Read the full ScoreCard report 2004/05 (pdf file, 218 kb)
You may need to download the Adobe Acrobat Reader to read this file.
Growth in the South Australian food industry and targets for the State Food Plan suffered a setback for the 2004-05 year due to a sharp decline in commodity exports, but domestic food sales continued to grow.
Overseas trade, especially in grain and seafood exports, continued to face the twin hurdles of low import prices and higher export prices associated with a relatively strong Australian currency. Despite this, processed meat and dairy product exports showed marked improvement, with horticulture and processed grain exports remaining reasonably steady. Imports from both overseas and interstate remained strong rising $205 million or 17 percent.
The 'headline' gross food revenue figure rose slightly, from $9.14 billion in 2003-04 to $9.16 billion (up by $19m or 0.2%). Key to this modest improvement was growth in domestic food consumption (up $342m or 6%), with the all-important overseas export figure falling by $494m (down by 23%) to $1.68 billion. However, interstate sales rose by $171 million or 5.7 percent.
Despite a small rise in gross food revenue over 2004-05, the figure managed to slip below the historical trend of 4.9 percent growth per annum since 1996-97. This puts it around $1.5 billion below the necessary level to achieve the target of $15 billion by 2010. To reach the target, South Australia’s gross food revenue now needs to grow by 10 percent (or by nearly $1 billion) per annum.
Gross State Food Revenue, Target, Underlying Trends and Performance to Date, 1996-97 to 2004-05
At the farm level, food production had mixed results, with ‘below average’ seasonal conditions producing well below average quantities of grain, contributing to an overall fall in farm gate values (down $424m or 14%) to $2.5 billion. Livestock and dairy recorded modest gains in farm gate value of 11 percent and 4 percent respectively, while the farm gate value of field crops and wharf gate value of seafood declined by 42 percent and 27 percent respectively. Horticulture remained steady despite fluctuations in various sectors.
The 23 percent fall in overseas exports was overwhelmingly influenced by the enormous fall (42 %) in commodity exports. Grain exports declined to levels not experience for several years due to the effects of the lower volume of grain available for export (63% of 6 year average) and a lower price (20% lower than two years ago).
Value-added or processed exports held their own, with only a 3 percent (or $38 million) decline from last year. Pleasing growth was achieved from meat exports (up 14% or $60 million) and also dairy product exports which rose 40 percent to $64 million. Seafood exports, however, performed poorly with a decline of $95 million (or 24%) compared to 2003-04.
It is obvious that the extremely poor results from commodity exports are having a damaging effect on the overall results of the South Australian food industry ScoreCard in relation to the Food Plan target. Even an average result in commodity exports (around $1 billion) would have seen the gross food revenue reach a level much closer to the necessary target level. The challenge for the Food Plan is to continue to ascertain ways and means of converting more of the large quantities of high quality commodities (eg grains) into higher valued specified products which are less reliant on seasonal and global spot market conditions.
On a brighter note, domestic sales of food within South Australia continue to accelerate at a very high rate. This should not be overlooked as a positive step flowing from the Food Plan as retail and service sales currently contribute 65 percent (or $6.3 billion) to the gross food revenue. The high growth in retail food sales could be attributed to the consumer demand for higher value food products and the greater emphasis being placed on purchasing more prepared or semi- prepared foods.
Employment across the food industry value chain has fallen from the record levels of 2003-04 (10,000 or 8%) to 132,800.
Over 2004-05, private new capital expenditure in the food and beverage industries fell by $15 million (down 3%) to $441 million.