The GRDC Market Advisory Group has taken a long look over the edge of the century. The object of this crystal-gazing was to shed light on future markets for Australian grain to the year 2005 and to suggest what research focus might best serve those markets.
At a group workshop held in Melbourne, participants highlighted Australia's need to be seen internationally as a reliable supplier with consistent and sustainable producers.
Wheat — running to stand still
Australian wheat exports will be limited not by demand, but by what we can supply, Australian Wheat Board General Manager Marketing Ron Storey told a Melbourne workshop of the GRDC Market Advisory Group.
Mr Storey believes that Australia will need to produce regular 20-million-tonne wheat crops from the year 2000 just to cater for an increase in domestic consumption, to retain our share in the fast-growing Asian market, and to maintain present exports into the Middle East.
There won't be a dearth of customers but the key issue for Australia will be moulding supply and quality to meet customer needs. With up to 45 market-based grades and segregations, Australia is already well placed in this regard, and has a healthy mix of large and small overseas customers.
At the moment Australia cannot meet demand for high protein grain used in Asian pan breads and noodles. Mr Storey identified other Asian markets for snack foods, steamed products, skins and wraps and competitively priced feed.
Mr Storey predicted strong growth in domestic demand would be propelled by demand for feed wheat.
Barley—a lesson in value-adding
The good news for the barley industry is that Australian processors have shown themselves to be highly competitive in converting malting barley into malt. Notwithstanding heavy subsidies paid to competitors, Australia is the fourth-largest exporter of malt in the world.
The bad news is on the raw commodity front. WA Grain Pool General Manager Kevin Swan told the Market Advisory Group that in an industry which exports 84 per cent of its product (including malt) Australia is losing share in overseas malt markets because our traditional malting barley varieties have fallen behind competitors. "Competitive processing cannot fully compensate for uncompetitive barley varieties," Mr Swan said.
Mr Swan opposed suggestions that growers receive premiums for differentiated product. All malt simply had to achieve the quality required in the marketplace, and would then earn world market parity prices. Brewers did not pay premiums for malt which is better than specified, and lower quality malt is discounted or fails to sell at all.
(Newer varieties set to re-capture markets — see stories p9 on new malting barley releases and benchmarking world barleys—Ed.)
Along with the release of new malting varieties, Mr Swan called for a means of 'silo-based' varietal identification and more research into germination risks inherent in storage.
Pulses — a case for risk management
Is the Australian industry declining because farmers perceive greater risks and lower rewards in growing pulses?
The answer, according to Melbourne participant Bill Gadd, trading and export manager, AUST-GRAIN Exports Pty Ltd, is more accurate information on global supply and demand. Mr Gadd's experience showed that international markets saw the quality of some Australian products as 'second best' and the supply as unreliable. Mr Gadd saw a need for further research to improve Australian core products (lupin, field pea, chick pea and faba bean) and their marketing; and a need to satisfy consumers on continuity of supply, product quality, cost competitiveness and commitment to service.
France is reducing areas sown to peas, which could open the way to export feed grade pulses to such countries as Spain, Holland, Germany and Belgium. Reduced plantings all around the Mediterranean, crop problems and continued rise in demand on the Indian subcontinent could further export opportunities.
Asia presented a mixed picture with increases in production in Myanmar and Vietnam but declines in Thailand and China. South America would continue to need more than it produced. Overall, world demand continued to increase and production would gradually fall short of market needs.
With an annual growth rate of 6-8 per cent Asia offers a large market. Increase in demand for food pulses is being matched by a growing demand for meat, which would in turn increase the demand for feed pulses. Rosemary Richards of the Meyer Strategy Group described Australia as good at bulk production, but poor at niche marketing and value-adding. She said Australian supply was too often seen as unreliable and fragmented by manufacturers.
She identified Australian market opportunities in prepared and quick cooking pulses, in containerised/bulk exports to higher value markets, in processed products such as snack foods, in functional foods and in food service markets in Australia and Asia.
The Meyer Strategy Group estimated consumption of feed grain to the year 2003 was growing at 1.5 per cent annually, with world production increasing only 1.2 per cent. The Group saw Australia remaining a net exporter, but increasing imports of lower value feed grains such as sorghum, maize and soybean to meet growth in domestic demand. Production would shift toward higher value grains; this had already caused a sharp fall in feed barley exports.