invest in victoria€¦ · why invest in victoria’s other livestock industries? efficient...

Invest in Victoria Poultry, pork, aquaculture and other livestock

August 2018

DOZEN EGGS WERE PRODUCED IN VICTORIA IN 2015-16

Globally connectedLocally demanded

88.8M

82%OF AUSTRALIA’S FARMED FRESHWATER TROUT IS PRODUCED IN VICTORIA

invest.agriculture.vic.gov.au interactive mapped data; industries; regions

Why invest in Victoria’s Other Livestock industries?

Efficient production of livestock

Victoria benefits from economies of scale and efficient production across its livestock industries. Victorian meat producers are meeting evolving international tastes with an extensive range of product options. The industry benefits from research, development and extension (RD&E) that maximises the efficiency and quality of processed meat.

A reputation for safety and quality

Victoria’s livestock industries have an international reputation for safe, ‘clean and green’ animal products which meet international standards. Victoria’s biosecurity and traceability regulations, combined with trade relationships, allow the export of a large range of livestock and aquaculture products.

Links to growing Asian markets

Victoria is well placed to meet the growing demand for animal products by the emerging middle class in key Asian economies. Victoria’s excellent infrastructure creates export opportunities, including by air freight.

Rapid growth in aquaculture

The value of Victorian aquaculture production grew by 14 per cent over the year to 2014-15. Victoria’s aquaculture sector is one of the ‘fantastic five’ agriculture growth opportunities identified by Deloitte Access Economics, based on domestic and global demand.

Strong local markets

Chicken meat, eggs and pork products from Victoria have strong demand throughout Australia. In particular, domestic fresh pork consumption per person has been steadily increasing over the last five years.

Opportunities to add value through processing

Victoria’s livestock producers have the opportunity to collaborate with processors to meet the growing demand of time-poor consumers for safe, green, ethical and traceable livestock products. Victoria’s strong manufacturing base and diverse range of product offerings underpin opportunities in processed livestock products.

Ethical and niche production

Victoria’s robust regulatory system ensures ethical production. Diverse production systems cater for a range of high value markets. Victoria is well placed to meet consumer demand for products from ethically-raised animals.

Victoria’s dairy, beef and sheep industries are described elsewhere. This document describes Victoria’s Other Livestock industries, such as poultry, eggs, pork, goats and aquaculture.

01


Sources for this page: map, VLUIS 2016; ABS Agricultural Census 2016, ABS 7121 2015-16 ; agriculture production, ABS 7503 2015-16; food processing value, Victorian Government estimate based on 2016 REMPLAN data and 2011-12 RISE data.

Figure 1: Value of Other Livestock production in Victoria1

$1.3bn2015-16

Victoria produces diverse, high quality

Other Livestock products Victoria produces a significant share of Australia’s Other

Livestock products. This creates exciting opportunities for investment as domestic and global demand for Victorian

livestock products grows.

Livestock production across Victoria• Victoria’s regions produce varied livestock

products, with different regions specialising in different livestock products.

• Gippsland is the major region for egg production, with Central Highlands the key (meat) poultry producing region. Loddon Campaspe produces the most pig meat, while Gippsland has the highest number of farmed goats.

• Victoria also produces 82 per cent of Australia’s freshwater trout (mainly in the Ovens Murray and Gippsland regions) and 51 per cent of Australia’s farmed abalone (mainly in the south-west region).

• The gross value of Other Livestock food processing in Victoria is $2.3 billion.

• In this document, ‘poultry’ refers to meat products from chickens and other birds.

1 Unless otherwise stated, all dollar values refer to gross values in this publication.

KEY

Agricultural areas

Non-agricultural areas

Chicken meat

Eggs

Pigs

Road network

Regional boundary

02


Competitive advantages of Victoria’s Other Livestock industries

A reputation for safety• Victoria has internationally recognised and

transparently demonstrated food safety standards, and is a global leader in meat safety.

• Victoria utilises National Livestock Identification System (NLIS) technology to track goats from birth to death, allowing traceability and provenance across all parts of the production process.

