Innovation October 2016 WHY AUSTRALIA? As one of the worlds - - PowerPoint PPT Presentation

Australia: Livestock Farming Innovation

October 2016

WHY AUSTRALIA?

As one of the world’s leading agricultural producers, renowned for safe, healthy and high quality food, Australia is located close to markets in Asia that are driving growing global demand.

EMPLOYMENT, EXPENDITURE, EXPORTS AND TURNOVER

EMPLOYMENT

(PERSONS: FULL TIME & PART TIME)

298,945 213,065 TOTAL: 512,010 BUSINESS R&D EXPENDITURE

(A$ MILLION)

$205.537 $689.006 TOTAL: $894.543 EXPORTS

(A$ BILLION)

$21.441 $20.206 TOTAL: $41.647 TURNOVER

(A$ BILLION)

$73.392 $99.976 TOTAL: $173.368

6.1% GROWTH IN 12 MONTHS 8% GROWTH IN 12 MONTHS

Sources: EMPLOYMENT – ABS Catalogue 6291.0.55.003 Labour Force, Australia, August 2015. TURNOVER – ABS Catalogue 8155 Australian Industry 2013-2014, June 2015. R&D EXPENDITURE – ABS Catalogue 8104.0 Research and Experimental Development, Businesses, Australia 2013-2014. EXPORTS – Based on DFAT, Composition of Trade, Australia 2013-2014. Note: figures exclude forestry.

unprocessed processed

COMPOSITION OF AGRIBUSINESS EXPORTS

4 Source: Based on DFAT publication, Trade in Primary and Manufactured Products, Australia 2013-2014

TOP EXPORT DESTINATIONS FOR AUSTRALIAN AGRIBUSINESS PRODUCTS

5 Source: DFAT. Country and Commodity pivot table – FY2006 to FY2014

GROWTH OF THE MIDDLE CLASS (2009 VERSUS 2030 FORECAST)

6 Source: Kharas, H. 2010. Working Paper No 285: The emerging middle class in developing countries. OECD Development Centre

A SOPHISTICATED LOGISTICS NETWORK

7

AUSTRALIAN FARMLAND TOPS THE GLOBAL TABLE FOR INVESTMENT OPPORTUNITIES

8 Source: Savills Research, International Farmland Focus 2012.

A REPUTATION FOR SAFE, QUALITY FOOD

9

• Uses lowest amount of agricultural chemicals per

hectare in the world (2014 World Ranking: Food Safety Performance; Conference Board of Canada)

• World-leading regulatory standards and

quarantine policies

• Free of many pests and diseases, including BSE

and foot and mouth disease.

WORLD-CLASS R&D DELIVERS EXCELLENCE

10

• Broad deployment of high-quality technology
• Global best-practice farming techniques
• High degree of professionalism and technical

expertise.

Asia and the Pacific: comparison of FTAs in force Australia USA Canada EU NZ ASEAN

• Brunei
• Chile
• China
• Hong Kong
• Japan
• Korea
• Malaysia
• Singapore
• Thailand
• Trans-Pacific Partnership Agreement*
• FREE TRADE AGREEMENTS

11

*Negotiations concluded

OPPORTUNITIES BY SECTOR

• Clean and green image, disease-free status
• Individual, electronic traceability system

(NLIS)

• Comprehensive grading system (MSA)
• Efficient farm production methods
• Diversity of production regions and systems
• Low-cost land supports grass-fed production
• Innovation well supported by R&D

infrastructure

• Proximity to key Asian markets confers a

freight advantage in terms of cost and time to market

Total output 2,464,700 tonnes Volume of exports 1,732,100 tonnes Share of world trade 18% Output exported 75% Top three markets Japan, USA, China

SECTOR ATTRIBUTES AT A GLANCE

BEEF

13

• Investing in northern farm infrastructure to improve stocking rates
• Developing integrated supply chains through joint ventures to supply growing export

markets

• Commercialising processing and product technologies to improve cost-competitive

delivery

• Developing value-added meat exports based on grass-fed, organic and provenance

attributes

• Commercialising world-leading sensing and objective measurement technologies in

processing to improve cost-competitiveness of supply chains INVESTMENT OPPORTUNITIES

