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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  • Get a full view of the competitive landscape to assess your market position
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Australia Agribusiness Report
Product Price
$1,295.00

BMI View: Australia's agribusiness sector will see its exports grow 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 rising production costs and profitability issues that are weighing 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 has to face rising competition coming from lower-cost producers that aim at supplying 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
f = BMI forecast. Source: BMI, USDA

Key Forecasts

  • Beef production growth to 2019/20: -9.9% 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 2015-2017 as farmers rebuild their herds. Beef production will reaccelerate beyond 2018.

  • Milk production growth to 2019/20: 7.4% to 10.4mn tonnes. Milk production will grow only modestly in the coming years as the sector struggles to expand the herd, while yields are already elevated and will see limited further growth. Meanwhile, the processing sector is very dynamic and will grow strongly in the coming years, requiring more domestic supply.

  • 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: USD40.91bn; down from USD41.31bn in 2015; growth expected to average 2.2% annually between 2016 and 2020.

  • 2016 real GDP growth: 2.4%; down from 2.5% in 2015. Forecast to average 2.3% from 2016 to 2020.

  • 2016 consumer price index: 1.0% change y-o-y ave; down from 1.5% in 2015. Forecast to average 2.0% from 2016 to 2020.

  • 2016 central bank policy rate : 1.50% eop; down from 2.00% in 2015. Forecast to average 2.10% from 2016 to 2020.

Latest Updates & Industry Developments

The potential onset of La Nina in H216 poses mixed risks to Australia's agricultural production. The phenomenon, which has around 50-75% chance of emerging this year according to various meteorological departments, is often but not always associated with above-average winter-spring rainfall over northern, central and eastern Australia. La Nina usually happens in the second part of the year, ahead and during Australia's winter crop harvest (wheat, barley). The last La Nina episodes impacted the grain crop. According to the Australia Bureau of Meteorology, 2010 and 2011 were two of the three wettest years the country ever recorded since 1900, corresponding with the 2010-2011 La Nina (July 2010-March 2011, of moderate strength) and 2011-2012 La Nina (October 2011 to February 2012, of weak strength), which brought heavy rainfall and flooding on the eastern regions.

Although overall grains production was not impacted due to the good distribution of production in the country, the rain damaged wheat quality. As such, excessive rains and flooding could significantly damage the grain crop in Queensland and New South Wales, but slightly above-average rains could be beneficial for the crop. The risks stemming from La Nina to the 2016/17 sugar crop are to the downside, as sugar production is concentrated in Queensland.

Australia's beef sector is in a middle of a boom, as production is at historical levels and exports are soaring. After recording very strong growth in 2013 and 2014, beef output is now on a temporary decline as farmers have started rebuilding their herds. However, we forecast beef production to reaccelerate beyond 2018, driven by robust demand from importing countries. Live cattle exports also soared in 2015, reaching a record level of 1.2mn tonnes, close to the 1.3mn tonnes of beef meat exports. Indonesia's need for beef cattle and Vietnam's booming dairy industry have been fuelling this market. Live cattle exports are likely to remain strong in the coming years.

Australia's largest grain exporter, Cooperative Bulk Handling (CBH) received - and rejected - a buyout proposal by Australian Grains Champion (AGC), a consortium backed by GrainCorp, over February-March 2016. This comes as competition in the local grains handling business is rising, with Bunge making inroads into CBH's traditional markets. This change of structure away from the traditional cooperative model is a sign of the ongoing debates within Australia's agribusiness sector. The country has been deregulating this sector over recent years, a move that is sometimes rejected by farmers, such as in the case of the sugarcane industry.

BMI Industry View
7
SWOT
10
Agribusiness
10
Industry Forecast
12
Grains Outlook
12
Table: Australia - Grains Production And Consumption Outlook
13
Table: Risks To Outlook
13
Table: Grains Production & Consumpton (Australia 2013-2020)
19
Sugar Outlook
20
Table: Australia - Sugar Production And Consumption Outlook
22
Table: Risks To Outlook
22
Table: Australia - Main FTAs Signed Or Under Negotiations
27
Table: Sugar Production & Consumption (Australia 2013-2020)
28
Dairy Outlook
29
Table: Australia - Dairy Production And Consumption Outlook
30
Table: Risks To Outlook
30
Table: Australia Dairy - Recent Company Developments
35
Table: Dairy Production & Consumption (Australia 2013-2020)
36
Livestock Outlook
38
Table: Australia - Livestock Production And Consumption Outlook
39
Table: Australia - Risks To Livestock Outlook
40
Table: Livestock Production & Consumption (Australia, 2013-2020)
47
Commodities Price Analysis
48
Global - Global Commodities Strategy
48
Table: Select Commodities - Performance And BMI Forecasts
48
Featured Analysis
50
Cotton Production To Recover Despite Weak Chinese Demand
50
Table: Cotton Production & Growth (Australia, 2012-2020)
54
TPP - Agribusiness Winners And Losers
54
Table: TPP - Main Winners And Losers For Agriculture
56
Bright Export Outlook For Australia But Growing Challenges
60
Table: Production Balance (Australia 2010-2019)
64
Upstream Analysis
65
Asia GM Outlook
65
Table: Selected Countries - GM Crops Use (mn hectares)
68
Asia Fertiliser Outlook
70
Downstream Analysis
75
Food
75
Latest Updates
75
Structural Trends
76
Table: Food Sales (Australia 2013-2020)
77
Regional Overview
79
Table: Impact Of El Ni-o On Crops
79
Competitive Landscape
84
Table: Australia - Major Agribusiness Companies
84
Demographic Forecast
85
Table: Population Headline Indicators (Australia 1990-2025)
86
Table: Key Population Ratios (Australia 1990-2025)
86
Table: Urban/Rural Population & Life Expectancy (Australia 1990-2025)
87
Table: Population By Age Group (Australia 1990-2025)
87
Table: Population By Age Group % (Australia 1990-2025)
88
Methodology
90
Industry Forecast Methodology
90
Sector-Specific Methodology
91

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.