MISP 2020

24 August 2015

WE WENT TO INDUSTRY, AND WE WERE TOLD…

• “There are too many strategic plans”– We need fewer, larger & more collaborative investments

• “It’s too hard to gauge industry and/or organisational performance”– We need objective, transparent and periodic reporting

• “The industry is fragmented in its operations”– We need stronger leadership and better co-ordination between

organisations and sectors• “We need results” (level and relevance)

– We need inclusive consultation avenues and robust economic analysis (and performance)

WE WENT TO INDUSTRY, AND WE WERE TOLD…

• “There are too many strategic plans”– We need fewer, larger & more collaborative investments

• “It’s too hard to gauge industry and/or organisational performance”– We need objective, transparent and periodic reporting

• “The industry is fragmented in its operations”– We need stronger leadership and better co-ordination between

organisations and sectors• “We need results” (level and relevance)

– We need inclusive consultation avenues and robust economic analysis (and performance)

MISP3Review

Scene setting & planning

workshops Co

nsul

tatio

n

Disti

llatio

n &

pr

ioriti

satio

n

KPI

deve

lopm

ent

and

testi

ng

Impl

emen

tatio

n Pl

an MISP2020

JUNE 2013 JUNE 2015

MISP2020 DEVELOPMENT PROCESS

MISP4 DEVELOPMENT PROCESS• Widespread consultation

– 550 stakeholders (investors, levy payers, government, representative bodies, community groups, researchers, consultants, etc)

• Comprehensive economic modelling– Complete economic analysis on 2020 and 2030 horizons, recommended

budgets, quantification and distribution of income to and within industry• Robust monitoring, evaluation and reporting (MER)

– Clear definition of outcomes sought and associated KPIs– Upfront definition of MER framework, individual responsibilities and

annual reporting and review schedule• Systematic integration with supply chain plans (BISP and SISP)

– Ownership at sector level, linked ‘component’ KPIs

MISP / ISP STRUCTUREMISP*

MLA AMPC LiveCorp

CCA

SCA

ALFA

AMIC ALEC

GICA

RMAC

POLICY / ADVOCACY SERVICE DELIVERY

BISP

SISP

GISP

Productionsector

Processingsector

Live export sector

*PICs and Service Companies have formal obligations to deliver MISP under the MoU

MISP / ISP STRUCTUREMISP

MLA AMPC LiveCorp

CCA

SCA

ALFA

AMIC ALEC

GICA

RMAC

POLICY / ADVOCACY SERVICE DELIVERY

BISP

SISP

GISP

Productionsector

Processingsector

Live export sector

• Comprehensive definition and quantification of the industry’s priorities (“what to do”)– Clearly identifies the biggest payoffs (“upside opportunities / downside risks” for

the red meat and livestock industry • (Close to) full integration of plans

– Component / contributing KPIs (“logframe”)• Formality and flexibility in reporting

– Sector-by-sector– Supply chain / species– Whole-of-industry

• Retains autonomy for sector-specific pursuits• Supports co-ordinated delivery of industry’s policy, R&D and marketing

priorities • Foster whole-of-supply-chain (value chain) approach to industry issues

WHAT WE’RE LOOKING ATVIEW TO 2030

• Solid growth in population and GDP– 21% more people with 38% more per capita (real) GDP – $US will appreciate against most currencies;

• But global growth in meat consumption largely from pork and poultry

• Competitors are on the move – US will almost match our beef exports– Brazil & India will each double our beef export volumes

THE VIEW TO 2030OUTLOOK (1)

• Capitalising on beef / cattle opportunities will be challenging:– 2014 cattle herd (and production levels) unlikely to be rebuilt

until 2030• Sheepmeat outlook is promising– Moderation in NZ sheepmeat production (dairy conversions)– Growth in live export markets as flock numbers build

THE VIEW TO 2030OUTLOOK (2)

ECONOMIC ANALYSISIMPACT MECHANISMS

• Two possible outcomes:– Change in supply:

• % reduction in costs; or,• ↑ output for same cost

– Change in demand: • % increase in demand; or,• ↑ prices paid by

customers

2015 20302020

RELA

TIVE

CHA

NGE

Baseline industry profitability to grow in nominal terms and remain flat in real terms.