BEEF - OPPORTUNITIES

14

AUSTRALIA'S TOP FIVE BEEF MARKETS VERSUS COMPETITORS

15 Source: UN Comtrade (United Nations Commodity Trade Statistics Database). Accessed September 2015.

SECTOR ATTRIBUTES

• High food safety and biosecurity standards,

coupled with advanced product traceability systems

• Globally competitive, high-quality milk

production

• Regional diversity
• Well-developed and organised R&D sector

supporting primary and processing sectors

• Smaller-scale manufacturing facilities offering

agility and flexibility

• Produces a diverse range of functional, ready-

to-consume value-added products and ingredients

Total output 9.7 billion litres A$13 billion incl.farm, manufacturing & export Farmers Over 6000 Employees 40,000 Value of exports A$3.2 billion Share of world trade 7% Output exported 38% Top three markets China, Japan, Singapore

DAIRY

16

AT A GLANCE

AUSTRALIAN DAIRY IS….

• Leading rural industry in terms of adding value through downstream processing. Much of this

processing occurs close to farming areas

• Well-established industry across temperate and some subtropical areas of Australia.

While the bulk of milk production occurs in south-east states, all states have dairy industries that supply fresh drinking milk

• A range of high-quality consumer products, including fresh milks, custards, yogurts and a wide

variety of cheese types, are produced in most Australian states. The manufacturing of longer shelf life products, such as cheese and specialised milk powders, is becoming more concentrated in the south-east region of Australia.

• While supplementary feeding with grains is becoming increasingly common, the Australian dairy

industry remains predominantly pasture-based.

DAIRY

17 Presentation Title

• Australian manufacturers

capitalised on better returning cheese markets, at the expense of Whole Milk Powder production.

• Butter production is

increasingly consumed domestically, while liquid milk exports saw further growth.

• Export volume trends

(Tonnes): 816,944

• Total volume change: +7%
• Liquid milk (+21%)
• Cheese (+9%)
• WMP (–17%)
• Butter and blends (– 24%)

AUSTRALIA’S OUTLOOK OCTOBER 2016 EXPORT SIGNIFICANT PRODUCT SHIFTS

DAIRY OUTLOOK OCTOBER 2016 SOURCE: DAIRY AUSTRALIA

18

AUSTRALIAN DAIRY INDUSTRY LOCATIONS

19 Source: Dairy Australia, Dairy Industry in Focus 2014. Numbers may not add up to 100 due to rounding errors.

• Development and consolidation of dairy farms to improve productivity
• Developing dedicated supply chains offering milk-to-product specification and delivering

traceability

• Co-investment to combine cost-competitive primary production, leading processing technologies

and export market access

• Developing specialty products with existing manufacturers for high-value target markets
• Farmland investment for capital gain at prices that represent a relatively low barrier to entry

INVESTMENT OPPORTUNITIES

DAIRY - OPPORTUNITIES

20

• Animal health and welfare
• Precision livestock management
• Helping farmers breed better livestock

http://www.csiro.au/en/Research/AF/Areas/Animal-Science CSIRO

AUSTRALIA’S CAPABILITY IN ANIMAL SCIENCE

21

Australia’s national science agency Commonwealth Scientific and Industrial Research Organisation (CSIRO) is among the world’s most esteemed scientific institutions. It is:

• in the top 0.1% in agricultural sciences, plant and animal science, environment and

ecology, and geosciences

• In the top 1% of global research institutions in 15 of 22 research fields

• Breeding Hornless Cattle - A discovery by CSIRO scientists is central to the Australian

Poll Gene Marker test, which is helping Australian cattle breeders select the best breeding cattle for their herds. It may also help the industry end the painful practice of dehorning beef cattle.

• Measuring how farm animals “feel” - researching ways to improve the welfare of

livestock by developing scientific methods for assessing how animals 'feel' in response to common management practices.

• Improving conditions for livestock on the road - working with Australia’s farming

industries to ensure objective science underpins animal welfare standards for road transport practices. CSIRO

INNOVATION IN ANIMAL HEALTH AND WELFARE

22 Presentation Title

• Working to develop, test and demonstrate the latest thermal

remote sensing technology on an Unmanned Aerial Vehicle (UAV) to identify the location of livestock in extensive rangelands

• Image: Eagle quad-rotor helicopter UAV platform with a thermal imaging

camera attached.

