VALUE ADDING TO AGRICULTURE IN CENTRAL WEST NSW
A NSW Government Initiative // This report has been prepared by: Regional Development Australia Central West Suite 4, 59 Hill Street (PO Box 172) ORANGE NSW 2800
// With funding from:
// Date published: September 2016
// Author: Julia Andrews, Project Officer, RDA Central West
// Additional analysis provided by: A.P. Sheere Consulting
// About Regional Development Australia Central West Regional Development Australia — Central West is part of a national network of 55 locally managed, not-for- profit incorporated associations and is jointly funded by the Australian and NSW Governments. Our region extends from Lithgow in the east to Lake Cargelligo in the west and comprises the local government areas of Lithgow, Oberon, Bathurst, Blayney, Orange, Cabonne, Cowra, Parkes, Forbes, Weddin and Lachlan.
// Contributing agencies and sponsors:
A NSW Government Initiative A.P. Sheere Consulting
Newcrest Mining’s Cadia Valley Operations contributed to this project as part of its Community Partnerships Program.
// Disclaimer This report was produced by RDA Central West and does not necessarily represent the views of the Australian or NSW Governments, their officers, employees or agents.
// Front cover: Ed Fagan, Cowra Photo by Kate Barclay
// Publication design: Sauce Design Contents
Introduction 5
Scope and Purpose 6 Methodology 6 Key Observation Highlights 7
Part 1 8
Value Adding 9
Biotechnology 11 Functional Foods 11 Protein and Animal Feed 15 Bioenergy 18
Digital Technology 20 The Digital Divide 20 Digital Platforms connecting agribusiness to capital 20 E-Commerce 22 Traceability 23
Processing and Packaging 24 The strength of Central West NSW fruit and vegetable processing 25 The decline of Central West NSW meat processing 27
Branding 29 Regional Branding 29 Industry or Sector Branding 29 A Central West NSW Brand 30 “Clean & Green” 31 The Organic Difference 32
Collaboration and Co-operation 34 Collaboration 34 Co-Operatives 37
Export Opportunities and Trade Agreements 40
Part 2 43
Central West NSW — an overview 44 Blurred Boundaries 44 Agricultural land and sector characteristics 45 Agricultural Production 47 Gross Regional Product 48 Employment 48 Agricultural Jobs 49
/ Value Adding to Agriculture in Central West NSW / 3 Livestock 50 Sheep 50 Beef 51 Pigs 51 Poultry — meat 52 Poultry — eggs 52 Goat 53 Deer 54 Alpaca 54 Export Opportunities 54
Horticulture 56 The changing wine industry in Central West NSW 57 Protected Cropping 58 Export Opportunities 59 Irradiation 61
Dairy 62 Export Opportunities 63 Investment in Dairy 63
Wool 65 Alpaca fibre in Central West NSW 66 Export Opportunities 66
Broad-acre cropping 67 Export Opportunities 69
Survey Analysis 70
Key Observations 72 Jobs & Skills 72 Agricultural Sectors 72 Export Opportunities 72 Regional Innovation Hubs 72 Biotechnology 73 Digital Technology 73 Processing and Packaging 73 Branding 73 Collaboration and Co-operation 74 Freight and Logistics 74
Bibliography 75
4 / Value Adding to Agriculture in Central West NSW / Introduction
This study was born of a The Central West and The Central West currently mutual recognition across key Orana Regional Plan (Draft) exports 65% of its agricultural stakeholders and government specifically states that; “the NSW production in commodity bodies in the region, including Government will work with form.2 This shows that despite Regional Development Australia Regional Development Australia the number and variety of Central West, NSW Department Central West and Industry NSW to agribusinesses and food of Industry (Western NSW), prepare and implement a value- enterprises, the majority of the Department of Premier adding strategy for the Central wheat, livestock and horticultural and Cabinet and Central NSW West area.” products currently leave the Councils (Centroc), that a food region without additional and fibre strategy was needed Debate rages over whether value adding. to ensure a sustainable, diverse agriculture will replace mining agricultural economy reflecting as Australia’s next big boom This report reviews current the changing global landscape. to become the “food bowl of agricultural value adding tends Asia”. There is, however, general and opportunities in Central West In 2016, NSW Department consensus that, due to the NSW, with particular focus on of Planning and Environment growing Asian middle class, the categories of biotechnology, released two reports relating to a well-managed Australian digital technology, processing agriculture and broader regional agriculture has a bright future. and packaging, branding, and development and planning for co-operation and collaboration. the Central West and Orana Agriculture represents 7.7% of The report relies heavily on the regions; Central West NSW’s GRP and is a case studies of Central West 1. Central West and Orana key industry for the region.1 agribusinesses. Agricultural Industries Report (Jan 2016) 1 Regional Development Australia Central 2 Ibid 2. Central West and Orana West (2014) NSW Central West Export/ Import Contribution Study Regional Plan Draft (April 2016)
/ Value Adding to Agriculture in Central West NSW / 5 Scope and Purpose
The purpose of this report is to The most significant aspect of business information including provide deeper analysis of the the project was the interview approximate annual turnover, agriculture sector in Central West stage, which involved face- number of staff, location and core NSW including the current value to-face meetings with over business type. The survey asked adding landscape. This report twenty regional agribusinesses. participants why their business assesses trends across various Individual case studies and was based in Central West agricultural sectors, considers business perspectives form a NSW and the advantages and domestic and international key component of the report. disadvantages of their location. market demand trends and All interviews were followed Participants were also asked factors such as Free Trade up with phone calls and emails to describe any value adding Agreements that may impact and subjects were given the activities they were currently future growth, and identifies opportunity to proof read engaged in or planned to promising opportunities to transcripts of their interviews engage in. increase the extent of value- to ensure no information of adding in niche areas. This report a commercial in confidence Over 100 surveys were relies heavily on the experiences nature was revealed. Developing distributed through various and insights of regional and maintaining trust with local food and agribusiness networks agribusiness case studies. businesses was imperative in including RDA Central West’s order to ensure meaningful own database, Agribusiness Methodology participation in the process. Today forum members (including regional LLSs), Farmers’ Markets The first stage of this report During the case study process, networks and through RDA involved the completion of a four key agribusinesses were Central West’s social media comprehensive literature review selected to be interviewed, pages (Twitter and Facebook) and desktop study. Sources used resulting in the production of and newsletter. Surveys include industry and academic a two-minute video showcase completed and returned for research papers, government designed to be used on a analysis represented a range reports and media commentary variety of mediums to promote of agricultural sectors and covering regional, national and investment and agribusiness in businesses including dairy, meat, global issues relating to the Central West NSW. horticultural and grain producers, broad field of value adding to organic farmers, wine producers, agriculture and current trade The five key “value-adding” bee keepers, cheese makers, opportunities. Please refer to categories featured in this fibre and meat processors and the bibliography for a full list report (biotechnology, digital packaging enterprises. of sources. technology, processing and packaging, branding, and The second stage involved collaboration and co-operation) stakeholder consultations were identified as a result of the including State and Federal stakeholder engagement and Government departments, individual business case studies. research and academic institutions, banks, industry The final stage of the project bodies and individual businesses. involved the development, Please refer to the stakeholder list distribution and analysis at the end of this document for of an on-line survey. The more information. survey established basic
