Food ScoreCard 2014-15 - Department of Primary … FOOD SCORECARD 2014-15 To track the advances in the South Australian food and wine industries, Primary Industries and Regions South

Food ScoreCard 2014-15PRIMARY INDUSTRIES AND REGIONS SOUTH AUSTRALIA

FOOD SCORECARD 2014-15 2

Food ScoreCard 2014-15© Government of South Australia 2015

DISCLAIMER

PIRSA and its employees do not warrant or make any representation regarding the use, or results of the use, of the information contained herein as regards to its correctness, accuracy, reliability and currency or otherwise. PIRSA and its employees expressly disclaim all liability or responsibility to any person using the information or advice.

ALL ENQUIRIES

Jack LangbergPrimary Industries and Regions SA (PIRSA)Level 15, 25 Grenfell StreetGPO Box 1671, Adelaide SA 5001T 08 8429 0445E [email protected]


Contents1. FOOD SCORECARD 2014-15 RESULTS 4

1.1 Gross Food Revenue (GFR) grows 7% to a record $16.4 billion 5

1.2 South Australia’s farmgate production value makes a significant gain 6

1.3 Finished food reaches record level of $6.6 billion (wholesale values) 8

1.4 South Australian food exports (overseas) increase by 9% to $4 billion (FOB) 9

1.5 Retail and hospitality sales reach $9.8 billion 11

2. SUMMARY AND OUTLOOK 12

3. GLOSSARY OF TERMS 13


To track the advances in the South Australian food and wine industries, Primary Industries and Regions South Australia (PIRSA) has developed a series of industry ScoreCards, which provide detailed value-chain measures of annual performance. This report outlines the 2014-15 performance for South Australia’s food industry. The paper includes details of the Food ScoreCard and tracks performance against the Food Target articulated in South Australia’s Strategic Plan.

1. FOOD SCORECARD 2014-15 RESULTSThe South Australian Gross Food Revenue (GFR) has continued to grow in 2014–15.

Highlights of the 2014-15 Food ScoreCard include:

• Gross Food Revenue increased by $1.07 billion (or 7%) to reach record levels of $16.4 billion.

• Finished food values have grown by $785 million (or 13%) to reach record levels of $6.6 billion.

• Food production – measured in farmgate values – rose by $479 million (or 11%), due to increases in the value of livestock, horticulture, grain and seafood production.

• Total overseas exports increased by $333 million (or 9%) over the year to reach $4 billion.

• Interstate commodity and processed food sales increased by $434 million (or 20%) to $2.6 billion.

• Growth in food retail and food service sales increased by 3% following an 8% average annual growth over the last 13 years to reach a record of $9.8 billion.

• South Australian food imports increased $300 million (or 32%) to reach $1.23 billion.

Exceptionally strong growth in overseas exports and interstate sales has seen the GFR reach a new record level of $16.4 billion, with growth of $1.03 billion (or 7 %) on last year’s positive result. Table 1 shows the contribution from each of the main sector groups and how results along the value-chain contributed to the 2014–15 South Australian GFR growth. Growth experienced in the last 12 months, in most parts of the food value chain, has exceeded the annual average growth experienced since 2001–02. Retail and service sales is the exception, with a slowing down from the strong growth experienced over the last decade.

Table 1: South Australia’s Food ScoreCard summary, 2014-15, $ million

Industry

Farm Gate

Value

Finished Food Value

Overseas Exports

Net Interstate

Trade

Retail & Service

Sales

Gross Food

Revenue

Field Crops 1 636 1 080 2 024 452 2 114 4 590

Livestock 1 516 3 051 1 395 1 039 2 151 4 585

Dairy 235 396 43 152 744 938

Horticulture 999 1 499 225 756 2 094 3 075

Seafood 394 481 245 138 493 876

Other 0 136 72 60 2 211 2 343

Total Food ($m) 4 779 6 644 4 004 2 596 9 807 16 407

$m Value change from 2013-14 479 785 333 434 302 1 069

% Growth since 2013-14 11% 13% 9% 20% 3% 7%

Ave Annual Growth since 2001-02 3% 5% 2% 7% 8% 5%

Note: Numbers have been rounded and discrepancies may occur between sums of the component numbers and totals


1 Primary production estimates used in the Food ScoreCard does not include animal fodder and fibre activity. These estimates are based on the most up-to-date and verifiable inputs, including from: SARDI, Econsearch, ABS and ABARES, as well as industry estimates captured via extensive consultations with industry bodies, enterprises, and from within PIRSA.

