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The South Australian food industry partially recovered in 2005-06 from below average performance in 2004-05, with the ‘headline’ gross food revenue figure rising from an adjusted $9.4 billion in 2004-05 to $10.1 billion, up by $710 million or 7.6%.
Commodity exports were up by 14% to $686 million, processed seafood was up by 6% to $319 million and horticulture exports rose 33% to $128 million, all contributing to the better than average results. Low import prices and higher export prices associated with a relatively strong Australian currency remained a feature in the 2005-06 trading environment.
The value of processed meat and dairy overseas exports was down, however interstate sales of meat, grain and dairy products were up due to domestic demand growth in interstate markets and an increase in the volume of South Australian product transferred across State borders for shipment to overseas destinations through interstate ports. Food imports from overseas and interstate remained relatively strong, rising $142 million or 9%.
The main contributors to gross food revenue were domestic food consumption (up $363 million or 6%) and exports, which recovered to $1.79 billion (up by $104 million or 6%).
Interstate sales growth was also a strong contributor, up by $242 million or 17.6 percent to $1.6 billion, nearly reaching the value of overseas exports.
Gross State Food Revenue, Target, Underlying Trends and Performance to Date, 1996-97 to 2005-06
Gross food revenue gains brought growth rates back above the historical trend line of 4.9% p.a (representing average annual growth in the period prior to commencement of the State Food Plan).
In spite of the partial recovery, however, gross food revenue is $1.4 billion short of the outcome required to achieve the State Food Plan target of $15 billion by 2010. A growth rate of 11% p.a. for the next four years – or an additional $1.25 billion a year – would be needed to reach the target.
Food production volumes and values were generally up at the farm level, with values increasing 10% to $2.8 billion, recovering and gaining against the 14% decline to $2.5 billion in 2004-05.
Field crops, horticulture and seafood recorded the strongest improvements in farm gate / wharf gate value of 35%, 11% and 23%, respectively. Dairy was up by 9% and livestock was down 8%, due principally to price factors, with production volumes remaining relatively steady.
South Australia’s food sector performance continues to rely heavily on commodity outcomes, which are highly dependent on weather and spot market conditions.
The brief climatic respite in 2005-06 contributed to improvement in overseas and interstate commodity exports by 29%. Value-added or processed exports grew 4.3% over the year and also increased as a share of overall exports, from 58% to 65%. Processed overseas seafood exports were up 5% to $318 million, led by rock lobster and bluefin tuna price improvements in key Asian export markets.
While 2005-06 was a year of partial recovery to growth levels above historical trend performance, current climatic conditions foreshadow a difficult year ahead, a likely decline in ScoreCard outcomes for 2006-07 and an increase in the gap between performance and Food Plan targets.
The challenge for the next 2007-2010 Food Plan will continue to be finding new ways to add value and convert South Australia’s high quality commodities (e.g., grains) into higher valued products that are less subject to seasonal conditions and global spot market prices.
Growth in domestic sales of food within South Australia remained strong. Retail and service sales grew by 6%, contributing 65% or $6.7 billion to gross food revenue in 2005-06.
The continuing trend in consumer demand for higher value food products and a greater emphasis on purchase of prepared or semi- prepared foods underlies the ongoing growth in retail food sales and employment in the retail and food service sectors.
Over the 10-year period of ScoreCard data collection, the number of full time equivalent (FTE) jobs across the food industry value chain in South Australia has fluctuated, but remained relatively stable over time. In 2005-06 the ABS reported 136,100 FTE positions in the industry compared with 132,800 last year and 136,500 in 1996-97.1
Technology improvements and consolidation in primary production sectors and growth in domestic food consumption have contributed to a shift away from primary activities employment (23% of total jobs in 2005-06 compared with 34% in 1996-97) to jobs in the retail and food service sectors, which now represent over 60% of all industry jobs compared with about 55% a decade ago.
During 2005-06, private new capital expenditure in the food and beverage industries increased by $33 million (up 7%) to $474 million.
1 ABS Labour Force Survey is subject to various levels of Standard Error. Caution should be taken when making actual comparisons with previous years. Food Employment excludes transport/other secondary activities.
Since release of 2005/06 ScoreCard reports, an error in the underlying worksheets in the 2005/06 almond production volume has been corrected. The impact on overall 2005/06 Food ScoreCard outcomes is insignificant. The correction also affects the Riverland, Northern Adelaide and Fleurieu Regional ScoreCards. For further information on the impact please contact, PIRSA ScoreCard Team.