6 / Value Adding to Agriculture in Central West NSW / Key Observation accessibility to major centres; supply chain may present Highlights // Existing industry confidence opportunities for some niche in the region with two private sectors. Jobs & skills enterprise biotechnology ventures already operating; Investment in innovative Although it is one of the most // The location of the NSW processing and packaging R&D important sectors and employers Department of Primary and infrastructure may create in the region, jobs are shrinking in Industries; new opportunities for both agriculture in Central West NSW. If // The region’s close ties with domestic and export value the region is to leverage the value Charles Sturt University adding to a broad range of adding opportunities afforded and the Graham Centre for agricultural sectors in the region. by the predicted growth of the Agricultural Innovation; agricultural industry, it will have // The region’s attractiveness Branding to consider the consequences to higher skilled workers and develop strategies to manage (affordable housing, cost A unified approach is needed,in shrinking jobs and skills gaps. of living, work/life balance, collaboration with existing schools and higher educational destination marketing, to Export and domestic facilities, medical services and regional branding between Local markets specialists and culture.) Government Areas, Regional // The region’s status as one Tourism Organisations and Considerable growth demand of seven “centres of regional agricultural stakeholders to expectations in middle class growth” Australia-wide develop an authentic, effective Asian markets, and various expected to contribute over regional agricultural brand. trade agreements with those $15b to the national economy regions, will create significant in 2031.3 Maintaining and protecting our opportunities for Central West “clean and green” reputation agricultural products, including Digital Technology is critical to the region’s ability premium pre-packaged cuts of to command high global meat and fresh, packaged or Advances in digital technology prices for agricultural products. processed horticultural produce, are creating myriad opportunities International competition to be which are key strengths of the for on-farm and post farm “clean and green” means Central region. gate value adding. There is an West NSW needs to remain urgent need for robust, future- vigilant and unified in this space. The ability to transport produce proof and wide-reaching by air from Canberra to telecommunications capabilities Collaboration & Co-Ops Singapore — and 11 Chinese cities in Central West NSW, specifically connected through Singapore — the rectification of mobile There may be a need for is a potential game-changer for blackspots and sufficient NBN continued advocacy to ensure agricultural exports from Central capacity, without which the regional agricultural co- West NSW. agriculture sector will not be operatives are not excluded for able to grow domestically or eligibility for government grants Biotechnology compete on an international on the basis of their business Innovation Hub level. Growth in the region is structure. currently stunted by inadequate Central West NSW is ideally telecommunications. Freight and logistics placed to be an Innovation Hub for research and the application Processing and Packaging Connectivity to market is a key of biotechnology in agriculture challenge for Central West NSW due to: Processing weaknesses in the agricultural SMEs. // The region’s diversity of high Central West NSW agricultural quality agricultural produce; For a full list of key observations // The region’s proximity and 3 Commonwealth Government, (2016) see pages 72–74. Australian Infrastructure Plan, pp 60–61
/ Value Adding to Agriculture in Central West NSW / 7 Part 1
// Agritechnology, Borenore. Photo Kate Barclay. 8 / Value Adding to Agriculture in Central West NSW / Value Adding
Value-adding includes any // Precision agriculture5 is In Central West NSW, process or service in the supply creating opportunities for organisations such as the farmer- chain that adds to or enhances farmers to optimise returns driven Central West Farming the value of products to on inputs while preserving Systems exist to trial and research customers. Value-adding may resources; new farming methods and include supplying new products // Intensive livestock farms innovations, to share knowledge or different varieties, changing can earn carbon credits by and create valuable farming and presentation to meet market capturing methane gas for agribusiness networks. Local requirements, providing expertise the Government's Emissions Land Services bring together and/or services and promotion Reduction Fund, and many are agricultural production advice, and marketing activities to converting biogas into energy. biosecurity, natural resource differentiate products.4 management and emergency With these technological management into a single Value adding to agriculture is opportunities come challenges, organisation. NSW Farmers’ about finding ways for farmers such as the continued struggle “AgInnovators” is a news and and agribusinesses to move for farmers and regional information site designed to from being “price takers” to communities to have adequate connect the world of technology, “price makers”. telecommunications capabilities business and communication to take advantage of new with leading agricultural thinkers. In agriculture, value-adding can technologies and growing be achieved on-farm, post farm data needs. While, on-farm value adding gate, or as a combination of the represents significant two. On-farm value adding can In keeping with its Innovation opportunities for agriculture in be achieved through harnessing Agenda, the Federal Government the Central West, the main focus science and new technologies has developed a “Farming of this report is post farm gate to create greater efficiencies and Smarter” section within the value adding. cost competitiveness in farm 2015 Agricultural White Paper, production. For example; addressing the need for Australian Key Observation // Advances in biotechnology agriculture to continue to have are increasing the genetic access to the most advanced While farmers and performance of animals; farming technologies and agribusinesses continue // Increasing competition and practices, as well as the skills to strive towards cost cost of labour is leading to the and labour to drive innovation efficiencies, largely through development and adoption of and growth. digital and bio technological new technologies, software, advances, they struggle to mechanisation and robotics; 5 “Precision agriculture provides the compete with Asia on price means for measuring the variability competitiveness. However, observed in crop yield and quality 4 Commonwealth Department of parameters. Precision agriculture tools they can compete on quality Agriculture, Fisheries and Forestry (1999) also provide the means for site specific and uniqueness — by value Increasing Value-adding to Australia’s raw crop management and when combined adding to their product and/ materials. with traditional agronomy tools, can lead to improved crop yields, quality and or marketing and ensuring efficiency of crop production.” Society that quality and authenticity of Precision Agriculture Australia (2014) Strategic Plan, available from http://www. can be verified and traced. spaa.com.au/strategic-plan.php
/ Value Adding to Agriculture in Central West NSW / 9 Agricultural sectors are One of Central West NSW’s increasingly realising the value of most significant agribusinesses, moving away from “commodity- MSM Milling in Manildra, is a based” marketing and into more commodity based (canola) “value-based” marketing in order business with a growing focus on to ensure long term profitability value-adding, through research and sustainability. and development and packaging and processing, to its high quality The Cattle Council of Australia, vegetable oils and stock feed. for example, recently released its five-year industry assessment Post farm gate value adding advocating for a shift towards can be achieved through ‘value chains’ rather than ‘supply various methods. As a result chains’ and the production of of consultations with regional beef that is ‘fit for a purpose’. stakeholders and agribusinesses, The plan describes the needs the following value-adding of consumers from paddock categories have been developed to plate as the foundation of a and will be further explored in comprehensive industry plan this report; aimed at building long-term profitability into grass fed beef production.6 Value adding through 6 Cattle Council of Australia (2015) Biotechnology National Strategies for Australia’s Grassfed Beef Sector, available from http://www. cattlecouncil.com.au/assets/documents/ Beef%202015%20and%20beyond.pdf Value adding through Digital technology
Value adding through Processing & packaging
Value adding through Branding
Value adding through Collaboration & co-operatives
10 / Value Adding to Agriculture in Central West NSW / Biotechnology
“Bioscience is critical for the world not just for the Central West. We need to develop systems to add value to horticulture, agriculture, food waste so that we can reuse, recycle all of those things we need to do; we all know we need to do them. Bioscience gives us a natural means of doing that.”
