks. Growing export demand from the USA and Middle East will also help support lamb prices. Seasonal conditions: The outlook until April is for warmer and drier conditions than average. However, pastures will benefit from good soil moisture being held from last year. Production: Lamb slaughter likely to fall slightly while producers retain stock and rebuild flocks. Production likely to begin to increase later in the year with greater lamb numbers and a growing flock.

27 Subscribe to Ag Answers at: ruralbank.com.au

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