THE VIEW TO 2030BASELINE GROWTH

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2021-22

2022-23

2023-24

2024-25

2025-26

2026-27

2027-28

2028-29

2029-304000

4500

5000

5500

6000

6500

7000

FORECAST BASELINE GROWTH IN NET INDUSTRY INCOME*

Nominal terms Real terms

$m

BRINGING IT ALL TOGETHER

VALUE OF MISP2020 – NET INCOMEBASELINE

($m)

DOWNSIDERISK

($m*)

UPSIDEOPPORTUNITY

($m*)

NET MISP BENEFITS

PILLAR $m* BCR

CONSUMER & COMMUNITY SUPPORT 48,320 -3,898 220 4,118 13.4

MARKET GROWTH &DIVERSIFICATION 48,320 -227 2,966 3,192 5.4

SUPPLY CHAIN INTEGRITY & EFFICIENCY 48,320 -2,086 1,361 3,447 6.4

PRODUCTIVITY & PROFITABILITY 48,320 0 2,113 2,113 6.9

TOTAL PLAN 48,320 -6,211 6,660 12,871 7.4

*Changes in net industry income relative to the baseline increase of $48,320m by 2030 (in 2015 dollars and at a 5% real rate of return)

KEY MESSAGES• Productivity levels reman the industry’s biggest challenge in

terms of global competiveness– But productivity can’t be at the expense of quality– And Australia’s cost structures and resources bases will realistically mean

we will never be the most competitive• Erosion of community support for our industry is a major

downside risk to industry viability and longevity• Industry requires effective and efficient influence with

government• Australia’s biggest competitive advantage is its integrity systems

(including quality, safety, ethics, etc)– But integrity can’t be at the expense of productivity

MISP ARCHITECTURE

PROGRAMS AND PROJECTS

STRA

TEGY

IMPL

EMEN

TATI

ON CO-INVESTMENT AND IMPLEMENTATION PLAN/S

SERVICE COMPANY OPERATING PLANS (3-5 YEAR)

CO-INVESTOR PLANS AND CONSORTIA

“WHA

T”“H

OW

”

“WHO

”

MONITORING, EVALUATION &

REPORTING

REPORT CARDTO INDUSTRY

NOVEMBER

JANUARY

INTERNALPORTFOLIO

REVIEW

APRIL

CONSULTATION AND PORTFOLIO(RE)ALIGNMENT

JUNE

SFA – MISPPERFORMANCE

REVIEW

PLANNING & REPORTING• MISP must be dynamic

– Periodically checked and (re)aligned with the operating environment

• Synergies and efficiencies with co-ordinated reporting and planning – Can be integrated with sector-specific

consultation, SFA reporting, etc– Underpins transparency and accountability – Engenders collaboration

• Centred on an annual “report card to industry” – Coincides with AGMs and conferences– Could be positioned as the showcase event for

the red meat and livestock industry

MONITORING AND EVALUATION• Focus aligned with MISP architecture

– Pillars and Priorities: “industry scorecard”– Imperatives: key programs

• Responsibilities assigned for both developing and monitoring KPIs – Specific roles across industry structures– Service Company input and expertise will be key

• Year 1 of the strategy will require a “continuous improvement” approach– MISP will identify (a) KPIs at the Pillar and Priority level and (b) necessary

outputs / outcomes at the Imperative level– PICs and Service Companies will be responsible for developing Imperative

KPIs. Monitoring these will be the domain of PICs. – Service Companies will be required to identify and/or quantify baseline

data. They will have an on-going role in collecting this information.

QUESTIONS?

END