— Derek Robinson, Business Development Manager, Agritechnology
Agribusiness can add value to reduced chemical use or through between diet and health, and products by harnessing science the development of alternative the move towards preventative to create greater efficiencies, cost fuels (biofuels) made from plant health and wellness in an competitiveness and premium and plant-derived resources. ageing population. products. After conducting primary Functional foods may include, for According to the Convention research through consultation example, high antioxidant fruits on Biological Diversity, with local agribusinesses and such as the Queen Garnet Plum, biotechnology refers to “any secondary research through a new plum variety developed technological application that international market analysis, by the Queensland Department uses biological systems, living three areas of opportunity for of Agriculture, Forestry and organisms, or derivatives thereof, Central West NSW agriculture Fisheries. It may also include to make or modify products or in biotechnology have been value added food ingredients processes for specific use”.7 This identified; such as oils, vinegars, whey may include, for example, using 1. Functional Foods protein powders, freeze dried bacteria to make yogurt, cheese, 2. Protein and Animal Feed powders and yeasts. and vinegar, or the use of plant or 3. Bioenergy animal cross-breeding techniques “I believe that in the future we to produce stock with enhanced Functional Foods will have grain varieties with qualities. Biotechnology includes, enhanced health properties but is not limited to, genetic Increasingly, biotechnology is that will attract a premium in modification (GM). playing a role in value adding the market.” through the development of Biotechnology has a critical agricultural products with greater — Professor Chris Blanchard, role to play in helping to deal health benefits. Functional Grains Centre, Wagga with emerging challenges Wagga facing agriculture, including “Functional foods” or climate change, pressure on “nutraceuticals” are food products Key Observation global food supplies and the that have been manipulated in management of pests and order to deliver perceived health Agricultural sectors in diseases. Biotechnology can also benefits to consumers. Functional Central West NSW with benefit the environment, through foods are a growing field in significant “functional foods” food science and biotechnology potential include grain 7 Ruame, J. (2001) Agricultural due to advances in technology, and oil seeds, horticulture Biotechnology for developing countries, Food and Agriculture Organisation of the health-conscious consumer and dairy. United Nations interest in the relationship
/ Value Adding to Agriculture in Central West NSW / 11 engineering support we need to run a plant here — the Central West still allows us to have access to all of that.”
Agritechnology has formed wholly owned subsidiaries and joint-venture companies to further the commercialisation of a number of its discoveries. One such company is Australian Functional Foods Pty. Ltd. (AFF). Using technology developed by Agritechnology, AFF processes // The Agritechnology site was originally a vineyard. fresh fruit and/or vegetables into premium healthy functional and nutraceutical food and beverage Case Study: Agritechnology — harnessing science to products. create new agrifood opportunities Being located in a major cherry Agritechnology is a bioscience “Agritechnology is a world class growing region where second company developing new outfit, our market is global,” says grade cherries represent about products and processes Derek. “Our customers come 20–50% of the annual cherry for clients in agriculture, from all around Australia for crop, Agritechnology recognised nutraceuticals, biofuels, and our continuous fermentation the opportunity to value add food and beverage production. expertise particularly. to the significant cherry waste Agritechnology is a business that stream in the region by extracting Overlooking the rolling hills of allows us to pursue real science, nutraceutical compounds and the Orange Wine Region, the real business opportunities and converting waste cherries Agritechnology HQ originally yet still live in such a great place. into food. functioned as a vineyard and There’s about thirteen of us on winery. Over the years, the site in Orange, it varies a little Cherries have substantial levels vineyard business was scaled bit project to project. People of anthocyanin (an important back and the bioscience work are drawn literally from all over antioxidant) with nutraceutical scaled up on location. The the world. We have people from properties including for gout, winery infrastructure and Pakistan, French Reunion, from inflammation and other health equipment now forms part of India, from China. We have benefits. Cherries are also a the plant used for bioscience brought people back to Australia recognised low-GI food and research and production. from Sweden who are working cherry-derived products appeal over there. It’s quite a melting to the diabetic market in “Bioscience is critical for the pot here.” particular. world, not just for the Central West,” says Derek Robinson, “Our physical location is The Agritechnology team Business Development Manager fantastic for us. We are an R&D applied its expertise in food at Agritechnology. “We need to company that works with fruits science to develop a process to develop systems to add value and vegetables, [and] with [the] create a cherry juice with shelf to horticulture, agriculture, food grain belt. Where we are we stability, high yield, good texture waste so that we can reuse, have got canola and wheat and flavour and high levels of recycle all of those things we within an hour, and we’ve got anythocyanin. The team also need to do, we all know we need fruit and vegetables just over developed a functional food from to do them. Bioscience gives us a the hill. Mixed horticulture, it’s the cherry waste in the form natural means of doing that.” fantastic for us. But more than of a powder with a strong red that we’ve also got access to the colour, intense cherry flavour, and
12 / Value Adding to Agriculture in Central West NSW / antioxidant profile demanded by ingredient distributors and food manufacturers.
“I think there’s a recognition that agribusiness and adding value to our agricultural production is attractive in the investment world generally at the moment. Orange is seen as an R&D base and the Central West is seen as a ‘hub’, so that works to our advantage in attracting investment as well.”
— Derek Robinson, Business Development Manager at Agritechnology.
// The Agritechnology team. Photo Kate Barclay.
