We are living in ‘The Asian Century’, which provides a huge opportunity for large-scale Australian farmers and food processing plants to position their businesses to satisfy the ever-growing Asian middle class’s new tastes in food and produce.
While many Asian nations once had a largely plant-based diet devoid of meaningful quantities of protein such as meat, that’s all changed. Now, Asian consumers are eating more meat – and Australian produce – than ever before.
According to the National Farmers’ Federation’s (NFF’s) 2015/2016 annual report, by the 2020/21 financial year, the value of Australian farm exports is predicted to grow to $45.3 billion. This represents an 11 per cent rise compared to the $40.7 billion in export sales which the food sector achieved last financial year.
China is our top export partner for farm sector goods, with $8.6 billion in farm exports sent last year. The US is our second top farm sector export destination, followed by Japan, Indonesia and South Korea.
In Australia, there are around 129,000 farm businesses, 12.9 per cent which operate under a corporate structure and over 14,000 food processing and manufacturing plants. Australian farms produce enough food for about 61 million people – 23 million people at home and 38 million people overseas.
These figures are expected to rise substantially in the near future. According to the NFF the value of goods produced by the farming sector is expected to reach $60.3 billion in the current financial year, with 60 per cent expected to be exported.
According to the Business Characteristics Survey, over 50 per cent of large food manufacturers were intending to provide new and/or improved goods and services. The same was reported for large farm and agriculture businesses which saw a further 50 per cent intending to do the same. To meet demand and to be profitable, this will require substantial new investment in plant and equipment.
The question is how to fund these opportunities, particularly if you’re a growing company and not yet exporting to Asia.