1.1 Gross Food Revenue grows 7% to a record $16.4 billion

In 2011, the Government of South Australia released an updated South Australia’s Strategic Plan (SASP). This plan included a target to grow the contribution made by the South Australian food industry to $20 billion by 2020 (baseline: 2001–02)1. This represents an average increase of around 4.5% per annum from the base year.

Figure 1 shows the annual trend in the headline GFR, from the 2001–02 baseline year along with the 2019–20 target. The chart highlights how this year’s above average growth has brought GFR slightly ahead of the SASP target goal for 2020.

Figure 1: Performance and target for Gross Food Revenue (GFR), South Australia 2001-02 to 2019-20 ($ million nominal)

02 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

2019

-20

2018

-19

2017

-18

2016

-17

2015

-16

2014

-15

2013

-14

2012

-13

2011

-12

2010

-11

2009

-10

2008

-09

2007

-08

2006

-07

2005

-06

2004

-05

2003

-04

2002

-03

2001

-02

$ m

illion


1.2 South Australia’s farmgate production value makes a significant gain

Following excellent growth in 2013–14, farmgate values for the production of food continued to increase in 2014–15 with a $479 million (or 11%) rise. There were positive contributions from the majority of the main industries apart from dairy, which experienced a 9% decline.

By way of summary, Table 2 shows the value changes due to the combined influence of price and volume variations.

• Field crops: Overall farmgate values rose $123 million (or 8%) from the previous year. Field crop yields and volumes generally decreased by around 10%, but farmgate prices rose 9% on average on the previous year. The farmgate value for malting barley and most pulse crops increased significantly while the farmgate value for wheat was steady. However, there was a sharp drop in the value of canola, due to a 39% price decline.

• Livestock: The overall livestock (or meat) industry experienced another extremely positive year with the production value increasing by $215 million (or 17%). Beef production led the way with a $119 million (or 30%) increase, due to significantly higher export demand and therefore prices. Sheep, lamb, goat and pig meat also attained higher prices, while the volume of both chicken and egg production continued to increase, with strong demand and outlook from the domestic market.

• Dairy: The $23 million (or 9%) decline in the farmgate value received by the state’s dairy farmers is a direct result of lower prices, with the volume of milk produced remaining at 550 million litres.

• Horticulture: Almonds was the strong performer in the horticulture industry, with volumes continuing to grow and prices doubling over the last 12 months. This price increase was driven by a significant decline in the global supply of almonds, caused by poor seasonal conditions and lower yields being experienced in California, USA, which traditionally produces over 80% of the world’s almonds. The olive industry experienced solid growth, with a significant price rise for table olives, followed by increased production in that category. Glass house horticulture production such as tomatoes, cucumbers and capsicums continue to consolidate, with most other fruit and vegetable crops remaining reasonably steady. Citrus experienced the traditional bi-annual drop in yields, with around 20% less fruit produced compared with the previous year.

• Seafood: Price increases for Southern Rock Lobster and Southern Bluefin Tuna contributed to a $15 million (or 4%) rise in the production value of seafood. However, abalone, prawns and oysters all experienced small declines.