/ Value Adding to Agriculture in Central West NSW / 13 Case Study: Botanical Innovations — the fusion of Global trends and technology and botany market opportunities for Functional Foods Botanical Innovations, a biotech The company can manufacture start-up based in Orange, looks liquids, solids and powders. There is an increased demand like the basement of Willy Specific capabilities include for healthy functional food both Wonka’s Chocolate Factory. Vats, essential oil manufacturing, domestically and internationally, pools, pipes, valves, gauges and cold pressed oils, drum and especially in growing middle pumps fill the 550 sq. metre spray drying and powder classes of Asia. shed on the outskirts of town, manufacturing, extruding where Managing Director Kerry for product and ingredient The functional food Ferguson can be found deeply manufacturing and packaging. market was worth engrossed in the innovative R&D phase of her business. Things are moving quickly for billion Botanical Innovations, which $US25 Combining herbs, fruits, was established in late 2014 and globally in 2011, yet vegetables, plants and woods already has investors and markets Australia had only a with the latest technological showing a keen interest in its 8 advances in extraction, range of products. 1.6% share. purification and packaging, Botanical Innovations “Having finally worked out how Strict regulations on health manufactures botanical extracts, best to package my vinegars, claims have made Europe a essential oils, flours and oil for the oils and extracts I am about to centre for clinical trials in the food, nutraceutical, medical and commence exporting,” says Kerry. functional food market. Until cosmetic industries. “I have worked with a business March 2014, the European Food partner in India for many years Safety Authority (EFSA) had only The company’s location, in the and will be exporting Botanical approved 254 health claims out heart of Central NSW, provides Innovations products to India.” of the 2,242 submitted.9 proximity to a wide range of raw materials, including horticultural Kerry, who has a corporate Japan, on the other hand, has “waste” such as apples, cherries background in health care and become a test hub for innovation. and grapes. agribusiness, says Southern Cross In early 2014, total approvals University, Austrade and industry in Japan had reached over Botanical Innovations products specific trade fairs have been 1,100; five times higher than the include apple, grape and cherry key to establishing contacts and number of approvals in Europe, seed oils, vinegars and phenolic networks in this critical start-up standing out among developed extracts. Botanical Innovations phase of the business. countries for the range of health also manufacturers Australian ingredients.10 Buddha Wood essential oil Key Observation and industrial fumigants and This has made Europe a hard disinfectants formulated from There is value to be realised market for manufacturers of essential oils. from agricultural waste functional foods, but one with streams, currently being high standards for health claims.11 Botanical Innovations done with cherry waste services include research streams in the region and The largest number of functional and development, pilot could also be applied to food and drinks consumers is in manufacturing, market testing, grapes, apples, olives and business planning and market other stone fruits which 8 Charles Sturt University, (2013) New entry, commercial manufacturing are produced in significant $2.1 million grains and research centre at CSU, ://news.csu.edu.au/ and formulating. quantities in the Central West 9 Ibid NSW region. 10 Ibid 11 Langley, S. (2014) Ausfoodnews.com The future of functional food regulation, Canadean, July 14 14 / Value Adding to Agriculture in Central West NSW / the US — especially as a market for lifestyle health products. Emerging hubs such as China, India and Brazil are also likely to exert significant influence over the functional food and drinks market in the future.
Demand for functional food is being driven worldwide by a growing interest among consumers in health and wellbeing, due to an ageing society and increasing prevalence of lifestyle related diseases.
The functional food market is particularly strong in Asia with growing opportunities for businesses operating in the of animal feeds which are “We are looking at Australian food industry.12 considered safe, appropriate and opportunities to extract cost-effective.14 proteins from pulses and Australian-based businesses are use them as high value food in a good position to market The Protein Challenge 2040 is a ingredients. We are also functional food products global coalition of organisations working on incorporating effectively, with Australia having and NGOs exploring how omega-3 unsaturated fatty a strong reputation in credible we feed nine billion people acids in animal feed so that we research (despite ranking enough protein in a way which can produce premium meat low worldwide in terms of is affordable and good for the products... I believe that in commercialisation13), and general environment. A key priority is the future we will have grain food and product safety. to scale up sustainable feed varieties with enhanced health innovation to meet the consumer properties that will attract a Protein and demand for animal protein. premium in the market. We Animal Feed are working on wheat varieties 14 Protein Sources for the Animal Feed with reduced allergenicity Rapid income growth in Asia Industry FAO UN 2004 http://www.fao. properties. We’re working on org/3/a-y5019e.pdf is associated with an increased new high value options for demand for high protein foods canola meal. We also think such as meat, fish, milk and eggs. there is a lot of potential in Meeting the growing consumer new uses for protein isolated demand for meat, milk, eggs from pulses.” and other livestock products is — Professor Chris Blanchard, dependent to a large extent on Functional Grains Centre, Wagga the availability of regular supplies Wagga15
12 corrs.com.au (Sept 2014) Marketing 15 Professor Chris Blanchard, email Functional Foods in Australia — How interview 20 April 2016 to navigate the rules on health and therapeutic claims 13 OECD ranking of Australia globally in terms of research, as referred to in the National Innovation and Science Agenda (high in research, low in commercialisation). http://www. innovation.gov.au/page/national- innovation-and-science-agenda-report
/ Value Adding to Agriculture in Central West NSW / 15 Case study: Research finding new ways to turn Global trends and market commodities into value added products. opportunities for protein and animal feed The Australian Research Council healthy food or food with novel (ARC) Training Centre for applications," Associate Professor The Farm Animal Production Functional Grains, funded through Blanchard said. industry has performed well the Industrial Transformation despite difficult trading conditions Training Centres program from “What is called the 'functional over the past five years. Volatile 2014 to 2016, is a research hub food market' was worth $US25 weather patterns and resulting for grain scientists from Charles billion globally in 2011, yet shifts in demand for animal Sturt University (CSU), NSW Australia had only a 1.6 per feed, fluctuating grain prices Department of Primary Industries cent share." and strong competition in the (DPI) and CSIRO, with a focus on industry have contributed to three commodities — rice, pulses, CSU Vice-Chancellor and President revenue movements over and canola. Professor Andrew Vann praised the period. Associate Professor Blanchard Also involved is the Graham and his team for securing the The proportion of grain being fed Centre for Agricultural Innovation competitive ARC funds. to livestock has been increasing. — a collaborative research This places more significance alliance between CSU and NSW “Charles Sturt University's position upon Australia having a DPI. Other partners include Grain in the food bowl of Australia consistent and reliable source of Growers, MSM Milling, Flavour offers natural linkages between animal feed grains into the future. Makers, Teys Australia, Woods researchers and food-processors The major companies in the Grains, Grains and Legumes of these major commodities."16 animal feed industry, which earn Nutrition Council, Grains 90.9% of industry revenue, have Research and Development May 2016 Update — The ARC remained profitable by reducing Corporation and Rural Industry ITTC funding was only for 3 their exposure to market supply Research and Development years from 2014 to 2016 and volatility through sheer size.17 Corporation. there is currently no opportunity for extension. Animal feed industry revenue "Rice, pulses and canola account is projected to grow at 3.6% for $2.5 billion of earnings when Key Observation per year over the five years sold as commodities, with even through 2015–16 as demand greater economic potential for Research, development and increases both domestically and the Australian economy through training to assist Central internationally. According to value-adding." West NSW producers the Stock Feed Manufacturers' supply worldwide demand Council of Australia (SFMCA), The aims of the Centre include: for sustainable, quality the major risk Australia faces is a identifying the preferences of protein and animal feed for nationwide drought that extends Australian and international grain both human and animal over two winter cropping years customers; improving grain consumption respectively affecting the supply of animal storage; developing new grain- should be encouraged and feed.18 based products with enhanced supported. sensory and health attributes: 17 ibisworld.com.au, (2015) Farm Animal and training the next generation Feed Production in Australia: Market Research Report, July http://www. of food science researchers. ibisworld.com.au/industry/farm-animal- feed-production.html “We want to transform the three 16 Charles Sturt University News (2013), 18 Ibid New $2.1 million grains research centre commodities by examining the at CSU, 19 Dec http://news.csu.edu. functionality of food, particularly au/latest-news/agricultural-science/ food-production/new-$2.1-million-grains- the growing demand for research-centre-at-csu
16 / Value Adding to Agriculture in Central West NSW / The Australia Meat Processing industry has performed strongly over the past five years. A mature domestic market has constrained local consumption of industry products, with the exception of premium and organic products. However, rapidly rising demand for Australian meat, particularly beef, in export markets has contributed to strong industry revenue growth over the past three years.
