In its recently-released report, ‘Tasmanian food and agriculture – ready set, grow’, global agribusiness banking specialist Rabobank has identified five key Tasmanian agricultural industries that are best suited to capitalise on both increased public and private sector investment in agricultural infrastructure and growing external demand.
Rabobank analyst and report co-author Ben Larkin says seafood and dairy production are the industries with the most obvious growth prospects in Tasmania, although the future also looks bright for horticulture and vegetables, red meat, and wine and beverages.
“These growth opportunities are supported by a number of competitive advantages possessed by Tasmanian agriculture,” Mr Larkin says.
“Access to water and good quality soil, an accommodative climate, superior market access, strong food safety and traceability credentials and a unique provenance story are important factors that give Tasmania a unique competitive advantage.”
However, despite the bright outlook, there are challenges that need to be addressed if Tasmania is to fully capitalise on these opportunities, Mr Larkin warned.
“Collectively, Tasmania’s food and agriculture sector needs a long-term strategy and effective supply chain management to profitably grow the sector into the future,” he says.
“Compounding the challenge to the sector is the time-sensitive nature of the opportunity, as other production regions identify agriculture as a growing sector. Renewed focus and investment from both the public and private sector will be needed to fully capitalise on these opportunities at present.”
The value in seafood
The Rabobank report highlights the strength of the Tasmanian salmon industry which is poised for growth to supply both the domestic and international (predominantly Asian) markets.
“Since the first harvest, growth in salmon production has been strong, with current production to reach close to 50,000 tonnes in 2014 to 2015, giving salmon production a compounded annual growth rate of 10 per cent over the past five years,” Mr Larkin said.
“Aquaculture is Tasmania’s highest-value agricultural sector, and when considering its geographic isolation which allows for clean water and bio-security advantages compared to other salmon production regions in Australia, this helps build provenance value too.”
Top growth in dairy
Mr Larkin says Tasmanian dairy has a globally competitive farmgate production model, and the state continues to see a number of dairy farm conversions.
“Tasmanian milk production growth has averaged 2.6 per cent growth annually compared to 0.5 per cent nationally,” Mr Larkin said.
“We’re also seeing Tasmanian dairy processors embark on a strategy to maximise returns by shifting their product mix to higher-value products and ingredients, an important consideration in what is largely a commodity-based market.”
Recent investment in processing capacity upgrades in the state also means there is an opportunity to process an extra 300 million litres of milk above current milk supply levels.