Food & Agribusiness Talking Points | 27/09/2016


In today’s talking points: Fonterra focus on investing in China with new state of the art cheese plant; Australia meets competition for China’s beef supplier of choice; Aussie Farming incubator programs; China’s pollution boost demand for Australian farming. 

Fonterra focus on investing in China with new state of the art cheese plant

Fonterra Australia have invested $141m into a new cheese plant on the back of the China Australia Free Trade Agreement. Fonterra Australia’s managing director has said there is focus on growing milk in developing markets like China. Dairy products like cheese are a major export to the Chinese market with strong demand in recent times. The dairy industry in Australia produces around 9.7bn litres of milk annually, with just under half of that amount exported. The company is hoping the new plant will help Fonterra Australia become the global hub for cheese production.

Source: Dairy Reporter

Australia meets competition for China’s beef supplier of choice

Given the renewed access to the Chinese market, US beef producers will now be in competition with Australian beef producers for China’s high end commodity market. Although Brazil has overtaken Australia as China’s top beef supplier, Brazil dominates the low end commodity market, whilst Australia produces for the higher end market. US beef has been banned in China since 2003 over concerns about ‘mad cow’ disease, however Li Keqiang has said that China will soon allow imports of US beef again. Any US gain in the Chinese market will most likely be at the expense of Australia’s market share.

Source: The Wall Street Journal

Aussie Farming incubator programs                                                      

Agricultural technology innovation boom saw increasing entrepreneurs and startups in Australia. Findex and the National Farmers’ Federation launched of a pre-accelerator program, part of a joint initiative called SproutX, which collect start-up ideas to nurture and commercialise the best ideas in food, fibre and agribusiness. A report written by KPMG Australia and supported by the Queensland Government and the Commonwealth Bank of Australia indicates that the agricultural sector is the largest employer in rural an d regional communities, and contributes to approximately 13% of Australia’s export revenue. Australia can set to become a leader in AgTech, primary producers can largely benefit from using technology, and the advancements in technology will also “change the skills and expertise needed in agriculture”.

Source: Huffington Post

China’s pollution boost demands for Australian farming                                                            

Due to increasing contamination of soil and waterways in China, increasing Australian land are demanded as Chinese citizens cope with the living in chronic and worsening pollution. This continues to pose challenges on food quality, meaning that China is turning to countries like Australia for solutions, especially because Australia has more than half of the world’s organic land and largest producer of organic food. The demand for Australian farming is becoming apparent, when Chinese investors purchased the 22,000 hectare Van Diemen’s Land Company in Tasmania and attempted to buy Kidman & Co properties in 2016.

Source: PHYS org