livestock opportunities in south australia · 80% exported to china, asia and middle east 62% of...
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LIVESTOCK OPPORTUNITIES IN SOUTH AUSTRALIA
20% of Australia’s grain produce 7 million tonne average grain production per year with
80% exported to China, Asia and Middle East
62% of Australia’s wine exports Premium wine growing regions with exports to UK,
North America and emerging markets in China and Asia
Premium livestock producer Beef, lamb, dairy, pigs, poultry, wool – exports to Japan,
China, US, UK, Europe, other Asia
Australia’s premium seafood Tuna, rock lobster, abalone, prawns and kingfish from
the pristine Southern Ocean exporting to Japan, Hong
Kong, other Asia
Leading horticulture production Potatoes, tomatoes, capsicums, mushrooms, almonds,
citrus – including world-leading greenhouse and water
technologies
Australia’s first commercial forestry 200,000 hectares of softwood and hardwood plantations
– exports to Japan and others
World leading R&D and education University of Adelaide/Waite Institute, South Australian
Research & Development Institute, Australian Wine
Research Institute
PREMIUM FOOD AND WINE FROM OUR CLEAN ENVIRONMENT
Agriculture is South Australia’s most significant industry, worth over $16 billion
annually and supplying premium food and wine to the world.
2
Source: PIRSA, ABARES
LIVESTOCK ADVANTAGE AND OPPORTUNITY IN SOUTH AUSTRALIA
South Australia can help to meet growing global demand for protein with high
quality livestock product from an environment of natural advantages.
Superior animal welfare standards High industry standards coupled with compliance and
traceability systems
Existing skills, education programs Existing industry skills, technology and management. World class science
programs. First rate training and education providers.
Export logistics advantages Close proximity to high growth and emerging markets of
China and Asia
Internationally recognised food safety record Food safety standards ensure quality, reliability and differentiation
Premium livestock health status Healthy livestock produce a safe and superior product
3
Source: FAO, OECD, MLA, Rabobank
Australia
exported a record
1 million tonnes
of beef and veal
in 2013.
China’s red meat
imports surged in
2013 to 543,105
tonnes. Of this,
48% was supplied
by Australia
GLOBAL DEMAND DRIVING OPPORTUNITY
The value of Australian livestock product exports is forecast to increase
by 11.9% in 2013-2014 to $16.7B to assist in meeting increased global
demand for protein.
4
50000
100000
150000
200000
250000
300000
350000
400000
1980 1990 2000 2010 2020 2030
1,0
00 t
onnes
Year
Global Meat Demand Growth Estimates 2010-2030
Beef Pork Poultry Sheep meat
+32%
+33%
+24%
+22%
+19%
Source: PIRSA
Sheep – Meat and Wool 11 million sheep in SA
Pig Meat 91,500 tonnes of pig meat processed
Poultry – Meat and Eggs 86 million chickens and 11.5 million dozen
eggs produced and processed
Rangeland Meat Major processor of kangaroo, goat and
camel meat
Cattle – Beef and Dairy 115,000 tonnes of beef processed and 565
million litres of milk produced
SOUTH AUSTRALIA LIVESTOCK PRODUCTION AND PROCESSING
South Australia is a significant producer of livestock products. Meat, milk,
wool and eggs account for more than 25% of the value of all food
produced in the state.
5
Source: PIRSA, OECD, FAO (2013)
Product Number
(head)
Farm gate
value
Numbers
processed
Volume
processed
Processin
g value
Current export
markets
Emerging
export markets
Beef 1.2 million $454.5
million 420,000
115,000
tonnes $454 million
Japan, USA,
Korea
China, South
Asia, Middle
East
Mutton 11 million $401 million 4.9 million
121,000
tonnes $585 million
China,
Singapore, USA Middle East
Lamb USA, China, UK China, USA
Wool &
skins 52,500 kg $405 million n/a
10,000
tonnes $60 million
China, Korea,
India
China, Korea,
India
Chicken 86 million $215 million 86 million 154,000
tonnes $499 million
Taiwan, PNG,
Hong Kong China
Eggs 11.5 million
doz. $14 million
11.5 million
doz.
11.5 million
doz. $29 million n/a n/a
Pigs 791,000 $170 million 1.2 million 91,500
tonnes $366 million
Singapore, New
Zealand, Hong
Kong
Asia - China,
Indonesia
Goat n/a $13 million 380,200 6,000 tonnes $24 million USA, Trinidad &
Tobago, Canada
Middle East, HK,
Taiwan, China
Kangaroo &
Camel n/a n/a
600,000
kangaroo
16,000 camel
n/a n/a
Russia, PNG,
Netherlands,
Saudi Arabia,
Morocco
USA, Asia -
China
SOUTH AUSTRALIAN LIVESTOCK PROFILE
South Australia is a leading producer and processor of premium meat
and other livestock products.
