Resources, Water and Agrifood Opportunities Year of the Farmer, Wangaratta David Sackett

An easy future? “Invest in ag and go to the beach for the next five years” (Blackrock)

The big picture issues we need to focus on Fewer farmers ( p.a.) Increase demand for food (70% increase by 2050) Increase demand on farmers – Social, environmental, welfare – More complex Farming still a good low risk business

Rain-fed farming systems Low labour requirement (replace with capital) Low cost producer Technology Commodity v Niche? – Out of season – Quality (safe, organic) – Location – C ereals, oilseeds, sheep, beef (?), cotton – Low labour requirements (capital replaces labour) Where is our competitive advantage?

Cereal and oilseeds Southern beef Sheep meat Wool Dairy Cotton? Sugar? ?????????? Horticulture Northern beef

Commodity v Niche Location Natural resources Human resources – Expertise – Interest and passion YOUR competitive advantage?

Lamb Production Average cost/kg DWt

Lamb Production Average cost/kg DWt

The best wheat producers Average Cost/tonne

The best wheat producers Average Cost/tonne

Three things Productivity Note: Production and Productivity are very different What really does matter?

Sheep0.3% Beef1.5% Cropping2.1% Productivity gain by sector

Some key questions “Low input” or “high input”? Specialised or diversified? Variation (risk?) – resilient – responsive

Chasing price premiums ( organic, out of season ) Price risk management ( forward selling etc ) Grazing systems “Farming” carbon ( <$200/tonne ) Most new technology The Things that do not Matter

Labour (machines) Livestock Land Where will the gains come from?

A food crisis or a water crisis? 70% of the worlds water is used to grow 40% of the worlds food

Water use – Human use (golf courses) – Manufacturing/Mining – Agriculture » Horticulture » Seed crops » Summer crops eg cotton, rice, corn » Dairy » Winter crops eg wheat, canola » Beef and lamb » Wool Decreasing returns

The opportunities Slow change in farm structures – Fewer larger farms v lifestyle – Separating ownership and management – Separating land and enterprise ownership Intellectual property

Identify your competitive advantages – Look at a range of models Productivity gains remain critical for long term viability in commodities Plenty of scope Human capital Fewer farms New technology Summary