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 enjoys great characteristics and will see its exports grow in the coming years, driven by the rise in production, its reputation as a reliable exporter of sage 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 which are weighting on the outlook for production, in the upstream dairy sector for example. Moreover, the country's vulnerability to extreme weather events will grow in the coming years with climate change, making agricultural production even more volatile. Finally, Australia has to face rising competition coming from lower-cost producers which aim at supplying the attractive markets in Asia and the Middle East.

Australia signed a number of trade deals with key importing countries, including the Trans Pacific Partnership, which will help its competitiveness remain satisfactory in some markets. Apart from maintaining its efforts to remain competitive in emerging markets, 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.

Agribusiness Market Value
BMI Market Value By Commodity (% of Total) (2012-2020)
e/f = BMI estimate/forecast. Source: FAO, BMI

Key Forecasts

  • Beef production growth to 2018/19: -13.1% to 2.2mn 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 as farmers rebuild their herds.

  • Milk production growth to 2018/19: 11.9% to 10.3mn 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 2019: 20.6% to 1.2mn 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 48kg in 2019, compared with 34kg back in 2005.

  • 2016 BMI universe agribusiness market value: USD44.23bn; up from USD43.87bn in 2015 ; growth expected to average 2.1% annually between 2016 and 2019.

  • 2016 real GDP growth: 2.3%; same than what we expect for 2015. Forecast to average 2.4% from 2016 to 2019.

  • 2016 consumer price index: 2.0% change y-o-y ave; up from 1.6% expected in 2015. Forecast to average 2.5% from 2016 to 2019.

  • 2016 central bank policy rate (average): 1.50%; down from 2.00% expected in 2015. Forecast to average 2.06% from 2016 to 2019.

Key Industry Developments

Amidst growing competition in the global agribusiness sector from lower-cost exporters, the various trade deals signed by Australia will prove beneficial for the future of its exports. Australia signed three free trade agreements, with South Korea, Japan and China in 2014 and 2015. Regarding the Australia-China FTA, which will come into force once the two countries complete their domestic treaty making processes, it will benefit the most the dairy and beef sectors. Wheat, sugar and rice were left out of the deal.

Australia is also part of the Trans-Pacific Partnership (TPP) trade deal, for which an agreement was found in October 2015. The TPP will have significant implications for the agriculture sector, as the deal will significantly liberalise trade for a number of bulk and value-added commodities that are currently limited by elevated tariffs and non-tariff obstacles. Rather than overall import demand increasing, we believe the TPP will lead to a redistribution of trade, with market share growing for TPP signatories at the expense of non-TPP members.

In terms of the agricultural sector, we believe Australia will be one of the main beneficiaries of the deal, along with the US and Canada. In 2014/15, 35% of Australia's agricultural exports were to TPP countries, with the main markets as the US, Japan, New Zealand and Vietnam. The outcome of the TPP for Australia will be particularly significant for beef and veal (which represented more than a third of TPP-bound trade in value terms for Australia), grains-oilseeds-pulses (13% of TPP-bound exports), sheep meat (7%), dairy products (7%) and wine (6%). The gains for sugar and other commodities will be more moderate.

Harvest of the ongoing 2015/16 grains crop is underway. The outlook for the season has deteriorated as many growing regions recorded drier and warmer weather than usual, probably linked to the re-emergence of El Nino in May 2015. We have revised down our wheat and barley production forecasts, but still expect output to grow on a y-o-y basis.

2014 and 2015 proved to booming years for Australia's livestock and dairy sectors and production reached record highs. The outlook for production in 2016 is less positive. Beef output will decline, as the cattle herd decreased significantly with the elevated slaughter rates and farmers will start rebuilding their herd. Dairy production growth will slow down significantly, due to lower prices and profitability and lower import demand from China and Russia.

BMI Industry View
7
SWOT
10
Agribusiness
10
Operational Risk
12
Industry Forecast
14
Grains Outlook
14
Table: Barley Production & Consumption (Australia 2014-2019)
15
Table: Corn Production & Consumption (Australia 2014-2019)
15
Table: Wheat Production & Consumption (Australia 2014-2019)
15
Table: Barley Production & Consumption (Australia 2009-2014)
21
Table: Corn Production & Consumption (Australia 2009-2014)
22
Table: Wheat Production & Consumption (Australia 2009-2014)
22
Sugar Outlook
23
Table: Sugar Production & Consumption (Australia 2014-2019)
24
Table: Australia - Main Ftas Signed Or Under Negotiations
28
Table: Sugar Production & Consumption (Australia 2009-2014)
29
Dairy Outlook
30
Table: Butter Production & Consumption (Australia 2014-2019)
31
Table: Cheese Production & Consumption (Australia 2014-2019)
31
Table: Milk Production & Consumption (Australia 2014-2019)
32
Table: Whole Milk Powder Production & Consumption (Australia 2014-2019)
32
Table: Australia Dairy - Recent Company Developments
37
Table: Butter Production & Consumption (Australia 2009-2014)
37
Table: Cheese Production & Consumption (Australia 2009-2014)
38
Table: Milk Production & Consumption (Australia 2009-2014)
38
Table: Whole Milk Powder Production & Consumption (Australia 2009-2014)
38
Livestock Outlook
39
Table: Beef Production & Consumption (Australia 2014-2019)
40
Table: Pork Production & Consumption (Australia 2014-2019)
41
Table: Poultry Production & Consumption (Australia 2014-2019)
41
Table: Beef Production & Consumption (Australia 2009-2014)
47
Table: Pork Production & Consumption (Australia 2009-2014)
48
Table: Poultry Production & Consumption (Australia 2009-2014)
48
Featured Analysis
49
Australia China FTA: Beef, Dairy To Benefit, Wheat Missing Out
49
Table: Australia - China Free Trade Agreement - Details For The Commodities Sector
49
Commodities Price Analysis
55
Monthly Softs Update
55
Monthly Grains Update
60
Upstream Analysis
64
Asia GM Outlook
64
Table: Selected Countries - GM Crops Use
66
Asia Machinery Outlook
67
Table: Select Countries - Average Size Of Farms, Hectares
71
Downstream Analysis
75
Mass Grocery Retail
75
Table: Mass Grocery Retail Sales By Format - Historical Data & Forecasts (Australia 2014-2019)
76
Drink
77
Alcoholic Drinks
77
Table: Alcoholic Drinks Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Australia 2014-2019)
78
Hot Drinks
79
Table: Hot Drink Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Australia 2014-2019)
80
Soft Drinks
81
Table: Soft Drinks Sales, Production & Trade (Australia 2014-2019)
81
Food
83
Food Consumption
83
Table: Food Consumption Indicators - Historical Data & Forecasts (Australia 2012-2019)
84
Confectionery
84
Table: Confectionery Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Australia 2012-2019)
86
Canned Food
87
Regional Overview
88
Table: Impact Of El Ni-o On Crops
92
Competitive Landscape
94
Table: Australia - Major Agribusiness Companies
94
Demographic Forecast
95
Table: Population Headline Indicators (Australia 1990-2025)
96
Table: Key Population Ratios (Australia 1990-2025)
96
Table: Urban/Rural Population & Life Expectancy (Australia 1990-2025)
97
Table: Population By Age Group (Australia 1990-2025)
97
Table: Population By Age Group % (Australia 1990-2025)
98
Methodology
100
Industry Forecast Methodology
100
Sector-Specific Methodology
101

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.