• Australia has a worldwide reputation as a supplier of premium quality seafood, produced using environmentally sustainable practices in wild-catch fishing and aquaculture.

Food processing advantages• Victoria has a strong food processing base,

hosting companies undertaking over 30 per cent of Australia’s food processing RD&E.

• Victoria’s significant share of production in seafood, chicken meat, eggs, pork and other emerging meats means that there are ample available inputs for food processing to meet domestic and export demands.

• The gross value of Other Livestock food processing in Victoria is $2.3 billion.

Efficient• Victoria benefits from economies of scale and

efficient production across its livestock industries.

• Victorian meat producers are meeting evolving international tastes with an extensive range of grass-fed, grain-fed and lean options, with animals raised and processed to stringent standards.

• Victoria benefits from RD&E investment that maximises efficiency and the quality of processed meat.

Globally connected• Victoria has strong relationships

with major export partners including China, USA and Japan across a range of livestock products.

• Victoria has world-class export infrastructure and is home to Australia’s largest container and general cargo port in Melbourne.

Strong local markets• Domestic fresh pork consumption

per person has been steadily increasing for the past five years.

• Victoria produces 20 per cent of Australia’s chicken meat and sells 97 per cent of its product domestically.

• Victoria produces 27 per cent of Australia’s eggs of which 85 per cent are sold domestically.

Deloitte Access Economics has assessed data on numerous factors of competitive advantage relating to agriculture and food at the regional and industry levels. Victoria’s wide range of livestock products have a ‘clean and green’ reputation both domestically and overseas.

97%of Victoria’s chicken meat produce is sold domestically

03


Victoria’s poultry and egg industries

Eggs• Victoria produces 88.8 million dozen eggs per

year and accounted for 27 per cent of Australia’s total egg production in 2015-16.

• 85 per cent of Victoria’s eggs are sold domestically.

• Many Victorian egg producers are moving towards free range and barn laid eggs to meet changing consumer preferences.

Poultry• Victoria contributes 20 per cent of Australia’s

chicken meat production and 32 per cent of Australia’s other poultry production (by volume).

Victorian poultry and egg industries benefit from proximity to Melbourne and strong domestic demand for poultry products.

Figure 2: Victoria’s poultry by value and by volume, 2005-16

Sources for this page: agricultural production, ABS 7121 and 7503, 2005-16; food processing value, Victorian Government estimate based on 2016 REMPLAN data and 2011-12 RISE data.

Consumer demand is expected to remain high, as chicken meat prices continue to be substantially lower than prices of most alternative meats.

– Invest Victoria

• Victoria sells 97 per cent of its poultry products domestically.

• Domestic consumption of Victorian chicken meat is expected to increase, as price-conscious consumers choose chicken meat over more expensive meats.

• The chicken meat industry is vertically integrated, with companies often owning facilities across the supply chain. However, around 200 independent farmers are contracted to grow meat chickens (generally referred to as broilers) on behalf of processors.

• The value of poultry processing in Victoria is $1.3 billion.

04


Victoria’s fast-growing aquaculture industry

Victoria’s fast-growing aquaculture industry is pushing Victoria’s exports forward• Victoria’s aquaculture industry increased its

production value by 35 per cent between 2011-12 and 2014-15, to $27.6 million.2 Nearly half of the production was exported to Asian, Middle Eastern and US markets, 9 per cent was for aquariums and the remainder was sold domestically.

• Victorian aquaculture operates in a variety of offshore, coastal and inland facilities. It produces trout, abalone, blue mussels, aquarium finfish, Murray cod, Atlantic salmon, barramundi and yabby.

• The Victorian aquaculture industry consists of around 100 license holders.

• Current national aquaculture research carried out by Australia’s national science agency, the Commonwealth Scientific and Industrial Research Organisation, focuses on better breeds, alternative feeds and advanced health checks, as well as high-pressure food processing.

