Australia Agribusiness Report

Providing expert analysis, independent forecasts and competitive intelligence on the agribusiness industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, Supply & Demand Forecasts, Commodity Price Analysis and Company Profiles.

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Australia Agribusiness Report
Product Price
$1,295.00

BMI View: Australia's agribusiness sector will see its exports increase in the coming years, driven by the rise in production, its reputation as a reliabl e exporter of saf e and quality products and strong external demand. However, the sector's future success will be somewhat held back by increasing production costs and profitability issues weigh on the production outlook . Moreover, the country's vulnerability to extreme weather events will grow in the coming years with climate change, making agricultural production even more volatile. Australia face s increasing competition from lower-cost producers aiming to supply the attractive markets in Asia and the Middle East. Australia has signed a number of trade deals with key importing countries, including the Trans Pacific Partnership, which will help its competitiveness remain satisfactory. Australia will also need to step up investment in some parts of its supply chain in order to improve its competitiveness and reach a new level of innovation, efficiencies and exports.

Growing Exportable Supply Ahead
Australia - Select Commodities Production Balance
Source: ABARES, USDA, BMI

Key Forecasts

  • Beef production growth to 2019/20: -10.2% to 2.3mn tonnes. The negative growth over our forecast period is mainly due to high base effects (production reached a record in 2013/14) and because output will decrease over the 2015-2017 period as farmers rebuilt their herds. Beef production will reaccelerate beyond 2018.

  • Cheese production growth to 2019/20: 10.5% to 380,000 tonnes. Processed dairy products and in particular cheese will grow quite robustly in the coming years, driven by strong demand from Asian markets.

  • Poultry consumption growth to 2020: 19.3% to 1.27mn tonnes. Poultry consumption will prove to be the strongest over the coming years, as consumers continue to choose the meat as a healthier alternative to beef. As such, we forecast consumption per capita to rise to 50kg in 2020, compared with 39kg back in 2010.

  • 2016 BMI universe agribusiness market value: USD40.77bn; down from USD41.29bn in 2015 ; growth expected to average 2.9% annually between 2016 and 2020.

  • 2016 real GDP growth: 2.8%; up from 2.5% in 2015. Forecast to average 2.4% from 2016 to 2020.

  • 2016 consumer price index: 1 .0% change y-o-y; down from 1.5% in 2015. Forecast to average 2.0% from 2016 to 2020.

  • 2016 central bank policy rate (average): 1.50%; down from 2.00% in 2015. Forecast to average 1.75% from 2016 to 2020.

Latest Updates & Industry Developments

Australia is on track to record an exceptional crop in the 2016/17 season, thanks to favourable weather and attractive prices in local currency terms. The harvest of the winter crop (wheat, barley) will start in Q416. Area harvested is forecast to remain stable - at elevated levels - while good weather conditions will boost yields. We have revised up our forecasts for output and now see wheat production growing by a strong 15.0% y-o-y to 27.8mn tones and barley by 10.0% to 9.5mn tones. The outlook for the 2016/17 summer crops (corn, rice) is also good.

Although beef production will decline in 2016 and 2017 as farmers are in process of rebuilding their herd following several years of very strong growth and slaughtering rates, we forecast beef output to start reaccelerating from 2018 onwards. The Australia's beef sector has a promising medium term outlook amidst rising exports markets in Asia for both meat and live cattle.

Following a year of strong growth in 2014/15, Australia's milk production sector entered challenging times in 2016. The country's dairy industry has been partially insulated from weak global dairy fundamentals thanks to its large domestic market, but low international prices have started feeding through local prices in 2016 and will negatively impact domestic milk production this year and next. The upcoming build-up in debt will constrain farm investment in the longer term. Meanwhile, the processing sector is very dynamic and in better shape than the upstream sector.

Australia remains a very attractive investment destination for agriculture, as proven by the recent investment of Brazilian meat producer Minerva in the country. Minerva, South America's third largest beef producer after JBS and Marfrig, acquired in July 2016 non-packer meat exporter IMTP Pty, which has a strong export presence in Asia. Minerva, which operates meat facilities in Brazil, Paraguay, Uruguay and Colombia, exports to the Middle East, Africa, China, the US and Europe.