6
Source: PIRSA, SARDI
ADVANTAGES GENERATING PREMIUM LIVESTOCK PRODUCTS
• The livestock industry supplies a premium product reflecting southern
Australia’s natural advantages in, climate, land availability, feed and
advanced genetics.
• This is driven by effective food safety regulations, traceability, and a
focus on animal husbandry, farm management and welfare.
Genetics
World class, progressive
livestock breeding and
genetics programs that:
• Maximise production
• Maximise quality traits
• Enhance breeding
efficiency
• Ensure product quality
• Includes premium
British beef breeds
Prime livestock regions
with ideal climate and
average annual
rainfalls suitable for
successful production
Land suited to low
impact grazing and
fodder production that
occurs in close
proximity to processing
facilities, other
infrastructure and
markets.
Climate Land
Naturally occurring
pastures coupled with
reliable cereal, legume
and export quality hay
regions in and around
livestock areas.
Feed
7
Source: PIRSA, OECD, FAO (2013); Graphs depict meat exports
There is opportunity:
• to further investigate a flexible service kill
abattoir for short runs in South Australia
• for investigating joint arrangements with,
or acquisition of existing service kill
abattoirs
30000
35000
40000
45000
50000
55000
60000
2012 2013 2014 2015 2016 2017 2018 2019 2020
Red meat consumption (kt) Developing Countries
Red meat consumption (kt) Developed Countries
Forecast Global Red Meat Consumption
USA
China
UK
Japan
Canada
OtherLamb $303 million
China
Singapore
USA
UK
Malaysia
OtherMutton $71m
USA
Trinidad & Tobago
Canada
UAE
Jordan
OtherGoat meat $21m
EXPAND THE COMMISSION PROCESSING CAPACITY
South Australia is a leading processor of premium meat and other
livestock products. High value markets are well established for many
products and niche and emerging markets are growing.
8
Source: PIRSA, OECD, FAO
There is opportunity:
• to invest in farm expansion as
processors continue to contract new
farms to satisfy rising Australian demand
• to invest in a major company’s ‘sale and
lease-back’ of production and processing
assets
100000
105000
110000
115000
120000
125000
130000
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Forecast Global Poultry Meat Consumption
Poultry meat (rtc) consumption kt (rtc)
20
30
40
50
60
70
80
90
100
03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13
mill
ion
s
Year
Chickens processed annually in SA
Capital cost $7.5 million
Projected revenue $1,774,080
Variable costs $580,000
Fixed costs (including
depreciation) $500,000
Shed area (10 sheds) 25,800m2
Birds per year 2,365,440
Poultry meat farm model
INVEST IN CHICKEN MEAT PRODUCTION IN SOUTH AUSTRALIA
Global demand for chicken meat is rising quickly. Over the past decade
the South Australian chicken meat industry has grown faster than any
other state in Australia.
9
Source: EconSearch, PIRSA, OECD, FAO (2013)
There is opportunity:
• to increase the
productivity of beef
and sheep
production through
purchase, lease or
development of feed
lots
• to increase
productivity of beef
and sheep
production through
better techniques in
pasture utilisation
300
350
400
450
500
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Forecast sheep meat exports (kilotonnes)
1200
1250
1300
1350
1400
1450
1500
1550
1600
1650
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Forecast beef and veal exports (kilotonnes)
Small
Feedlot
Medium
Feedlot
Capital cost
Land, water and
infrastructure
$8.1 million $22.7 million
Projected revenue $22.3 million $66.9 million
Operating costs $20.0 million $59.4 million
Overheads
(including
depreciation)
$0.8 million $2.2 million
Capacity 5,000 head 15,000 head
Capacity
unitisation 90% 90%
Average days on
feed (max=100) 70 70
Annual cattle
throughput 23,500 head 70,400 head
Feedlot investment models
INCREASE THE PRODUCTIVITY OF BEEF AND SHEEP PRODUCTION
South Australia is a leader in beef and sheep production and continues
to pursue new and improved practices
10
Source: PIRSA
ASIAN EXPORT FREIGHT ADVANTAGE
South Australia has a natural logistical advantage for exports into China
and Asia.
11
Industry Support
South Australian Livestock
organisations and members
actively support and develop
the industry in South
Australia. Foreign investment
is welcomed as a key
mechanism to support
industry growth.
Key industry organisations:
• Livestock SA
• Pork SA
• SA Chicken Meat Council
• SA Egg Farmers’
Association
Government Support
The South Australian
Government supports
investors throughout the
investment process via a
Case Management approach.