Table 2: South Australia’s food production (farmgate value) by sector and product, year to 2014-153

Industry

Value $ million

Value % change2013-14 2014-15

Field Crops Total 1 513 1 636 8%

Wheat 988 1 024 4%

Malting Barley 86 136 58%

Other Grain 439 475 8%

Livestock Total 1 300 1 516 17%

Beef 398 517 30%

Pig-meat 179 200 11%

Sheep & Lamb-meat 460 490 7%

Chicken meat 228 258 13%

Other Livestock 35 51 45%

Dairy Total 258 235 -9%

Horticulture Total 851 999 17%

Potatoes 114 122 7%

Citrus 66 52 -21%

Almonds 105 192 83%

Other Horticulture 566 634 12%

Seafood Total 379 394 4%

Southern Bluefin Tuna 113 122 8%

Southern Rock Lobster 108 120 11%

Other Seafood 157 151 -4%

Total Primary Production 4 300 4 779 11%



1.3 Finished food reaches record level of $6.6 billion (wholesale values)

South Australia’s finished food includes post-harvest value-adding, such as packing, cleaning, cold-chain management and food manufacturing. Figure 2 shows how finished food value experienced excellent growth, rising by $785 million (or 13%), to reach a record $6.6 billion in 2014–15. The stand out growth was in meat processing with increases in the value of beef, sheep, lamb and pig meat. Most other sectors experienced small gains, while there was a slight drop in dairy processing, compared to the previous year.

Figure 2: Value of finished foods, South Australia, 2001-02 to 2014-15, $ million

Source: ABS Manufacturing & Scorecard 2015

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

2014

-15

2013

-14

2012

-13

2011

-12

2010

-11

2009

-10

2008

-09

2007

-08

2006

-07

2005

-06

2004

-05

2003

-04

2002

-03

2001

-02

$ m

illion


1.4 South Australian food exports (overseas) increase by 9 % to $ 4 billion (FOB)

During 2014-15, overseas food exports grew by $333 million (or 9%) to around $4 billion following on from the strong growth of $484 million or (15%) experienced during 2013–14.

Livestock and meat exports increased by $381 million (or 38%), which was due mainly to the $220 million or 59% increase in beef and $94 million (or 17%) increase in the value of sheep and sheep meat exports. The largest decline of $91 million (or 4%) was in field crops, due mainly to a decline in canola and wheat exports. Reasons for the overall increase in food exports include:

• improved trading conditions with the lower value of the Australian dollar, and continuing decline since the reporting period

• significant increase in the global demand for red meat, coupled with a decline in the available national supply of beef

• dairy exports regaining market share with export values returning to levels not experienced for at least three years

• horticultural exports grew by 11% to reach $226 million in 2014–15 due mainly to increase in the value of almond exports.

Overseas food exports contribute to the South Australia’s Strategic Plan Target 37 to increase the value of South Australia’s export income to $25 billion by 2020. South Australian food exports currently comprise 35% of South Australia’s merchandise trade, up from 32% last year.

Figure 3 shows trends in food exports for both commodities and finished foods over the past decade. These trends underscore the variability of South Australia’s commodity trade (for example, grains), which is highly seasonally dependent, compared to the more stable levels recorded in finished food exports. However, finished food exports have performed well in the last two years. Finished food exports increased in 2014–15 by $403 million (or 25%). Meat exports were the key factor for this growth, with an increase of $368 million (or 91%) of the overall increase in the finished food export value.

Figure 3: South Australia’s food exports (overseas): Commodity and finished foods, 2001-02 to 2014-15, $million (FOB)

Source: ABS Trade Data & Scorecard 2015

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2014

-15

2013

-14

2012

-13

2011

-12

2010

-11

2009

-10

2008

-09

2007

-08

2006

-07

2005

-06

2004

-05

2003

-04

2002

-03

2001

-02

$ m

illion

CommodityFinished Food

1 240

1 743

1 195

1 128

1 103

1 078

1 064

622

1 038

708

1 143

554

1 207

809

1 324

1 055

1 213

916

1 289

2 177

1 308

2 365

1 307

1 880

2 033

1 971

1 630

2 041


Figure 3 shows a $403 million (or 25%) increase in finished food exports and a $70 million (or 3%) decrease in overseas commodity trade over the past year.