LOCATING CATTLE WITH UNMANNED AERIAL VEHICLES

• CSIRO

INNOVATION IN PRECISION LIVESTOCK MANAGEMENT

23 Presentation Title

• Remote monitoring of cattle body condition through various imaging technologies has the

potential to improve the efficiency and cost effectiveness of livestock production systems

• LiDAR – "Light Detection And Ranging". LiDAR is a laser imaging technology that

measures three-dimensional structural data with millimetre to centimetre accuracy. It can generate a detailed 3D 'picture' of the animals shape and surface characteristics.

• 3D imaging using stereo vision. Similar in concept to human binocular vision, stereo

vision uses two cameras to obtain two images from which 3D shape information can be

• btained.
• Connected to the Digital Homestead project which brings together new technology and

information streams from both within the farm and external to it, in order to make better beef farm management decisions. MEASURING CATTLE BODY CONDITION REMOTELY - CSIRO

INNOVATION IN PRECISION LIVESTOCK MANAGEMENT

24 Presentation Title

• Combines digital technologies, web-based solutions,

wireless sensor networks (WSN) , data analytics and rural connectivity

• Collecting real-time data with cloud-based sensors

and wi-fi technology on: soil, pasture, cattle location, activity and weight, with external data on meteo, market pricing, etc.

• Improves productivity and profits of Australia’s

northern beef industry

• CSIRO, James Cook University, QLD Government

DAF – Department of Agriculture and Fisheries www.digitalhomestead.org THE DIGITAL HOMESTEAD PROJECT

INNOVATION IN PRECISION LIVESTOCK MANAGEMENT

25 Presentation Title

• The Precision Pastoral Management Tools is a research project run by the Cooperative

Research Centre for Remote Economic Participation that aims to improve the productivity and profitability of beef production by using advanced technologies to monitor and analyse the performance of individual cattle and pastures remotely.

• Aims to develop a commercial Precision Pastoral Management System (PPMS) based on

integrated modules that are compatible with existing software and hardware. The PPMS will integrate remotely collected, precision data on cattle and pasture performance, using minimal labour inputs.

• Technologies: remote monitoring, pasture modelling, mapping programs and management

software.

• This system will provide crucial information to producers, helping them to make decisions

regarding destocking, timing of restocking, and pastoral care PRECISION PASTORAL MANAGEMENT - CRC-REP

INNOVATION IN PRECISION LIVESTOCK MANAGEMENT

26 Presentation Title

• The eShepherd is a fenceless farming system,

called a “virtual fence”. It is a collar and an app that enables farmers to fence, move, or monitor their livestock using their smartphone – from anywhere, anytime.

• Each animal wears a GPS enabled collar

containing patented training software that trains the animal to move or stay with a boundary set up by the farmer.

• The system uses animal friendly patented

training software developed by the CSIRO: each animal is trained to respond to an audio sound that signals the fence boundary. VIRTUAL FENCING - AGERSENS

INNOVATION IN PRECISION LIVESTOCK MANAGEMENT

27 Presentation Title

• Plant gene technology can improve milk production by making more

energy available to a grazing cow.

• Research is changing the way a perennial ryegrass plant captures and

stores energy. Higher energy levels in the ryegrass result in more energy being used by grazing cows for milk production than in rumen digestion.

• High-energy ryegrass will deliver an increase of metabolisable energy

(ME) of around 1 energy unit, translating to higher milk production. Research modelling estimates it can increase farm productivity by at least $200 per hectare a year. HIGH-ENERGY RYEGRASS – DAIRY BIO

INNOVATION IN DAIRY DESIGNER FORAGES

28 Presentation Title

• MLA – Meat & Livestock

Australia - the industry representatives for the red meat industry www.mla.com.au

• Future Beef - to assist

graziers and the beef supply chain in northern Australia www.futurebeef.com.au

• Dairy Australia - the national

services body for the dairy industry www.dairyaustralia.com.au

• Dairy BIO - Creating a

positive future for the Australian dairy industry through transformational bioscience innovations www.dairybio.com.au

• CSIRO Animal Science

www.csiro.au/en/Research/A F/Areas/Animal-Science

• Australian Pork Ltd

www.australianpork.com.au

• Australian Chicken Meat

Federation www.chicken.org.au BEEF DAIRY LIVESTOCK FARMING

KEY AUSTRALIAN STAKEHOLDERS

29 Presentation Title

• Beef Australia, 6-12 May 2018,

Rockahmpton, QLD, www.Beefaustralia.com.au

• ACV/ARV Combined Conference, 4 - 7

April 2017,Sydney, NSW ava.com.au/cattle/events

• futurebeef.com.au/events/
• http://www.mla.com.au/News-and-

events/Events-and-workshops

• www.dairyaustralia.com.au/In

dustry-information/Dairy- events-calendar.aspx BEEF DAIRY

KEY EVENTS IN AUSTRALIA

30 Presentation Title

SUPPORT FOR INNOVATION, PRODUCT DEVELOPMENT AND TESTING

AUSTRALIA OFFERS

Strong protection of intellectual property, tax incentives and clear policy settings Access to the skills and capabilities needed for research and development An ideal test market for new product development.