• Analysis by Deloitte Access Economics has identified aquaculture as one of the main growth sectors of Victorian agriculture.3 This assessment was based on quantification of over 15 factors of advantage at the regional level. These are the sectors where rising global demand is best met by Victoria’s competitive advantages, some of which are highlighted on page 3. The chart below highlights the relative size of each agriculture and food processing sector (by the size of the bubble), Victoria’s level of competitive advantage for each sector (horizontal axis), and the opportunity for future growth based on long-term trends affecting domestic and global demand (vertical axis).

Figure 3: Market opportunity and competitive advantage for Victorian agriculture (10 year estimate)

Aquaculture is a fast-growing industry in Victoria as domestic and overseas customers alike demand more Australian fish species.

Source: Deloitte Access Economics

Victoria’s competitive advantage(right is stronger)

Ma

rke

t O

pp

ort

un

ity

(hig

he

r is

str

on

ge

r)

Higher growth

Lower growth

Fruit

Other crops

Agritourism

Aquaculture

Sheep meat

Beef

Poultry

OilseedsEggs

LegumesPigs

Nuts

Wine

Dairy

Cereals

Wool

Veg

2 ABARES (2016), Australian fisheries and aquaculture statistics.

3 Deloitte Access Economics (2014). Building the Lucky Country #3: Positioning for prosperity – Catching the next wave.

05


Victoria’s emerging meat industries

Goat• The goat meat industry has experienced strong

growth with growing demand in many overseas markets. In 2015-16, Victoria exported $97 million worth of goat products globally.

• Gippsland has the highest number of farmed goats.

Pork• Victoria produces more pork than any other

state and is home to over a quarter of the national pig herd.

• Domestic fresh pork consumption per person has been steadily increasing for the past five years.

• Victoria’s pork processing is worth $628 million.

As one of the world’s biggest per-capita meat consumers, Australians love animal products. Victoria is heavily involved in meeting the demand for these livestock categories.

The meat supply chain is backed by strong local research, advanced infrastructure, government support and by high food safety standards. We apply strict international and national standards to premium meat products. – Invest Victoria

Figure 4: Key export markets for Australian goat meat (2015)

Sources for this page: agricultural production, ABS 7121, 2015-16; food processing value, Victorian Government estimate based on 2016 REMPLAN data and 2011-12 RISE data; exports, Victorian Food and Fibre Export Performance Report 2015-16.

Other• Victoria produces over a third of Australian

specialty game meat products such as venison and rabbit.

06


Victoria has a number of top universities teaching specialised courses in agriculture and food processing. These are building the agronomic, scientific, technological and agribusiness capabilities of today’s livestock workforce and tomorrow’s leaders.

A wealth of skills and knowledge

Institution Specialist Agriculture Courses

Skills Victoria Technical and Further Education (TAFE) Institutes e.g. The Gordon, Melbourne Polytechnic, Bendigo TAFE

Certificates and Diplomas in Food Science and Technology, Agriculture, Agribusiness, and Rural Operations

Skills Victoria Technical and Further Education Colleges

Australian Meat Industry Training Package includes:• Certificates I, II, III and IV in Meat Processing• Diploma of Meat Processing • Advanced Diploma of Meat Processing • Graduate Diploma of Agribusiness

RMIT University Master of Food Science and Technology

Bachelor of Science (food technology)

Victoria University Bachelor of Applied Science (food science)

Bachelor of Science (biotechnology)

The University of Melbourne Master of Agriculture Sciences

Master of Agribusiness

Bachelor of Agriculture

Graduate Diploma in Climate Change for Primary Industries

Bachelor of Science (agricultural science)

Monash University Bachelor of Food Science and Technology

Swinburne University Certificate III in Rural Operations

Deakin University Graduate Certificate of Agricultural Health and Medicine

La Trobe University Bachelor of Agricultural Sciences

Bachelor of Agriculture and Technology

Bachelor of Business (Agribusiness)

Federation University Certificate III in Agriculture

Diploma of Agriculture

Victoria also has a number of dedicated agricultural colleges such as Longerenong College and Marcus Oldham College.

