2000/01 Food South Australia ScoreCard Report

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Over the last year substantial growth and record levels were achieved in all agri-food performance areas, as detailed in the Council paper.

The 2000/01 ScoreCard shows above average annual growth in most of the key performance indicators. Gross State food revenue increased by 15.3 percent to reach $8.33 billion. Falling imports led to an even greater increase in the net State food revenue measure which grew 19.2 percent to $7.45 billion.

Figure 1: On Track to Reach $15 billion by 2010 - Gross State Food Revenue, Target, Underlying Trends and Performance to Date, 1996/7 to 2000/2001.

Overseas exports of food products were $2.16 billion during 2000/01. This compares with $1.54 billion in 1999/00, or $617 million (40%) growth over the year.

The value of commodity exports at $1.13 billion increased by 70% and it is pleasing to note that processed food exports grew 18% to $1.03 billion.

[In addition to food exports of $2.16 billion, non food exports include other field crops such as feed grains, fodder and seed ($0.26 billion), wool & skins ($0.24 billion) and wine ($1.1 billion). Total agriculture related exports therefore total $3.76 billion, which represents 45% of total SA merchandise exports.]

Combined with interstate exports of $1.08 billion, total interstate and overseas exports totalled $3.24 billion, representing a huge step toward meeting the export challenge.

A short term export target of $1 billion growth in interstate and overseas exports by 2004, has been bridged to $300 million. However, some of the latest increases are due to exceptional growing conditions. If average growing conditions had occurred the export gap would be $500 million.

Indeed, caution should be used in interpreting the 2000/01 ScoreCard results. The coincidence of above average seasonal growing conditions, strong export demand, higher than average export prices, a favourable exchange rate, and the impact of the GST, all contributed to the results. These factors may be short-term in nature, and do not necessarily represent a permanent or structural change to the State's agri-food prospects.

Future prospects are subject to export demand, seasonal conditions and exchange rates. But it remains clear that an increase in processed exports is necessary to reach targets. To enable this to happen, continued growth in the value of processed foods needs to continue that will need require new capital investment. We need to maintain the momentum that is building.

There are indications that we can do just that:

• Demand strength and world supply shortages for some products may support export returns which could defy even a rising exchange rate
• There was an 18% growth in processed exports which maintained will fuel the growth to achieve the $15 billion target by 2010
• There was an increase in both processing turnover and new capital investment
• The increase in farm gate prices and returns is contributing to improvements in regional economies, creating an ideal opportunity for investment in innovative value adding in these regions.

In summary, the following issues emerging from the latest ScoreCard analysis need continued and persistent attention:

• There remains heavy reliance on commodity exports, however there is scope for greater value adding eg. field crops
• Though increasing, food processing would be further strengthened by addition of new value-added export chains, including better integration between production, processing and marketing
• Access to investment capital has also been highlighted as a problem for the Australian food industry
• Employment in food manufacturing is not showing growth commensurate with increased value of exports and sales in domestic markets.