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19 July 2007

Niche markets key to beef export success, according to Westpac's Future Leaders Forum

Australian beef producers who focus on niche markets will be best placed to counter the threat of Brazil's powerhouse agricultural economy and increased competition exporting to and within North Asian markets, according to Westpac's Senior Agribusiness economist Justin Smirk.

Speaking at Westpac's first Future Leaders Forum for the beef industry, Mr Smirk said that local producers should look to establish quality brands and high-value meat products to maintain a competitive edge in export markets.

"Local producers should be prepared for China to be an increasingly aggressive market," Mr Smirk said.

"Given the potential scale of the Chinese beef market, local operators will try to compete with established export nations like Australia by supplying their own market. Australian producers should aim to capitalise on their experience as quality producers rather than compete in bulk industry.

"The advantage for Australian producers is that, while China is a labour-rich nation, it is also land-poor with less agricultural property available than many developed nations. Since China cannot increase fodder production to meet demand, it will be forced to import its grain."

Mr Smirk added while the Australian beef industry was in a strong position, the threat to local producers from South American nations such as Brazil could impact on future performance.

"Brazil is still in the early stages of development and its progress remains uncertain, but with access to vast water resources and fertile soils, it needs to be considered as a looming competitor to Australian producers, especially once it resolves its disease problems, increases production and invests in infrastructure to meet its expected potential," Mr Smirk added.

Also on the positive, Brazil's agricultural sector is multi faceted industry and this may benefit Australian producers, as Brazilian grain production may provide the supply increase to offset rising grain demand for intensive livestock production and ethanol.

"In this way, Brazil's grain and legume exports may act as a buffer for international fodder prices," Mr Smirk concluded.

Westpac's Future Leaders Forum has brought together a range of sector specialists, from government, industry, genetics, economics and fellow producers to address Australia's emerging agricultural leaders on the issues affecting future business performance.

Westpac's General Manager Regional and Agribusiness Banking, Graham Jennings, said the Future Leaders Forum had provided a valuable opportunity for farmers to take stock of the mega-trends affecting the agribusiness sector, with water rights, land management and staff retention all high on the agenda.

"The Future Leaders Forum has been an exciting addition to the range of services and industry insights that Westpac offers our Agribusiness customers," Mr Jennings said.

"The two day event has stimulated a lot of discussion among the attendees and Westpac staff about how we can work better together in the future. I look forward to hearing from the individual farmers about how they plan to capitalise on opportunities, and also deal with challenges they face over the coming months."

With more than 450 staff in Regional and Agribusiness banking across Australia, including 150 experienced and passionate Agribusiness specialists, Westpac is committed to helping deliver long and short term solutions for its rural and regional customers.

For more information on Westpac's products and services for agribusiness owners talk to your local Westpac Agribusiness Banker or call 1300 134 979.