Table 3: Overseas exports of South Australia’s food, growth in selected commodities and finished foods, 2001–02 to 2014–15

Value $ million Average Annual % Change

2014-15 2013-14 to 2014-15 2001-02 to 2014-15

Grains 1 902 -4% 1%

Livestock 69 23% -3%

Total Commodity Exports 1 971 -3% 1%

Grain Products 123 -6% 2%

Fruit & Vegetables 225 11% 5%

Seafood 244 3% -5%

Meat 1 326 38% 9%

Dairy Products 43 107% -2%

Other 72 -9% 3%

Total Finished Food Exports 2 033 25% 4%

Total Food Exports 4 004 9% 2%


Table 3 provides greater detail on the growth in overseas exports, outlining contributions by key products, defined by either their commodity or finished food status. Declines in the commodity grains are due mainly to the canola export value reducing by $116 million (or 39%). Grain product exports declined with the value of malt exports falling $17 million (or 24%). An increase in almond exports is the key reason for horticulture finished food exports rising by $22 million to $120 million. Southern Bluefin Tuna accounted for the majority of the seafood finished food export growth. Meat and livestock finished food exports increased by $368 million (or 38%). The key sectors responsible for this increase are in beef exports, which grew by $231 million and sheep exports, which rose by $72 million. Both of these sectors accounted for $1 168 million (or 88%) of the total meat and livestock finished food exports. Dairy exports grew by $22 million (or 107%) with cheese exports being the reason for the return to export levels experienced prior to 2012–13.


Figure 4 shows the leading destinations of food exports from South Australia over 2014–15. South Australia exported food to 95 countries, down from 110 countries in 2013–14. The United States of America (USA) is South Australia’s largest food export market with $647 million (or 17%) share of all food exports. The majority of exports to the USA are meat, which accounted for 91% of food exports to that destination. Other key food export destinations include Indonesia, which is worth $385 million (or 10%), and China and Hong Kong, which is worth $309 million or (8%). Combined with the USA, these three destinations contributed 35% of the total value of South Australian food exports in 2014–15.

The value of South Australian food exports to USA more than doubled, compared to the previous year, while food exports to Indonesia rose 15% and China and Hong Kong continues to be a key export market.

1.5 Retail and hospitality sales reach $9.8 billion

Figure 5 below shows the ongoing growth in 2014–15 of the food retail and hospitality sectors. Sales increased by $302 million (or 3%) to reach a total of $9.8 billion.

Figure 5: South Australia’s food retail and food service sales 2001-02 to 2014-15, $ million

0

100

200

300

400

500

600

700

Egypt Belgium UAEMalaysia India NewZealand

Vietnam Japan Chinaand HK

Indonesia USA

$ m

illion

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 00010 000

2014

-15

2013

-14

2012

-13

2011

-12

2010

-11

2009

-10

2008

-09

2007

-08

2006

-07

2005

-06

2004

-05

2003

-04

2002

-03

2001

-02

$ m

illion

Hospitality salesRetail sales

4 086 4 375 4 552 4 879 5 199 5 359 6 033 6 589 6 527 6 689 6 896 7 307 7 520 7 858

1 1721 318 1 395

1 410 1 453 1 365

1 606

1 758 1 724 1 763 1 857 2 025 1 9851 949

Figure 4: Leading destination for South Australia’s food exports, 2014-15


2. SUMMARY AND OUTLOOKIn 2014–15, the South Australian Gross Food Revenue surged ahead by over $1 billion on the back of extremely strong performances in the meat and livestock sector and solid performances in most finished food sectors.

For the second consecutive year, the overall finished food value and finished food export value have experienced extraordinary growth. This year’s growth has been driven mainly from the meat processing sector, not withstanding, that most other food processing sectors are consolidating and showing signs of improving their performance.

The growth experienced at the final stages of the value chain is also flowing down to the farm or production level. Almonds, beef, chickens, pigs and Southern Rock Lobster are some of the sectors that have experienced double digit growth.