07


Investment opportunities in Victoria’s Other Livestock industries

As well as excellent investment opportunities in beef, sheep and dairy, there are great opportunities in Other Livestock industries. This page summarises just a few of the numerous opportunities in Victoria’s Other Livestock industries.

1. Aquaculture

2. Export value-added products

Global demand trends indicate that investing in aquaculture offers long-term capital growth.

Strong long-term demand prospects • Domestic demand for fish is growing as consumers become

more health-conscious.

• Global demand is growing for protein rich foods in increasingly western-style diets.

• Aquaculture operations increasingly mix with tourism, especially along food trails.

Opportunity for investors to establish partnerships with existing livestock processors to produce for high-value target markets.

Victoria’s strong food processing base • Victoria has a strong food processing base and diverse range of

product offerings that underpin opportunities in areas such as specialist livestock products, which are currently worth $2.33 billion.

Changing trends in consumer preferences • Increasingly time-poor, health conscious and socially and

environmentally conscious consumers demand more safe, green, ethical and traceable food. Victoria’s processors, in conjunction with primary producers are well positioned to supply high-quality products to meet this growing demand.

• Most Australian meat is Halal certified, reflecting demand domestically and overseas for Halal certified meats.


08

3. Domestic markets

Investing in chicken and pork production can take advantage of growing per capita demand for these meats.

Growing domestic demand for chicken and pork• Consumers are becoming more health conscious, which means

demand for fresh meats and eggs is likely to rise over the medium and long-term, relative to processed small goods.

• As prices of chicken meat will continue to be lower than prices of most alternative meats, consumer demand for chicken is expected to remain high.

• Fresh pork consumption per capita has been rising for the last five years.

Victorian producers are well placed to meet growing consumer demand for ethically produced foods, due to robust regulatory standards and diverse production systems.

Changing consumer trends• Consumer preferences for ethically produced meat and livestock

products are rising in Australia and globally. Particular production and certification systems generate price premiums among niche markets.

• Victoria has a strong reputation for humane animal production, reflecting regulatory standards, certification systems, and domestic consumer preferences.

• Victoria is well placed to meet consumer demand for high value products with ethical provenance, from diverse production systems.

Investment in niche animal products such as rabbits and venison, and dairy from goats, to capture consumer trends toward alternative meat and dairy options.

Changing consumer trends• Increase in demand for wild rabbits in boutique restaurants

and eateries.

• For consumers intolerant to cow’s milk, dairy products from goat’s milk provide an alternative niche option.

4. Ethical production

5. Emerging animal products

09


Examples of major Other Livestock companies in Victoria

HazeldenesHazeldenes chicken farms are based in Bendigo, Victoria. The company is the largest private employer in the Bendigo area. In 2012, Hazeldenes invested in a primary processing facility in Lockwood, Victoria, which is now the most modern facility of its kind in Australia. With a focus on animal welfare, and innovation in production, Hazeldenes produce an extensive range of high quality, fresh and frozen chicken products.

Farm PrideFarm Pride is a publicly listed company in Australia that is involved in all parts of the egg supply chain. The company is based in Keysborough, Victoria and two of its four processing facilities are located in the State, in Keysborough and Lethbridge. Farm Pride Foods has approximately 1.2 million birds and produces 9 million eggs every week, resulting in an annual turnover of almost $94 million from company farms and contractors combined.

Inghams Group LimitedInghams is a vertically-integrated poultry producer and the largest integrated poultry producer in Australia and New Zealand. Inghams is also a significant feed producer in Australia. Within Victoria, Inghams operates two hatcheries, a feed mill, a distribution centre (in Melbourne), a primary processing plant and a secondary processing plant.

George Weston Foods (GWF) George Weston Foods (GWF) is one of the biggest manufacturers of food in Australia. In 1999, GWF acquired Don Smallgoods, which largely manufactures pork products including ham, bacon, salami and other smallgoods. In 2008, GWF also purchased KR Castlemaine in order to increase innovation and efficiency. All Don Smallgoods production now occurs in its large and modern manufacturing site based in Castlemaine, Victoria.

