The growth in Ag will come from where?

By: "Farm Tender" News
Agribusiness News
Apr 01, 2019
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This article is bought to you by Prime Monthly Member (PMM).

By Dwain Duxson - Farm Tender & DelayPay.

This article was extracted from the Farm Tender weekly newsletter.

We keep saying, but we do believe that Ag is in an exciting space right now, put the drought aside and look a bit more medium to long-term and things look pretty good. Why? Because of what's happening in the food and fibre space. In other words, the trend in food and fibre will drive the growth in Ag, not the other way round. You could argue that's always been the case, but as we move further away from a commodity mindset, then amazing opportunities will open up.

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Just look at Lamb and Wool, these are two very good industries to be in right now and still pretty commoditised. Let's start with Lamb which has been good for some time. Why? Because it's turned itself into a high-end product, especially in other countries outside Australia, it's eaten on special occasions only, not all the time and people are prepared to pay for it. Mutton is trending that way also.

Wool, all those years of talking about it being a wonderful natural fibre have done some good. Now, finally it's recognised as a luxury fibre by the world, and now people are starting to pay for it. And the best thing about the Sheep industry is that Wool, Mutton and Lamb are all competing against each other. The fact that we haven't been able to grow the flock has helped these industries. We need Ewes to breed the Lambs, but because the price of Lamb is so good, these animals don't add to the Ewe population. Wool is the same, while we keep cutting heads off supply is going to be limited. But there will come a time where things need to change, and production needs to increase to support the growing brands and niches that will bob up

The Dairy Food industry is a thriving one, think baby formula and organic milk. But why are Dairy Farmers struggling? Because, unlike Sheep, Dairy production can be ramped up quickly when things are good and all of a sudden you have an oversupply. But with the number of Farmers going out of Dairy and the developing food trends, the Dairy industry has the potential to be a boom Industry.

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Food and Fibre trends could also be the making of some regional areas, and you could argue that's already happened. Daylesford, once a sleepy place was put on the map by the fine food and accommodation of the Lake House, it became a destination, and other businesses spawned around it, and the place took off. Beechworth, an out-of-the-way hamlet in the hills, was made famous by the Beechworth Bakery, now it's a thriving foodie place. Mudgee, is another. This could be your town in the future

Our friends at BlockGrain had to change their name to AgriChain the other day. Reason? Because they realised that the opportunity in the supply chain transparency wasn't limited to Grains. Companies that make their money selling food to consumers are coming to these guys looking for systems to help them trace that Orange back to a Farmer, the Farm and paddock on the Lachlan River at Hillston. Supply chain transparency in food will become big business and the winners will be Farmers if they choose to take part.

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I could go on; the take away is that I believe that food tech is a real trend that will drive the growth in Ag, and it will be exciting

www.farmtender.com.au