The declining value of the Australian dollar has certainly been beneficial to South Australian food exporters and the food industry over the last two years. During the first half of 2014–15 financial year, the Australian dollar declined 14% against the US dollar and 8% against the Trade Weighted Index. The decline in the second half of the year was somewhat less at 6% and 3% respectively. It is important to note that since July 1 2015, the Australian dollar has continued to decline with another 8% and 5% decline against the US dollar and Trade Weighted Index respectively.

This more competitive foreign currency exchange rate, coupled with the combined effort of industry and Government to identify growth opportunities, enhanced trade and attract investment, has placed the South Australian agriculture and food industry in a strong position to continue the excellent growth experienced over the last two years, into the foreseeable future.


3. GLOSSARY OF TERMSFarmgate

This measures the value of a commodity at the local level of production, which is known as farmgate. Farmgate value is calculated by multiplying the volume of production by the price received. This represents the value of production to the farmer or fisher person.

Finished Food Value (measured in wholesale prices)

This measures finished food – the value of foods and beverages that are processed at their highest level of processing in South Australia. Finished foods may be minimally or highly processed and the value is represented by their wholesale price into the retail or export markets.

Food Retail Sales

Food Retail Sales measures the value of food sales made through all retail stores including supermarkets and grocery stores, takeaway food, meat, fish, poultry, fruit and vegetable retailing, liquor retailing, bread and cake, and specialist food retailing.

Food Service Sales

Food Service Sales measures the value of sales of food and beverages through restaurants, hotels, and tourism operations within South Australia. The calculation estimates the percentage of total sales that occur through these outlets. Prices used in this calculation are usually higher than those used at the retail level.

Free on Board (FOB)

Free On Board (FOB) is the price of a commodity or product received by a supplier, including all costs incurred in getting the commodity or product to the port of departure, at which point the buyer takes responsibility of the costs.

Gross Revenue

An aggregate measure of revenue that includes international and interstate food and beverage exports and the value of food and beverage retail and service sales contributing to the South Australian economy. It is calculated by taking the sum of overseas export value (commodity and processed), interstate trade value (commodity and processed), food retail sales and food service sales. Gross revenue can be used in reference to food, wine or food and wine combined.

Interstate Sales – Commodity and finished food

This represents the difference in the value of goods exported interstate from those imported from interstate. A positive value represents net interstate exports – for example exports exceed imports. A negative value represents net interstate imports – for instance, imports exceed exports.


Overseas Commodity Exports

This measures the value of overseas exports of agricultural commodities sold overseas by South Australian firms, calculated by using free on board prices. Commodity exports are products that have a minimal change from their natural form – for example, live animals or bulk grain.

Overseas Imports – Commodity or finished food

This measures the value of either agriculture commodities or finished food products that are purchased from overseas. Import volumes and values are quantified at their South Australian landed value (at the port of shipment).

Overseas Finished Food and Wine Exports

This measures the value of overseas exports of food and wine products sold overseas by South Australian firms, calculated by using free on board prices. Finished food and wine exports are commodities that have had further value added from the point of production. For example, meat, wine, packed fruit and vegetable or fish.

South Australian Strategic Plan (SASP)

The South Australian Strategic Plan (SASP) guides individuals, community organisations, governments and businesses to secure the wellbeing of all South Australians. South Australia’s Strategic Plan contains the State’s visions and goals and its 100 measurable targets reflect our priorities. The SASP identifies priorities for South Australia.

Value Chain Measures

Value Chain Measures include all measures or indicators that are used along the value chain from the farmgate through the chain to the final point of sale.


Food and Wine ScoreCard 2014-15© Government of South Australia 2015

Primary Industries and Regions South AustraliaLevel 14, Grenfell Centre25 Grenfell StreetAdelaide 5000South AustraliaT: +61 8 8226 0900www.pir.sa.gov.au

Documents

Food ScoreCard 2014-15 - Department of Primary … FOOD SCORECARD 2014-15 To track the advances in the South Australian food and wine industries, Primary Industries and Regions South