Industry revenue is forecast to grow at an annualised 9.0% over the five years through 2015–16, to reach $19.4 billion. Despite ongoing strong demand from export markets, industry revenue is projected to grow at a more subdued 5.8% in 2015–16.19 // MSM Milling silos
19 Ibid Case study: MSM Milling — Providing stockfeed to the world
In 2008, MacSmith Milling they are experiencing favourable Manildra (MSM Milling) was growth and conditioning formed to produce canola oils for using the pellets. International industrial and retail markets under producers are also benefitting, The Healthy Baker and Manildra including dairy farmers in Gold brands. New Zealand.
MSM Milling’s decision to re- In 2015, MSM Milling joined invest in the Manildra site to forces with the Manildra Group allow for further value adding has and Oilseed Products (OSP) NZ resulted in locally grown canola to form Manildra Stockfeeds being transformed into stockfeed New Zealand. which is sold both domestically and internationally. MSM Milling’s range of stockfeed is constantly expanding, with The feed mill produces protein specialised pellets now available and energy-dense pelletised for beef and dairy cattle, dairy stockfeed, using canola meal goats and lambs.20 and oil products as well as local wheat and barley and products from the Manildra Flour Mill. Some local award-winning producers have indicated that 20 MSM Milling (2015) Year in Review Newsletter, Stockfeed to the world
/ Value Adding to Agriculture in Central West NSW / 17 Bioenergy An example of how this Corporation (RIRDC) to undertake could be developed is evident a comprehensive assessment Bioenergy is produced through in the work of Regional of using biomass for bioenergy. the conversion of biomass (solid Development Australia Orana, This project is set to identify new or liquid) to electricity and heat which neighbours the Central opportunities and make it easier via processes of combustion, West NSW region. RDA Orana to develop biomass generation fermentation and digestion. have been working with local and biofuel projects in Australia. Bioenergy has the potential to councils, businesses and play a significant role in providing industry to progress investment RIRDC plans to geospatially future biofuels and electricity to in a regionally-based BioHub, map existing and projected the region. ultimately leading to the biomass resource data alongside establishment of a network of other parameters such as Agriculture can provide a range Hubs across the region and existing network and transport of feedstocks such as woody developing new supply chains infrastructure, land use capability biomass, crop residues, oil seed in an emerging ‘bio economy’.22 and demographic data. crops and tallow for bioenergy. Stakeholders perceive a range of opportunities arising from “This will provide better linkages Key Observation establishing a BioHub to between biomass suppliers and transform invasive woody weed end users and support local Biofuels and bioenergy species into bioenergy in areas of businesses to get more value present new opportunities Western NSW.23 from organic material destined to value add across all for landfill, disposal or other low agricultural sectors of Central Global trends and value uses,” says ARENA CEO, West NSW including broad- market opportunities for Ivor Frischknecht.24 acre cropping, forestry, bioenergy dairy, horticulture, beef and The first iteration of the database intensive livestock. Bioenergy has the potential is planned for release in late 2016. to play a crucial role in the A Victorian Government report21 provision of sustainable energy. According to ARENA, Australia’s found that bioenergy production However, bioenergy’s potential bioenergy use is projected to could assist the development of in Australia is yet to be fully increase by 60% from 2007–08 regional areas in a number of realised and its fortunes will likely to 2029–30. There is potential ways including; be influenced by Government to expand Australia’s bioenergy // Reducing greenhouse gasses, incentives and various State sector with increased utilisation such as biogas being captured Government requirements for of wood residues from and used to generate power greenhouse gas mitigation, in plantations and forests, waste // Providing additional electricity the absence of well-established streams and non-edible biomass. for expansion of regional markets in this area. industries Global demand for bioenergy // Using waste streams through The Australian Renewable Energy resources is expected to increase processing agricultural Agency (ARENA) announced in with the projected growth in produce January 2016, $3 million funding bioenergy use. In the short- // Providing alternative options support for the Rural Industries term, demand for bioenergy for land use, should warmer Research & Development resources are likely to be met by and drier weather experienced sugar, starch and oilseed crops, in the recent past continue 22 Further information in the Dubbo as well as utilising the large into the future Biohub Project is available at http://www. volumes of unused residues and rdaorana.org.au/our-initiatives.htm // Providing employment in 23 Cobar Weekly (2016) RDA says a regional areas biohub might not be just a pipe dream 24 Australian Renewable Energy Agency http://cobarweekly.com.au/?p=1279 (Jan 2016) National bioenergy database to create new opportunities http:// 21 State Government of Victoria (2010) arena.gov.au/media/national-bioenergy- Bioenergy from Agriculture http:// database-to-create-new-opportunities/ agriculture.vic.gov.au/agriculture/food- and-fibre-industries/industry-profiles/ bioenergy-from-agriculture
18 / Value Adding to Agriculture in Central West NSW / wastes. Lignocellulosic25 crops Case Study: CLEAN Cowra Key Observation are expected to contribute in — Developing a model to the medium-to long-term and convert locally-sourced Central West NSW is well algae could make a significant biomass into cost placed to be an innovation contribution in the longer term.26 competitive energy hub for research and application of biotechnology “There is a widespread Cowra Low Emissions Action in agriculture for the scientific consensus that Network (CLEAN) Cowra is following reasons; agriculture (including the a community-based group // significant diversity of high agrifood chain) and, more advocating for a decentralised, quality agricultural produce; generally, the rural sector has aggregated biomass-to-energy // proximity and accessibility to considerable potential for model to be developed that Canberra and Sydney providing renewable energy, could service local agricultural // existing market attraction both by supplying the biomass industries by using produce and — two private enterprise (including waste products) waste, subsequently providing biotechnology ventures needed as feedstocks for a platform for sustainable already operating in Orange; various forms of renewable economic development. // location of the NSW energy, and by utilising the Department of Primary spatial dimension of rural land The Cowra biomass project Industries; (much of which is under the estimates it will produce around // the region’s close ties with ownership of farmers) as a 60% of Cowra's energy needs Charles Sturt University catchment area for the ‘free’ at full capacity. It would involve and the Graham Centre for resources wind and construction of a biomass Agricultural Innovation; solar energy.” plant — an initial 2MW version // attractiveness of the region — OECD report on is estimated to cost around $8 to higher skilled workers Sustainable Agriculture27 million. (attractions include affordable housing, cost of living, work/ 25 The Oxford Dictionary defines The Initial Project Scoping life balance, schools and lignocelluose as “a complex of lignin Review of CLEAN Cowra university, medical services and cellulose present in the cell walls of woody plants”. suggests it could provide a best and specialists and culture.) 26 Geoscience Australia and the Bureau practice waste processing and // the region’s status as one of of Resources and Energy Economics energy supply model that can seven “centres of regional (2014) Australian Energy Resource Assessment 2014, Chapter 12 — be implemented elsewhere growth” Australia-wide Bioenergy in regional areas, given the expected to contribute over 27 Burrell, A.(2010) Renewable energies availability of appropriately $15b to the national economy from the rural sector: the policy zoned and serviced blocks in 2031.28 challenges, available at http://www. oecd.org/greengrowth/sustainable- of land. agriculture/48309185.pdf 28 Commonwealth Government, (2016) Australian Infrastructure Plan, pp 60–61
