Trading in a growing world Northern Territory Cattleman’s Association Industry Conference, Darwin Dr Andrew Stoeckel Visiting Fellow, CAMA, Australian National University 28 March, 2014

The all-important consumer!

…. who is also a voter

The Golden Math ProfitRevenueCosts = _ Marketing Exchange rate Trade barriers CompetitorsIncomes Price X Sales volume Fixed costs Variable costs

Another 1 billion middle class consumers by 2030 China India Other Asia Japan USA EU Others Shares of Global middle-class consumption,

China’s Booming Middle Class Source:

Global food projections in White Paper

The good news: enormous growth in beef demand

Met by import demand for beef, not feed grain

… and the less good news: China faces some enormous challenges Chinese funding costs Source: Yiping Huang /Documents/presentation-slides/yiping-huang-presentation.pdf

China real effective exchange rate: 40% appreciation over last 8 years 40%

China’s Demographic Transition

Japan’s massive debt burden

Eurozone banks in trouble

Public debt as percent of GDP

…. Nor do we have the world market to ourselves

Barriers to trade Asia is where growth is, our part of world and where barriers high Korean FTA to see barriers come down to achieve parity with the USA Trade Minister Robb currently in Japan negotiating FTA China FTA talks but our view on in-bound investment TPP talks but no ‘fast track’ for President All FTA’s are preferential and also because all meats are substitutable there is a lot of ‘switching’ of trade and net gains not as big as if multilateral free trade secured.

Productivity slowdown is global feabdc0.html?siteedition=intl#axzz2r04smn9thttp:// feabdc0.html?siteedition=intl#axzz2r04smn9t from

The real competition is from resources sector

What can marketing do?

Integrity of the supply chain is critical Have to ensure that marketers can consistently deliver on the attribute of the product they promote Need a mix of individual and generic promotion Input supplier ProducerProcessor Wholesaler & retailer Consumer Product flow Information and communication

Input supplier ProducerProcessor Wholesaler & retailer Consumer Product flow Information and communication

Key messages Long term prospects for beef promising Expect short term volatility as global monetary stimulus unwinds Productivity problem is global and governments will finally have to tackle hard structural change decisions Trade liberalisation part of that, eventually Japan included Absolute integrity of supply chain critical so marketers can explore, promote and deliver the attributes that are valuable Success is a matter of getting a host of small things right