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Farmers see global demand as best opportunity

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New research conducted by Commonwealth Bank reveals farmers across Australia see overseas demand for Australian products as the number one opportunity for the agricultural industry.

The survey of 1,000 farmers across Australia revealed close to one in three farmers (32 per cent) consider overseas demand a significant opportunity, nearly one in four (24 per cent) see opportunities to scale up their farming business and more than one in five (22 per cent) think the creation of niche products presents a potential opportunity.

The top three opportunities identified in the survey are almost identical for farmers across the country, except in New South Wales, where Australia’s clean, green agricultural image is seen as a bigger opportunity than expanding farm operations; and in Victoria, where off-farm income and diversity outside of agriculture is seen as more important than demand for speciality products.

According to Geoff Wearne, Executive General Manager Regional and Agribusiness Banking, Commonwealth Bank, a whole-of-industry approach is required to establish connections between rural producers and overseas markets. 

Describing it as an exciting time for Australian agriculture, with growing opportunities in a number of markets, Mr Wearne observed that identifying these opportunities with the support of the whole industry is the first step to ensure Australian farmers can capitalise on them. 

He explains that access to finance and investment will be important in addition to building connections with potential customers in Indonesia, China and Japan, which offer particularly strong prospects for beef, grain, oilseed and cotton producers. He adds that achieving success in new markets will be about understanding the changing needs of the global customer and being prepared to meet them.

From an industry perspective, the dairy industry and large sheep operations see great prospects in overseas markets, with 47 per cent of respondents in each of those sectors naming overseas demand as the greatest opportunity.

According to Luke Mathews, Director Agri Commodities Strategy, Commonwealth Bank, changing diets in Asia is driving overseas demand for Australian produce. Mr Mathews commented that the westernisation of diets in emerging countries, in particular China, is creating new opportunities for both dairy and red meat producers. 

Other opportunities noted by Australian farmers include diversification outside farming operations, further education and technology and innovation.

The research also asked farmers to specify the most significant agricultural milestone in their lifetime. More than a third of respondents (34 per cent) nominated technology as the most significant milestone, including chemical and fertiliser developments, mechanisation and new varieties and breeds.

While farmers see plenty of opportunity for the future, they also note a number of challenges, with the cost of farm inputs emerging as the greatest challenge across the board. Nationally, more than half of the surveyed farmers (57 per cent) list input costs as an important challenge facing them today. Just over half of the respondents (51 per cent) are also concerned about low prices for outputs and over a third (40 per cent) find weather to be a big challenge.

When asked about the challenges they expected to deal with in five years, there was a considerable shift. Only 11 per cent mentioned the ageing population and lack of youth in agriculture as a current challenge, while 23 per cent think it will be a challenge in five years’ time.

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