Australia’s grain industry is well positioned for ongoing prosperity according to a comprehensive report launched today by GrainGrowers at the Australian Grains Industry Conference (AGIC) in Melbourne.
State of the Australian Grains Industry: 2016 provides an independent exploration of the underlying factors driving the competitiveness of the Australia’s grains industry and looks at the changes to the industry since 2011 when GrainGrowers last published the report.
GrainGrowers Chief Executive Officer Alicia Garden said a positive key finding of the report was the strong financial position of most grain farm businesses.
Overall, Australian grain farm businesses are in good shape.
GrainGrowers CEO Alicia Garden
“Upscaling in hectares cultivated combined with a number of recent positive seasons across most of the Australian grainbelt, with the exception of parts of Victoria and Queensland, have seen grain farm businesses lead the way in farm business cash income when compared to other commodities.”
Ms Garden said grains was the largest and one of Australia’s most valuable agricultural commodity sectors.
“In 2014-2015 broadacre cropping directly contributed $13.9 billion to Australia’s national economy and that’s just farm gate value,” Ms Garden said.
As an export-focused industry the value of Australia’s grain exports are impacted by global grain prices, freight rates and currency fluctuations.
“In the past five years, positive terms of trade matched with innovative farm businesses have assisted export grain values to grow.
In 2010 grain exports were worth an average of $6 billion; this expanded to $11.5 billion in the five years to 2015.
GrainGrowers CEO Alicia Garden
Overall the State of the Australian Grains Industry Report provides a stocktake of how, in 2016, the sector is tracking in terms of on-farm productivity and profitability, supply chain operations and efficiency, research and innovation, government policy, trade and market access and end-market destinations.
The analysis reveals the recent growth in production with an average of 45 million tonnes of grain produced annually during 2010-2015.
This is up 21% on the 2000–05 annual five-year average production volume, and 33% on the 2005–10 average annual production.
"This past five years is on the back of what was a difficult decade, however value is back on track with the long term growth in the market and places production at record levels,” Ms Garden said.
Over its long history Australia’s grain industry has continued to transform itself in search of increased productivity and sustainability and in response to market demands.
“We have seen the Australian grains industry shift focus with changing world dynamics and growing demand in particular regions,” Ms Garden said.
“Ten years ago about 70% of grain exports were going to the Middle East, now about 70% of Australia’s grain exports go to Asia.
While China is a growing market for barley and sorghum, Indonesia continues to be the biggest market purchasing 20% of Australia’s wheat exports at a value of $1.2 billion.
GrainGrowers CEO Alicia Garden
On-farm Australian grain growers are refining their management of natural resources in the face of increased seasonal variability – including variations in growing season rainfall.
“To assist, the industry has have focussed on increasing water use efficiency (WUE),” Ms Garden said.
A five-year, $17.6m national initiative established in 2008 aimed to lift the WUE of grain-based production systems by 10% across Australia’s southern and western cropping regions.
“A key focus of the initiative was raising awareness of the importance of pre-crop practices such as weed control, stubble retention and minimum tillage in improving WUE.”
Structurally, the report confirmed that grain farming businesses are consolidating in number, with 30% less now than in 1990, and increasing in scale - on average 60% larger now than in 1990.
While State of the Australian Grains Industry: 2016 highlights a largely positive story of the Australian grains industry, it also calls on the industry to remain focussed on international competitiveness and to consider how to improve collaboration to continue growing in value.
“A lesson Australia can learn from its international competitors is how they undertake a coordinated whole-of-supply-chain approach to supporting the international presence and reputation of their grains.
“Co-ordinated market promotion and support is a function the Australian grains industry does not have and as an industry there needs to be an exploration as to how to better ensure international markets understand the quality of Australian grains.
“There is a real need to further connect market signals right through from international consumers to on-farm decision making.”
“Going forward, Australia’s grain industry must be focussed on innovation, grain quality and across supply-chain collaboration.
“These factors are even more important in times of soft global prices which the industry currently finds itself in," Ms Garden said.
Download the State of the Australian Grains Industry: 2016 report here
Note: The State of the Australian Grains Industry report was first published by GrainGrowers in 2011. The purpose of the Report was to review the industry post the deregulation of wheat export marketing and to outline the priority actions required to advance the interests of growers in an internationally competitive market. Five years on, the 2016 edition builds on the original report by reflecting on progress towards capturing the opportunities outlined in 2011 and identifying the challenges faced by Australia’s contemporary grains industry. Although developed by GrainGrowers, it is intended that the report be used industry wide, as a useful ready-reckoner to the great grains industry.
GrainGrowers is an independent and technically resourced, grain grower representative organisation with 17,500 members across Australia. GrainGrowers’ goal is a more efficient, sustainable and profitable grain production sector that benefits all Australia grain growers and the wider grains industry.