The depreciation of the Australian dollar is likely to bode well for the sector, which derives almost 20.0% of revenue from exports
Melbourne, Australia (PRWEB) August 12, 2013
The Agribusiness sector in Australia is highly diverse, and no longer characterised by family farms selling produce at fresh food markets. Agribusiness is a high-tech commercial sector centred on the business side of farming, and is now attracting more corporate interest than at any stage in its long history. It covers businesses operating as meat and grain processors; fibre, textile and food manufacturers; and agricultural machinery sellers, through to all different types of farming. According to IBISWorld industry analyst Emily Witham, “over the five years through 2013-14, sector revenue is expected to grow at a compound annual rate of 3.2% to $206.9 billion”.
Family farms are still prevalent across the nation, though the revenue generated by corporate farms is substantially higher than that of traditional family farms. “Large multinational companies are increasingly becoming involved in agribusiness activity, often increasing their market share via inorganic growth,” says Witham. These corporations are encouraging vertical integration across the sector. One of the biggest obstacles to sector growth over the past five years has been the influence of adverse weather patterns across Queensland and Victoria, along with a late wet season in Western Australia in 2013-14. Early in 2011 and again at the start of 2012, heavy rainfall and flooding caused widespread damage across many agricultural segments including crops and livestock. Major problems for these segments included crop loss, delays and disruptions to harvests, and rain damage. Transport problems also arose due to flooded roads and damaged infrastructure. Concentration in the Agribusiness sector is quite low. Agriculture is a naturally fragmented sector, because farms are never big enough to control any one market in which they operate. The most significant players in the industry include GrainCorp Limited, Olam Australia Pty Ltd and JBS Australia Pty Limited.
Sector revenue is expected to grow by 1.4% over 2013-14 as farmers and operators benefit from replenished herds and good crop yields. Looking further ahead, increases in prices and output will help fuel growth for the sector over the next five years. Rising global demand will also assist growth, especially for export markets such as South Korea, Japan, China, India and the United States, all of which are major growth areas for domestic produce. The depreciation of the Australian dollar is likely to bode well for the sector, which derives almost 20.0% of revenue from exports. Livestock and other farm supplies wholesaling will remain a big segment in the Agribusiness sector, and the presence of larger corporations is expected to rise due to the increasing prevalence of contract farming.
For more information, visit IBISWorld’s Agribusiness report in Australia industry page.
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IBISWorld industry Report Key Topics
The Agribusiness sector includes businesses that are directly engaged in, or directly benefit from, agricultural activities. All businesses in this sector produce agricultural commodities, are primary processors of agricultural produce, or supply goods and services to farms.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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