Driving Australia s Dairy Exports into Asia. 31 March 2016

Transcription

1 Driving Australia s Dairy Exports into Asia 31 March 2016

2 ASIAN MARKET IS HUGE AND GROWING Japan Global exports to Japan have tracked 10% higher than the same period 5 years ago 4 Asia-Pacific middle class Projected to rise from 525 million (2009) to 3.23 billion (2030) 1 Vietnam Projected dairy growth: 3.2%/yr for next 10 years 2 China Drinking milk consumption: 46 billion litres/yr (2012) 74 billion litres/yr (2030) 2 Dairy product consumption: 30 kg/yr (vs Australia s 300 kg/yr) 3 Indonesia Projected dairy growth: 3.3%/yr for next 10 years Dairy Australia, Trade and the Australian Dairy Industry, Dairy Australia, Dairy Situation and Outlook, February 2016

3 AUSTRALIAN DAIRY EXPORTS 2014/15 ($A million) Americas $108m (4%) Europe $19m (1%) Middle East $303m (10%) Other Asia $308m (10%) Greater China $424m (15%) Japan $483m (17%) Africa $44m (2%) South East Asia $1,022m (35%) NZ & Pacific $175m (6%)

4 AUSTRALIAN SHARE OF GLOBAL DAIRY TRADE Previous pressures: Deregulation > industry restructure Drought High AUD/weak USD Current Pressures: EU quota removal Russian import embargo US export increase (CWT)

5 AUSTRALIAN CONSUMPTION AND EXPORTS (MILK EQUIVALENTS)

6 HOW DO WE INCREASE MILK PRODUCTION & MAXIMISE EXPORT OPPORTUNITIES? Average product value Cost of revenue Processing & Distribution Costs Milk Price Processor Margin Farmer Margin STABLE DEMAND, FAIR MILK PRICE => INCREASE MILK PRODUCTION Increase Product Value Decrease Processing Cost Milk Production & Supply Costs Decrease Production Cost ILLUSTRATIVE COST OF REVENUE BREAKDOWN

7 WHAT THE IS INDUSTRY DOING TO ADD VALUE Change Product Focus High value Consumer-led Nutritionals Infant Formula Ingredients Fresh, ESL, UHT Yogurts, Ice-creams Serving size Sensory Packaging Adding Value Trade Barrier Reduction Brand Protection Smart Packaging Corporate Social Responsibility Food Safety Financial/Political Technical Anti-counterfeit Tamper-proof Traceable Flavor/freshness retention Sustainability Transparency Human & Animal Welfare Chinese, Korean, Japan FTAs Streamlined quarantine clearance Parallel testing procedures

8 WHAT THE IS INDUSTRY DOING TO DECREASE PROCESSING COSTS Modernize Infrastructure Investment Rationalize Built-for-purpose Both for large-scale export focused businesses & those supplying local niche market Decreasing Processing Costs Resource Recovery/ Waste Minimization Input Demand Reduction Landfill Waste Reduction Wastewater organics Yield Improvement Energy Reduction Water Reduction Energy Efficiency Renewable Energy (i.e. solar thermal) Fuel Switching CIP Optimization CIP reuse Condensate recovery Linked to Sustainability Framework targets Anaerobic digestion - BOD reduction & energy production

9 WHAT THE IS INDUSTRY DOING TO DECREASE PRODUCTION COSTS Animal Management Animal Health & Welfare Mastitis reduction Fertility Improvement Genetic Herd Optimization and Screening Dairy Futures CRC Decreasing Production Costs Pastures & Feeding Natural Resource Management & Climate Change Pasture Yield improvement Pasture Nutritive Value improvement Fertilizer reduction & management Energy use reduction Improved Run-off Management Climate change adaptation research Solar PV Milk cooling optimization DairySAT Energy Efficiency GENERAL TRENDS: Larger, more efficient farms Increased Tasmanian production Farm Business Management Industry-wide benchmarking & support Pasture Nutritive Value improvement DairyBASE

10 DAIRY AUSTRALIA SUPPORT ACROSS THE ENTIRE DAIRY VALUE CHAIN TRADE & STRATEGY - Trade agreement support - Market development, maintaining and opening markets - Global market insights - Dairy industry data support INDUSTRY PROMOTION SUSTAINABILITY - Sustainability Framework FOOD SAFETY & REGULATION ON-FARM -Animal management -Animal health & welfare, mastitis, fertility, genetics, milking, technologies & herd recording - Pastures and feeding: - Natural resource management and climate change - Farm Business Management LIBRARY AND KNOWLEDGE PEOPLE & SKILLS MANUFACTURING INNOVATION & SUSTAINABILITY -Technology transfer - Dairy Manufacturer s Sustainability Council -ARC Dairy Hub -Capability networks

11 SUMMARY Asian market is huge and growing Australia s traditional points of advantage have eroded as has market share Need to: Continue to improve efficiencies across entire value chain through thoughtful design, intelligent management and technological innovation Protect and promote our strengths in particular Brand Australia and continue to heavily emphasise food safety Remain sensitive to country specific consumer preference and business acumen Continue to focus on adding value and reducing costs Huge investment going on the sector and significant opportunities for innovation and expansion into Asian markets on the horizon