WHY AUSTRALIA FOR AGRIBUSINESS INNOVATION

GOVERNMENT SUPPORT FOR INNOVATION

R&D TAX INCENTIVES

33

45% refundable tax

• ffset for eligible

companies 40% non-refundable tax offset for all other companies.

INNOVATION ECOSYSTEM

A COLLABORATIVE APPROACH TO R&D

34

Significant public research activity:

• CSIRO
• Cooperative Research Centres
• Rural R&D Corporations
• Centres of Excellence
• Universities.

Private and joint public/private initiatives that enhance productivity.

PRODUCT DEVELOPMENT AND TESTING

• Tap expertise including:

› Monash Universities’ Food Innovation Centre: established by Mondelez International, now supported by China’s largest food company COFCO. › CSIRO integrated sensory flavour and consumer research unit

AN IDEAL TEST MARKET FOR NEW FOOD PRODUCTS

35

Manage cost and risk Test products in a market that is:

• culturally diverse
• relatively small, with a

population of 24 million.

AUSTRALIA HAS THE RIGHT MIX

36

Geography Climate Regulatory, policy and market settings

RURAL RESEARCH AND DEVELOPMENT CORPORATIONS

37

There are 15 rural RDCs, of which 5 are statutory corporations or authorities, owned by the Commonwealth and established under legislation. The remainder are industry-owned, not-for-profit companies established in accordance with Australia’s corporations law and declared through regulation as the service providers to industry for specific activities. Each RDC is tasked with delivering tangible and practical improvements for their industries in terms of productivity and profitability, sustainability, and the community. They do this through strategic and targeted investments in and partnerships for research, development and adoption, and in some cases, market access, market development and promotion.

AUSTRALIAN RESEARCH COUNCIL (ARC) CENTRES OF EXCELLENCE

38

ARC Centres of Excellence are prestigious foci of expertise through which high-quality researchers maintain and develop Australia’s international standing in research areas of national priority. Each centre collaborates with partners from the university sector and other organisations around the globe, facilitating international knowledge transfer that greatly enhances their research

• utcomes.

Centres of Excellence are typically funded over a period of up to seven years, allowing them the flexibility to undertake comprehensive research programs that tackle big challenges.

COOPERATIVE RESEARCH CENTRES (CRC)

39

The CRC Program supports industry-led collaborations between industry, researchers and the community. Australia has more than 20 CRCs linking researchers with industry, in sectors as diverse as innovative manufacturing, cancer therapeutics, spatial information and plant biosecurity The CRC Program has two elements:

• CRCs, which undertake medium- to long-term, industry-

led and high-quality collaborative research.

• CRC Projects (CRC-Ps), which undertake a short-term,

industry-identified and industry-led collaborative research project. There are currently 33 CRCs commercializing leading-edge research taking place in Australian universities and research institutions.

INDUSTRY GROWTH CENTRES

40

The Australian Government has established six Industry Growth Centres, an industry-led approach to drive innovation, productivity and competitiveness in areas of competitive strength and strategic priority.

• Advanced manufacturing
• Cyber security
• Food and agribusiness
• Medical technologies and pharmaceuticals
• Mining equipment, technology and services
• Oil, gas and energy resources.

The initiative is ongoing, with A$248 million in Australian Government funding over four years beginning in 2015–16.

FIAL is a new industry-led, government-funded initiative working to accelerate commercially-driven collaboration and innovation in the Australian food industry. FIAL:

• fosters new collaborative partnerships
• translates research into positive outcomes
• establishes new trade and innovation relationships
• builds the quality and scale of the industry.

Food Innovation Australia Ltd (FIAL)

• CSIRO ON Accelerator and

Pre-Accelerator program is

• pen to research groups

within CSIRO, university research centres and other govt research institutes.