Government agencies
involved include:
• Primary Industries and
Regions South Australia
• Invest South Australia
• Department of State
Development
Low Costs
Ranked one of the lowest
cost states in Australia for
business and living.
Adelaide is also ranked the
most liveable and safest city
in Australia, and the 5th most
liveable city in the world.
Average wages are 10%
lower than eastern states,
and 20% lower than WA.
Infrastructure
Adelaide and South Australia
are at the centre of
Australia’s air, road and rail
transport links.
Strategic proximity to Asia
supported with a number of
ports, including Port
Adelaide.
Natural resources (minerals,
energy, water) and world
leading technology.
Food Safety Standards and Export Regulations
Food Safety Standards
South Australia is recognised internationally for its quality of food
safety standards and processes, ensuring strong differentiation in
international markets.
Producers and processors in South Australia adhere to the national
guidelines under Food Standards Australia & New Zealand.
Export Regulations
Biosecurity and approvals for exports are coordinated by AQIS.
Once a food safety plan and systems are in place, accreditation
and exporting is expedient.
SUPPORT TO INVEST IN SOUTH AUSTRALIAN LIVESTOCK
South Australia has a range of initiatives and advantages to support new
investment into the State, including low costs and existing infrastructure
in key livestock regions.
12
Source: PIRSA
Service kill abattoir:
• to further investigate a flexible service kill abattoir for short
runs in South Australia
• for investigating joint arrangements with, or acquisition of
existing service kill abattoirs
Chicken meat farms:
• to invest in farm expansion as processors continue to contract
new farms to satisfy rising Australian demand
• to invest in a major company’s ‘sale and lease-back’ of
production and processing assets
Beef and sheep production:
• to increase the productivity of beef and sheep production
through purchase, lease or development of feed lots
• to increase productivity of beef and sheep production through
better techniques in pasture utilisation
LIVESTOCK OPPORTUNITIES IN SOUTH AUSTRALIA
13
Minerals &
Energy
Agriculture Renewable
Energy
Advanced
Manufacturing
Defence Education Health
DIVERSE INDUSTRY BASE
KEY LOCATION FOR SUSTAINABLE BUSINESS
Source: EIU: A Summary of Liveability Ranking and Overview August 2012
THE STATE OF SOUTH AUSTRALIA AT A GLANCE
Industry highlights
• 7% of Australia’s population
• 81% of Australia’s uranium reserves
• 69% of Australia’s copper resources
• 62% of Australia’s wine exports
• 38% of Australia’s wind power capacity
• 32% of Australia’s defence industry
• 20% of Australia’s grain production
• Largest most mature onshore hydrocarbon
province
• World class education, R&D and health systems
• Adelaide ranked 5th most liveable city in the
world State population
Adelaide population
1.6 million
1.2 million
14
15
Published July 2014
The information contained in this presentation has been compiled by the Department of State Development (DSD) and Primary Industries & Regions South Australia
(PIRSA) and originates from a variety of sources. Although all reasonable care has been taken in the preparation and compilation of the information, it has been provided
in good faith for general information only and does not purport to be professional advice. No warranty, express or implied, is given as to the completeness, correctness,
accuracy, reliability or currency of the materials. Facts, illustrations and information should not be relied upon and readers should seek their own professional advice and
due diligence prior to making any investment decision.
DSD, PIRSA and the Crown in the right of the State of South Australia does not accept responsibility for and will not be held liable to any recipient of the information for
any loss or damage however caused (including negligence) which may be directly or indirectly suffered as a consequence of use of these materials. DSD and PIRSA
reserves the right to update, amend or supplement the information from time to time at its discretion.
This document has been prepared with the assistance of Rural Solutions SA, a division of PIRSA.
Photographs throughout document
reproduced courtesy of PIRSA, Australian
Chicken Meat Federation and South
Australian Tourism Commission.
Developed in association with
Livestock SA
Justin Ross
Director
Agriculture, Food and Wine
Primary Industries and Regions SA
T: +61 8 8226 8157
Michael Blake
Meat and Livestock Account Manager
Agriculture, Food and Wine
Primary Industries and Regions SA
T: +61 8 8226 0714
Deane Crabb
Executive Officer
Livestock SA
T: +61 8 8297 2299
CONTACT DETAILS Invest in South Australia
The Conservatory
131-139 Grenfell Street
Adelaide 5000
South Australia
T: +61 8 8303 2419
www.invest.sa.gov.au
Primary Industries and Regions South Australia
Level 14, Grenfell Centre
25 Grenfell Street
Adelaide 5000
South Australia
T: +61 8 8226 0900
www.pir.sa.gov.au