National Poll Dorset Conference 2017 Alexandra Gartmann, CEO and Managing Director Rural Bank and Rural Finance Internal Document Only
Earth according to geography
Earth according to population
We need to grow more food in the next 40-years than we have in the past 10,000 2 billion extra people by 2050 2.7 billion middle class in Asia by 2050
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 - 500 1,000 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 2013 5
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
Interest rate environment Source: Bank of England, June 2015
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Is it any wonder then that we re reading things like this. The World goes nuts for Australian produce
Export value: Australian Agri-Food Trade 2015/16 Report $46b
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 2015-16; 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 2015-16, 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 $226m in 2015/16, up 55% from 2012-13
million head million head slaughtered National sheep flock and slaughter 140 120 100 80 60 40 20 0 25 20 15 10 5 0 Sheep flock (LHS) Lamb slaughter (RHS) Sheep slaughter (RHS) Source: Meat and Livestock Australia
Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 cents per kilogram cwt National Trade Lamb Indicator 700 650 600 550 500 450 400 350 300 250 Source: Meat and Livestock Australia
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 kg per capita Australian per capita lamb consumption 20 18 16 14 12 10 8 6 4 2 0 Lamb Mutton
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Retail price ($/kg) Retail prices for red meat have been increasing while chicken remains steady 20 18 16 14 12 10 8 6 4 2 0 Beef Lamb Chicken Source: Meat and Livestock Australia
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 '000 tonnes Australian lamb production and consumption 550 500 450 400 350 300 250 200 150 100 50 0 Production Consumption
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Quantity exported ( 000 tonnes) Australian lamb exports 300 250 200 150 100 50 0 United States China United Arab Emirates Papua New Guinea Qatar Others
tonnes swt ('000) Top 5 lamb export markets 70 60 50 40 2014 2015 2016 30 20 10 0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 '000 tonnes US lamb and mutton market production 200 180 160 140 120 100 80 60 40 20 0 Production Consumption Imports Source: United States Department of Agriculture
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 1,000 900 800 2015 2016 2017 Source: AWEX
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
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.
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