Many top global companies have a presence in Victoria’s Other Livestock industries, reaping the benefits which come with operating facilities in the region. According to IBISWorld and Deloitte’s analysis, major Other Livestock companies in Victoria include:


10

The Victorian Government can facilitate your next investment

What the State Government of Victoria can provideThe Victorian Government’s investment team provides free confidential services and professional advice to both existing and new investors. Invest Victoria is the first point of contact for new clients. It provides support to international investors, and can direct domestic clients to investment advisors specialising in Melbourne (Metropolitan Investment) or regional Victoria (Regional Development Victoria), including a dedicated Agribusiness Facilitation service.

Services include:

1. Help with your market-entry business case. Our dedicated team will supply you with up-to the-minute information on market potential, existing companies, research and development capabilities, labour market skills and costs.

2. Introductions to our great industry contacts and local suppliers.

3. Confidential expert advice to help support your choice of investment. Our experienced team can help you work through the formal approvals you might need and even visit potential sites with you and speak to estate agents on your behalf.

4. On-ground support for existing and local investors seeking assistance for their business expansion plans through our metropolitan or regional investment engagement teams. Support for international investors in their home market through our extensive network of international offices.

5. Introductions to contacts across all levels of government. Financial support to attract projects of strategic significance may also be available.

6. A large team of experienced local and overseas officers ready to give you the practical support you need to maintain your new project’s momentum.

7. Investment facilitation specialists who can work with you in relation to sites, infrastructure connections and project approvals.

See the ‘Who to Contact’ section, on the next page, or visit: invest.vic.gov.au

Grants for businessesThe Victorian Government offers a range of grant programs to help grow Victoria’s agriculture and food processing industries, infrastructure and supporting systems. To identify the programs most relevant to your project, contact us directly using the details on the following page, or browse the links below.

• Grants for the agriculture and food industries: agriculture.vic.gov.au/agriculture/food-and-fibre-industries

• Grants directed at strategic priorities, including food and fibre: invest.vic.gov.au/how-we-can-help/planning/incentives-grants-and-programs

• Grants focused on regional development: rdv.vic.gov.au

• Financial incentives offered under the Latrobe Valley Economic Growth Zone: lva.vic.gov.au/economic-growth-zone/

• Targeted programs to support business growth: business.vic.gov.au/support-for-your-business/future-industries

• Programs to support infrastructure or innovation: rdv.vic.gov.au/programs-and-grants

The Victorian Government provides local and international investors with the information needed to establish or expand their business.


11

Who to contact

All investment inquiriesInvest Victoria can put you in touch with the best advisors for your project:

[email protected]

invest.vic.gov.au

Victorian regions If you already know which part of regional Victoria you wish to invest in, you may wish to speak directly to Regional Development Victoria:

rdv.vic.gov.au/contact-us

Authorised and published by Department of Economic Development, Jobs, Transport and Resources, 1 Spring Street, Melbourne. August 2018.

The content in this document is provided for information purposes only. No claim is made as to the accuracy or authenticity of the content in this document. In no event will the State of Victoria, its agents, instrumentalities and employees be liable for the accuracy of the information contained in this document nor its use or reliance placed on it. The information in this document is provided on the basis that all persons undertake responsibility for assessing the relevance and accuracy of its content.

This document is also available in an accessible format at invest.agriculture.vic.gov.au.

This document is produced and maintained by Agriculture Victoria.

ISBN 978-1-925734-47-8 (Print) ISBN 978-1-925734-48-5 (pdf/online/MS word)

Further Information

This document is one of 16, which describe the investment opportunities in each of Victoria’s agriculture and food processing industries and regions. The following documents are especially relevant to Other Livestock industries: Food Processing, Central Highlands, Loddon Campaspe, Gippsland, and the Victorian document. These are available at the website below. This website also has an interactive map providing access to data on rainfall, production, processing, infrastructure, and other factors relevant to agriculture and food processing.

invest.agriculture.vic.gov.au


12

agriculture.vic.gov.au

invest in victoria€¦ · why invest in victoria’s other livestock industries? efficient...

Documents