• Industry accelerator for Australian agriculture,

a series of commercialisation programs for entrepreneurs and startups to access support, mentors and capital

• Established by the National Farmers

Federation. CSIRO ON PROGRAM SPROUT-X

ACCELERATORS AND INNOVATION ECOSYSTEM

41 Presentation Title

CASE STUDIES

INNOVATION SNAPSHOT

AgriBio, Centre For AgriBioscience

AgriBio is a A$288 million world-class facility for agricultural biosciences research and development, and one of Australia’s premier biosciences locations. AgriBio brings together world-leading scientists in the fields of plant and animal biosciences, biosecurity and soil sciences. It is a joint initiative of the Victorian Government, through the Department of Primary Industries, and La Trobe University. AgriBio supports Victoria's A$11.6 billion agricultural sector through research to:

• improve productivity
• fight disease
• reduce environmental impact.

The centre has successfully increased dairy productivity using genetic technology and secured strategic partnerships with global grain companies to develop novel and adaptive germplasms.

INNOVATION SNAPSHOT

Longley Farm

British dairy company Longley Farm has invested more than A$100 million in a high-tech milk processing facility in Casino, New South Wales, developing a unique export business based on a patented 'fast-freeze' technology. Under local subsidiary Richmond Dairies, the company is exporting 10-kilogram blocks of high- quality frozen cream for use by premium ice-cream manufacturers, patisseries and bakeries in the Middle East, South West Asia and Japan. The plant also produces yoghurt concentrate and skim milk powder. The plant is located on the NSW north coast and is supplied with premium milk from Jersey cows, which is high in fat and cream.

INNOVATION SNAPSHOT

Charoen Pokphand Group (CP Group)

CP Group, Thailand's largest private company, is signalling its confidence in Australia's premium food brand in Asia by signing a Memorandum of Understanding (MoU) with Australia's largest family-owned meat processor, Thomas Foods International. The MoU is the first step ahead of the two companies establishing a joint venture to build an advanced food processing centre that will produce ready-made beef and lamb meals for export. The new production facility will be based in the northern suburbs of Adelaide. It will match Thomas Foods' supplier relationships and product credentials with CP Group's distribution network to prepare and package foods for distribution across Asia and the world.

INNOVATION SNAPSHOT

Chobani

New York yoghurt manufacturer, Chobani, was attracted to Australia by the availability of quality milk. Investing A$30 million in a new plant in Victoria, the company has tripled production capacity to over 30,000 tonnes of yogurt per annum. In 2013, Chobani chose Australia as the launch market for a range of yoghurts in a flexible plastic pouch. And in 2016, again in Australia, the company made its first foray into dips.

INNOVATION SNAPSHOT

JBS

One of the world’s largest meat companies, Brazil’s JBS has consistently expanded its Australian operations since entering the market in 2008. The company today stands as one of Australia’s top five agribusiness and food companies. As part of its expansion strategy, JBS’s local subsidiary in 2015 completed a A$1.45 billion acquisition of Australian Consolidated Food Holdings (Primo), Australia’s leading producer

• f ham, bacon and smallgoods.

Australia’s network of FTAs allows JBS Australia, now integrated from feedlotting to branded smallgoods, to competitively export high-value branded products to Asian markets, leveraging Australia’s logistical, technical and provenance credentials.

INNOVATION SNAPSHOT

CJ NutraCon

Korean firm, CJ NutraCon, invested in Australia because of our freedom from disease and reputation for food safety and quality. CJ NutraCon was looking for a BSE-free environment for manufacturing beef extract

• products. In 2006 CJ NutraCon constructed a A$27

million production facility in Queensland. Strict quarantine regulations are important to the company. “It is well known that Australia has a clean environment, and this is important for us to ensure

• ur products are fresh and of the best quality.”
• Mr Jay Jeong, CJ NutraCon

INNOVATION SNAPSHOT

Sense-T

Sense-T is a partnership program between the University of Tasmania, CSIRO, and Tasmanian Government. Sense-T is a world-first economy-wide intelligent sensor network that integrates different data sources. Through user-friendly applications drawing on real-time data, Sense-T assists producers to improve efficiency and productivity, reduce input costs, improve environmental sustainability and demonstrate food provenance and safety.

WANT TO LEARN MORE? Deborah Ponzio, Investment Manager Austrade Milano, Italy Deborah.Ponzio@austrade.Gov.Au WWW.AUSTRADE.GOV.AU