/ Value Adding to Agriculture in Central West NSW / 19 Digital Technology
Across all agricultural sectors, “Lack of reliable access to Digital Platforms digital technologies are radically internet and mobile coverage connecting changing agricultural business is one of the most restrictive agribusiness to models and providing significant elements in preventing the capital opportunities for value adding. wider uptake and adoption of existing and emerging Lack of capital and land assets While precision agriculture, technologies in Australian are a significant impediment mechanisation and robotics agriculture… (there is) dire to growth and value adding all contribute to value adding need for better and more for agribusiness in the region. on-farm, this report focuses reliable regional and remote New online platforms, such as on the post-farm gate digital internet and mobile access”. Condobolin-based AgValue, technology opportunities — Grains Research and are being developed to expand including E-commerce, which Development Corporation30 the range of capital available to is providing new and more agribusinesses, including sourcing direct pathways to market both Key Observation alternative investment methods internationally and domestically. and connecting investors with Advances in digital family farms and agribusinesses. New methods of ‘traceability’ are technology are creating important as the provenance and myriad opportunities for Andrew and Nadia Hulme from safety of food becomes critical to on-farm and post farm gate Adagio Alpaca Mill in Orange, the competitiveness of products value adding. used digital platform ‘Kickstarter’ in the international market and to create a crowdfunding increasingly the domestic market. There is an urgent need campaign and raise $21,000 for robust, future-proof of start-up capital for the mill. The Digital Divide and wide-reaching Although Kickstarter raised the telecommunications $21,000 sought, a significant With these opportunities capabilities in Central amount of work and costs were come challenges, most West NSW, specifically involved in the process. Raising notably the continued struggle the rectification of mobile capital to start the venture has for farmers and regional blackspots and sufficient been a major impediment. communities to have adequate NBN capacity, without telecommunications capabilities which the agriculture sector Key Observation to take advantage of new will not be able to grow technologies. domestically or compete on While advances in digital an international level. Growth technology and applications The Agricultural White Paper in the region is currently are creating new avenues addresses the need for Australian stunted by inadequate for capital-raising, finances agriculture to continue to have telecommunications. remain a major impediment access to the most advanced for start-ups. Although farming technologies and 30 The Land (2016) Regions Wait for grants and other assistance practices, as well as the skills and Digital Revolution, 4 April are available for expanding labour to drive innovation and existing business activities, growth.29 research and development, innovation and exporting, 29 Commonwealth of Australia (2015) there are no grants available Agricultural Competitiveness White Paper, for starting a business in http://agwhitepaper.agriculture.gov.au/ SiteCollectionDocuments/ag-wp-chpt4- Australia.31 farming-smarter.pdf 31 Australian Small Business Commissioner http://www.asbc.gov.au/ 20 / Value Adding to Agriculture in Central West NSW / resources/faq/funding#t36n167 Case Study: Bryton Wool — video sales platform connecting Regional Australia to the world
Geoffrey Beath, Managing Partner samples online which eliminates of Bryton Wool in Canowindra, the need to display sample at says the success of his wool a show floor, giving buyers the buying and brokering business ability to view wool samples from is due to a continuing push for anywhere in the world. expansion and keeping up with technology in an ever-changing Geoffrey says he was inspired to industry. develop the technology partly due to the diminishing number The business, established in of exporters in Sydney; a result of 1973 and taken on by Geoffrey declining wool production and and his wife Sue in 1992, now the costs involved in displaying has warehouses in Canowindra, wool in Sydney. Young, Crookwell, Forbes and Oberon, and around 4,000 “It just made sense to digitally growers on the books. Business show samples,” says Geoffrey. has grown solidly over the past two decades, but it is in the “We went through some last five years that the most experimentation with stills significant growth has occurred but weren’t able to provide an and it is all down to taking on accurate viewing of the wool. digital innovation. Stills couldn’t provide enough information regarding length, “Currently at the Canowindra colour, style and crimp. We store we have thirteen employees, needed to show movement.” // Broadband technology used by eighteen employees total spread Bryton Wool for digital trading out in four centres,” says Geoffrey. Broadband technology made platform. Photo Kate Barclay. “The people that are employed a video trading platform viable here at Bryton Wool are all local in Canowindra. Bryton Wool people. We have two new young invested around $18,000 in juniors who have just started. developing its video trading It’s a natural progression to bring platform, including purchasing youth into the trade.” camera equipment, digital platform software, data collection “We source wool from as far west and storage capacity. as Wilcannia through to Oberon, down as far as Braidwood, “Once we were able to reliably Bungendore across over to describe the wool our buyers Tumut, Caragabal and as far north gained confidence in what we as Yeoval and Euchareena. We do were selling and the true value of cover a large area. Last year we the wool,” says Geoffrey. put 25,000 bales through the shed here. In a shrinking industry we Between 2012 and 2015, Bryton find ourselves travelling to distant Wool increased the number of areas to source our product.” bales handled from 18,000 to 25,000 with the help of the video Since 2010, Bryton Wool sales platform they employed. have been working on video technology to display wool
/ Value Adding to Agriculture in Central West NSW / 21 E-Commerce “The image of foreign products Recommendations are as being cleaner and greener, expected to be, firstly, E-commerce is the transaction and the many food safety establishing an e-commerce for goods or services via the scandals in China, makes it flagship shop front site. internet . hard to see Chinese customers Secondly, developing a project switching to domestic that will look at what Chinese E-commerce has revolutionised alternatives, no matter the consumers are searching for the way business is conducted, price rise. While the price of and what are their shopping from record and account keeping Australian milk powder and methodologies. Thirdly, to marketing and promotion, vitamins will rise, so too will publishing fact sheets banking, communication and the price of our competitors' which the agrifood export product or service research. milk powder and vitamins.”33 can use as a source of It provides agribusinesses the information and guidance potential to reach new customers In 2014 the total sales value of when considering the China anywhere in the world and to China’s e-commerce sector was e-commerce industry. cut out the “middle men” in worth more than half a trillion — Dr Fay Haynes, the supply chain. E-commerce Australian dollars. Around 90% NSW Department of is opening up expanded sales of online shopping in China is Primary Industries36 avenues to niche value added transacted through e-commerce agricultural products and marketplaces which have the 36 Ibid commodity producers. potential to bring China's online consumers within reach of even Recent changes to China’s the smallest Australian exporters.34 e-commerce regulations mean that from April 2016, goods The NSW Department of Primary bought and sold online to China Industries are expecting to will be subject to new duties. publish a review on the China Some food suppliers, such as e-commerce sector by the end powdered milk providers, will be of 2016.35 The intention of the required to have their product review is to establish a body licensed or re-licenced by China’s of knowledge on the nature of food and drug regulators. e-commerce in China, what it means for the Australian agrifood Although China’s new industry, an understanding of e-commerce duties are expected the e-commerce supply chains to increase the cost of Australian and identification of areas of goods by an estimated by 10–20%, inefficiencies. Australian producers remain in a strong position to capitalise 33 Ibid on the huge Chinese market for 34 The Australian Trade and Investment high end, reliable, clean food Commission, (2016) E-commerce in China http://www.austrade.gov.au/ 32 products. Australian/Export/Export-markets/ Countries/China/Doing-business/e- commerce-in-china 32 Manuel, R (2016) China’s e-commerce laws not a crackdown but closing a 35 Dr Fay Haynes, International loophole, The Conversation, 1 April Engagement, NSW Department of Primary Industries, personal conversation and email, 11 May 2016
