DIVERSITY of markets and supply base and maintaining a thorough understanding of customers emerged as key pathways to building resilience in unpredictable agriculture export markets at a recent industry forum in Darwin.
Hosted by National Australia Bank agribusiness personnel, the Export and Trade Forum delved into the major challenges, opportunities and considerations for those looking to overseas markets.
Justin Slaughter, managing director of Austrex, one of the largest livestock export businesses in the world, said the inherent volatility of the live cattle industry meant it was very important to have a number of markets and supply bases.
Austrex has played a significant role in exporting livestock from Northern Australia for many years and also sends breeding stock from the south to China.
The company also exports from other cattle producing origins.
“In this business, there are a significant number of risks and things that can change that are outside our control,” Mr Slaughter said.
“We try to focus on what we can control.
“That starts with an in-depth understanding of markets. Do your due diligence on markets and the customers you are dealing with.”
Sanctions in Russia, ongoing policy changes in China and financial crisis in Indonesia were a few examples he gave of where it was important to know what was happening in markets you are supplying.
Mango producer Marie Piccone, managing director of Manbulloo, said for her company, exporting via their own brand Mango Road, was an attempt to build in diversity in order to manage risk.
Manbulloo has a 320 hectare farm near Katherine, along with three other Queensland farms, enabling it to harvest KP and R2E2 varieties from September to February.
It has an eight-year supply contract with Coles.
“We spent a number of years analysing what sort of value we were able to extract out of markets overseas,” Ms Piccone told the forum.
“A major risk for horticulture is there is not enough value in overseas markets, especially with close Asian markets, so that the producer and exporter, and the importer, have some sort of profitability.”
Social media, and the havoc it can play with reputation, was also raised as a major modern-day challenge.
Head of the Northern Territory Government’s Northern Australia Development Office Luke Bowen said the recent Brazilian beef corruption affair showed the power of social media.
“Within nanoseconds, social media had the world shutting down Brazil’s markets,” he said.
The live trade ban implemented in Australia in 2011 also demonstrated its potential.
“Social media was just starting to flex its muscle then and our the cattle industry was in no way present on social media so it was open season,” he said.
“The government panicked. We all know what happened.
“These are major risks that are real today - the way social media can self propagate and we can see a market shut down as a result.
“We can be undone just like that.”
Australian beef had a great reputation internationally but was not a big player on the world market, Mr Bowen said.
“We are a niche, premium supplier and our competitive advantage in this space isn’t going to last forever,” he said.
“Our competitors are getting smarter with their food safety systems and there are plenty out there quite happy to see us knocked off the perch.”
Variable supply and the effect that had on reputation was also an issue from horticulture’s perspective, Ms Piccone said.
“What often happens in open markets where there are no quarantine protocols is that a number of exporters pop up around Australia and take advantage of available product at a given time, sending it out,” she said.
“Still, in 2017, Australia has a reputation for being opportunists and having variable supply.
“Quality, supply and volumes is all based on what is happening here in Australia rather than planned programs and commitments.
“In terms of an overall Australia brand in horticulture, the big questions are about whether we will be reliable.
“That makes us fickle. In horticulture, our Australian brand is all over the shop.”