BMI Industry View
7
SWOT
10
Agribusiness
10
Industry Forecast
12
Grains Outlook
12
Latest Updates
12
Table: Australia - Grains Production And Consumption Outlook
13
Table: Risks To Outlook
13
Structural Trends
14
Table: Grains Production & Consumpton (Australia 2013-2020)
21
Sugar Outlook
22
Latest Updates
22
Table: Australia - Sugar Production And Consumption Outlook
24
Table: Risks To Outlook
24
Structural Trends
25
Table: Australia - Main FTAs Signed Or Under Negotiations
30
Table: Sugar Production & Consumption (Australia 2012-2020)
31
Dairy Outlook
32
Latest Updates
32
Table: Australia - Dairy Production And Consumption Outlook
33
Table: Risks To Outlook
33
Structural Trends
34
Table: Australia Dairy - Recent Company Developments
38
Table: Dairy Production & Consumption (Australia 2013-2020)
39
Livestock Outlook
41
Latest Updates
41
Table: Australia - Livestock Production And Consumption Outlook
42
Table: Risks To Outlook
43
Structural Trends
44
Table: Livestock Production & Consumption (Australia, 2013-2020)
50
Commodities Price Analysis
51
BMI Commodity Price Forecasts
51
Table: SELECT COMMODITIES - PERFORMANCE AND BMI FORECASTS
51
Upstream Analysis
53
Asia GM Outlook
53
Table: Selected Countries - GM Crops Use (mn hectares)
57
Downstream Analysis
59
Food
59
Latest Updates
59
Structural Trends
60
Table: Food Sales (Australia 2013-2020)
61
Regional Overview
63
Competitive Landscape
68
Table: Australia - Major Agribusiness Companies
68
Demographic Forecast
69
Table: Population Headline Indicators (Australia 1990-2025)
70
Table: Key Population Ratios (Australia 1990-2025)
70
Table: Urban/Rural Population & Life Expectancy (Australia 1990-2025)
71
Table: Population By Age Group (Australia 1990-2025)
71
Table: Population By Age Group % (Australia 1990-2025)
72
Methodology
74
Industry Forecast Methodology
74
Sector-Specific Methodology
75

The Australia Agribusiness Report features BMI Research's market assessment and independent forecasts for production, consumption and trade across core agricultural commodities.

BMI's Australia Agribusiness Report includes independent commodity price forecasting and analysis for key agricultural outputs, an overview of the agribusiness competitive landscape and a discussion of the downstream context of agricultural production in relation to country food consumption forecasts and composite food and beverage trade forecasts.

Key Benefits

  • Use BMI's independent industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.
  • Apply BMI's medium-term commodity price analysis to assist with budgetary planning and the identification of investment opportunities and potential risks.
  • Assess the activities and market position of your competitors, partners and clients.

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts and views, highlighting recent changes and key risks to the industry outlook.

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the wider agricultural industry.

BMI Supply & Demand Forecasts

Divided into sections based on various diverse sectors in the agriculture market, the chapter provides insight into each market’s agricultural industry, centred on sector forecasts to end-2019 for the consumption, production and trade of key commodities.

  • Consumption Forecasts: Accompanied by a discussion of the main drivers of consumption growth: macroeconomic factors, food processing trends, price movements and increasingly, demand from the non-food sector.
  • Production Forecasts: Examine the trends influencing BMI’s production outlook: global demand, price increases, public and private sector investment and agricultural efficiency improvements.
  • Trade Forecasts: Accompanied by a discussion of the factors influencing a country’s trade in agricultural goods, including domestic demand, global prices and government trade policies.
  • BMI’s Forecasts: Accompanied by a risks-to-outlook assessment, which examines potential factors that could affect our existing forecast picture and the likelihood of their occurrence.

BMI’s Commodity Price Analysis

Fundamental and technical analysis of the short- and medium-term price outlook for eight agricultural commodities based on globally recognised benchmarks.

Downstream Analysis

Analysis of headline food and drink forecasts, including total food consumption, per capita food consumption and total sector trade, which provide important downstream intelligence for primary agricultural producers.

Featured Analysis

Includes relevant articles from BMI’s daily analysis service. These can include: long-term projections on agricultural imports and exports; our perceptions of the impacts of economic slowdown on key companies and subsectors within the Agribusiness industry in a given country; our analysis of fertilizer production; as well as other relevant analysis of recent news and events.

Competitive Landscape

The reports contain information on prominent companies operating in each market.

Key Commodities Covered By The Agribusiness Market

Reports Include: Grains, Dairy, Livestock, Rice, Sugar, Palm Oil, Edible Oils, Coffee, Cocoa, Cotton, Soybean

Please note – not all reports cover all commodities.

Sources

The Agribusiness reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.