22 / Value Adding to Agriculture in Central West NSW / Case Study: Igrain — online trading platform for the grain industry igrain.com.au is an online “Igrain assist farmers find the best ready for online transacting, he grain trading platform based price for the grain on any given says things have changed rapidly in Bathurst. The business was day that they sell,” explains Igrain over the past five years. established in 2009 shortly after founder Tom Roberts. “We do market deregulation in response this by providing access to more “(We) see opportunities for to a specific need from grain buyers in the one location. We agriculture in greater adoption of growers for greater pricing always ensure farmers will be technologies and improvements transparency and a broader paid for what they produce by in freight and logistics to move market access the grain buyers. underwriting every transaction what we produce here into key with trade insurance. Growers markets,” says Roberts. In 2015, igrain transacted 410,000 not being paid for grain is a huge tonnes. The company has industry problem due to traders’ Robert’s cites good staff, transacted close to 2 million going receivership.” technological capability, close tonnes with over 260 grain proximity to markets and buyers across QLD NSW VIC and While Roberts concedes they perseverance as key to igrain’s SA since its inception. may have over engineered success in Central west NSW.37 technology in the early stages when farmers where not quite 37 Email interview with Tom Roberts, Founder igrain, Bathurst, 6 May 2016
Traceability The food traceability market is Traceability has been identified as projected to reach $14 billion by one of the key global megatrends “Consumers will be 2019. The Asia-Pacific is projected in agriculture. The ‘where did “information-empowered” to be the fastest-growing market my food/fibre come from?’ and rural industries stand for food traceability, driven by the factor is a powerful motivator to gain or lose market share technological advancement and for consumers. Establishing based on this increase in growing concern for food safety provenance, quality and safety consumers’ knowledge.” among consumers in developing will be key to attracting market —CSIRO Megatrends Report38 countries such as India and premiums both domestically and China.39 internationally in the future.40 Agribusinesses throughout the food supply chain are using a Traceability can be provided at Key Observation variety of digital traceability tools the item, case, pallet or container to capture critical information level, through the use of smart Traceability is an increasingly during the path from paddock farming sensor systems, Radio- important capability within to plate. Traceability not only Frequency Identification tags the supply chain facilitated provides reassurance of food (RFID), bar codes and QR (Quick by advances in digital quality and safety, but also Response) codes, GPS satellite technology; in order to creates branding and marketing locations, packaging, data loggers remain competitive this is an opportunities to build a valuable and more. area in which Central West connection between consumers NSW agribusinesses cannot and producers. 39 Food Traceability Market Global Trend afford to lag behind. and Forecast to 2019, Marketsandmarkets. com; International Union of Food Science 38 Sandra Eady, Stefan Hajkowicz (2015), & Technology; US Food and Drug 40 New trends research predicts mega Rural Industry Futures: megatrends Administration opportunities for Australian agriculture impacting Australian agriculture over the as world grows hungrier, wealthier coming twenty years, Rural Industries with fussier consumers by 2035, Rural Research & Development Corporation & Industries Research and development CSIRO Corporation, 14 Aug 2015 & Dr Stefan Hajkowicz, CSIRO
/ Value Adding to Agriculture in Central West NSW / 23 Processing and Packaging
Agricultural processing in Central Case study: Adagio Alpaca Mill — premium fibre West NSW includes, but is not processors restricted to, wine and cider making, grain and oilseed milling, The high costs of processing in “One third of alpacas are wool scouring and milling, Australia has evidently affected estimated to be in NSW, and livestock slaughter, timber milling, the wool and fibre industry, Central West NSW is a bit of a fruit and vegetable processing though some local Central hub. Our aim is to purchase and juicing, pasteurisation, West NSW processors are filling fibre for a reasonable rate from biotechnology and the this gap to create value added producers, making it a sustainable production of functional food premium products. industry” says Andrew. and cosmetic ingredients. Engineers, Andrew and Nadia One of the main benefits of Traditional manufacturing Hulme, moved to Orange alpaca fleece is the absence companies, including food in 2008. When the couple of lanolin which is found in and fibre processors, in the discovered the nearest mill to wool. Water can be reused Central West, have been in process their alpaca fibre was as during alpaca fleece processing, decline for a significant period. far away as Victoria, they began biodegradable chemicals can be Domestic challenges facing the to investigate the wool and other used and less energy is required, industry include skilled labour fibres processing gap in the NSW creating a more environmentally- shortages, increasing operational market. friendly process. costs, transport costs, cross jurisdictional regulations and “The cost of transporting the fibre Despite being told by some retail competition. Globalisation to and from Victoria was too high financial institutions that means imported processed foods and there was nowhere we could manufacturing is dead in are finding shelf space in Australia get small batches, or even large, Australia, Andrew and Nadine at cheaper prices. Australian of wool contract processes in persevered to raise the capital processors find it difficult to NSW,” says Nadine. they needed to establish the mill. compete with the cheaper labour, economies of scale, lower Australia's wool processing “We believe strongly that costs of raw materials and lower industry was once an important Australian manufacturing can standards of processing.41 part of our national and rural be sustainable,” says Nadine. economy. Where once the “Scale is critical. We need Despite the challenges, Australia’s country boasted wool fibre to be big enough for some food export markets continue processing plants in most states, economies of scale, but small to grow, and automation and now only three remain. Following enough to be premium. We advanced manufacturing the collapse of the reserve price avoid the word ‘niche’ because processes are creating scheme in the early 90s, many this is not a hobby — it is a opportunities to revitalise wool processors closed, and the serious venture.” the industry. rise of China as a processing powerhouse means there are Adagio Alpaca Mills launched now very few factories left. in May 2015, sourcing alpaca 41 Commonwealth Government wool locally, contract milling for (2012) Inquiry into Australia’s Food After considerable research and individuals and producing their Processing Sector business case analysis, Andrew own range of premium alpaca and Nadine decided to establish yarns available online. They a fibre mill specialising in alpaca currently employ two full time in Orange, sourcing specialised and two part-time staff. machinery from Italy.
