Thirst for market insight as uncertainty reigns

Thirst for market insight as uncertainty reigns


New market insight businesses and products popping up.


THE EXTREME uncertainty that has become the new way of life for beef producers has sparked red hot demand for market insight as business plans are forged amid unprecedented volatility.

Cattle prices in record territory, global protein shortages, geopolitical trade tensions and ongoing virus outbreaks and lockdowns make pre-2020 head scratching about the weather and the market seem mild.

New ventures supplying market analysis have been launched, new products - particularly podcasts - are flowing through and banks and service providers are reporting big jumps in demand for research reports and data.

Tim Hunt, head of RaboResearch in Australia, said the uncertainty created by the COVID-19 crisis, alongside the need to make business plans regardless, had created a surge in demand for market insight across all agriculture sectors.

In the first six months of 2020, Rabobank's podcast audience jumped by 38 per cent, with a 66pc increase in research report downloads by clients.

"COVID-19 isn't the only thing going on. Swine fever and trade wars have also contributed to a thirst for global insight from Australian farmers. But COVID-19 has definitely taken this to another level," he said.

"The key is to balance the uncertainty of what lies ahead with providing farmers with something they can actually use for decision making.

"You can't invest looking in the rear view mirror. It has to entail forward-looking views no matter how uncomfortable that is."

Agribusiness giant Elders has now entered the market analysis scene, with a separate, independent arm of Thomas Elder Markets dedicated to insights complementing the existing consulting business and research, development and extension division.

The new sector will be headed up by analysts Andrew Whitelaw and Matt Dalgleish, who have parted ways with well-known agriculture analyst outfit Mecardo. It will offer succinct, objective analysis highlighting areas of concern producers should be aware of.

Thomas Elder Markets analysts Andrew Whitelaw and Matt Dalgleish.

Thomas Elder Markets analysts Andrew Whitelaw and Matt Dalgleish.

Grains and livestock will feature heavily but the likes of pork and dairy will also get a run.

Eight different groups showed interest in working with the two analysts after they left Mecardo, a strong recognition of the potential for market information services.

"Dynamics are changing and the importance of data to making good decisions is becoming widely known," Mr Dalgleish said.

"Australia operates in hundreds of export centres and adheres to open market principles and producers understand the interconnections globalisation has brought us - it's something that has really been brought home with COVID-19.

"The generational shift in farming has also seen many producers now running operations who have left the farm for some time to complete tertiary studies, travel, gain exposure to other industries and they have come back with a different outlook, one that values data and market insight highly."

Meat & Livestock Australia launched new market podcasts in April as a way of getting more information to producers and supply chain stakeholders in a timely manner. MLA also reports the click-through rates on its key market information channels, particularly its popular Prices & Market e-newsletter, have been strong this year.

Mecardo, meanwhile, has also announced new appointments and managing director Robert Herrmann said demand in the past few months had been as strong as it ever was, with the number of presentation requests, in particular, skyrocketing.

Mecardo has been around for 24 years, with RuralCo buying a 50pc share 11 years ago and then taking full ownership. Last year, Nutrien acquired RuralCo and Mecardo with it.

Mecardo is believed to have the largest privately-held agriculture data base in Australia and Mr Herrmann said the business thrived on using that information to 'tell stories'.

"If people are going to listen to what we say it has to be backed by evidence. If they are going to be able to use it, we have to tell it the right way," he said.

"Right now, there are so many different elements floating around that have to be considered and while analysts don't have crystal balls, they have experience in putting all those elements in their place."

With corporate ag, there was also a need to demonstrate to shareholders and boards there was objective data driving decisions, adding weight to what in the past was seen as 'something we just know', Mr Herrmann said.

The newest face at Mecardo is Adrian Ladaniwskyj, who has worked in derivatives markets for most of his career but believes Australian agriculture's future is extremely strong.

"As countries like China become more wealthy, demand for high quality food is only going to increase," he said.

Mr Ladaniwskyi will focus on cattle and grains.

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