24 / Value Adding to Agriculture in Central West NSW / // Adagio Alpaca Mill.
Key Observation
Processing weaknesses in the Central West NSW agricultural supply chain may present opportunities for some niche sectors.
The strength There is a substantial food Vegetables are cooked in retorts of Central manufacturing capability in the and packed in sealed cans or can West NSW fruit region. Simplot Australia has be mixed and packed uncooked and vegetable two factories in Bathurst which in a variety of bag in box formats. processing produce a range of branded Weigh fill machines are used to products for major retail and food provide high-speed weight based There is renewed interest in service customers under the packing. There is also extensive horticultural value adding Edgell, Birdseye and I&J brands. equipment for grading and and processing in the region. sorting in the processing stages Examples include the future A range of frozen formulated as well as specific lines for corn development of Botanica’s protein and vegetable portions processing and other products. new High Pressure Processing are pressed on a dedicated enterprise in Cowra (billed as line using a Formax machine. the modern version of the now High speed robotic packing defunct Windsor Farm, formerly technology at up to 1,200 picks Edgell’s Cannery in Cowra), and per minute and robotic palletising the trend in apple juice and enables efficient carton packing cider processing in Orange by in a range of formats. The businesses such as Small Acres second plant produces a range Cyder and Appledale Processing. of vegetable products in can, sealed bag or pouch format.
/ Value Adding to Agriculture in Central West NSW / 25 Case Study: Botanica — Cross sector opportunities in 4. Natural/Additive free labelling High Pressure Processing — HPP avoids or reduces the need for food preservatives. Quality, diversity of produce and The factory will include a high 5. New innovative food proximity are the key reasons pressure processing machine, propositions and competitive Australian premium juice cold press juice machines, chilled advantage — products that company, Botanica, has chosen warehousing, delivery and can’t be thermally treated Cowra in Central West NSW as dispatch docks. can now be High Pressure the ideal location to establish its Processed. new state of the art high pressure Given the global trend towards 6. Higher yields, fresh flavour, processing (HPP) facility. healthier, fresher packaged minimum hand labour — food, innovative processing and HPP provides the ability to HPP uses a method of cold packaging technologies such shuck molluscs or extract pasteurization and intense as HPP have the potential to crustacean meat without pressure to kill bacteria and open broad new markets for boiling. preserve food without disfiguring agricultural producers in Central 7. Environmentally friendly or bruising the product. There are West NSW. — HPP only requires water currently only five HPP facilities in (which is recycled) and the country, and Botanica intend The 21st century consumer, says electricity. to offer the largest capacity of Richard, wants convenience throughput in Australia from their foods, higher sensorial and Botanica see many opportunities factory in Cowra. nutritional quality, additive free, to vertically integrate with other natural, functional products. businesses, sectors and producers “The Central West is likely the in the region. best location in Australia to “Food companies need to operate a cold pressed juice innovate by using the latest non- “HPP will allow for farmers to facility,” says Botanica Director, thermal technologies, and High begin adding greater value at the Richard Magney. “The locality Pressure Processing is the most source,” says Richard. “The ability to fresh, clean, seasonal fruit relevant one,” he says. to utilise their second grade fruit and vegetables, rich soils, and vegetables will be a very accessibility to logistics, Thermal methods, traditionally large opportunity. It will allow for adequate artesian water, used in the food industry for food other food processors to innovate temperatures and altitudes preservation, carry disadvantages their products and also allow for make the Central West an like vitamin destruction or flavour farmers to begin creating better optimum location to locate our changes that can be avoided with brands for themselves rather than new factory.” HPP. just selling the primary inputs.”
HPP is not only used for juices. The main advantages of HPP Key Observation It also can be applied to meat, include; dairy and packaged fruit and 1. Quality — the characteristics Investment in innovative vegetables. All agricultural of the fresh product are processing and packaging sectors in Central West NSW retained, sensorial and R&D and infrastructure will have the potential to utilise HPP nutritional properties remain create new opportunities for technology. almost intact. both domestic and export 2. Safety — HPP destroys value adding to a broad “HPP has no boundaries,” says pathogens such as Listeria, range of agricultural sectors Richard. “A huge growth area is Salmonella, Vibrio and in the region. ‘ready-made meals’ for domestic Norovirus. and export retail so particularly 3. Higher quality longer shelf- [relevant for] the meat processors life — HPP drastically reduces and veggie growers.” the overall microbiological spoiling flora.
26 / Value Adding to Agriculture in Central West NSW / The decline of deer in NSW, and for goats in the extensions and repair of fire Central West NSW Central West NSW region. As at damage and it is understood the meat processing June 2016, the proposed goat site will re-open as an abattoir. abattoir in Blayney had not yet Over the past decade, been approved for development. Tablelands Premier Meats the number of large scale commercial abattoirs in Central Reasons cited by meat processors Tablelands Premier Meats near West NSW has dropped from for the decline in the industry in Canowindra is an 'on-farm' eleven to just one; Cowra Meat Central West NSW include; fully licenced abattoir and meat Processors — a multi-species // Record low numbers of processor, processing their own abattoir (however not licenced livestock over the past decade animals and providing service kills for Halal or export). // Competition from supermarket of sheep, goats, pigs, chickens, chains ducks and turkeys for other The next closest abattoirs to the // Lifestyle — consumers want growers, with no minimum kill Central West NSW region are quick and easy meat from number required. Tablelands Fletchers in Dubbo and Hilltops supermarkets Meats are the only white meat Meats in Young. Both process, // Proximity to urban populations processor in the Central West. package and market their own and environmental pressures brands however do not provide // Prominent meat processors Tablelands Premier Meats do not slaughtering and processing who remain in the Central process cattle at this time, but services to other producers. West NSW region include: are able to process small vealers Fletchers is the largest sheep subject to negotiation due to size meat processor in Australia, and Cowra Meat Processors limitation. Hilltop Meats export to the Middle East, South-East Asia, Korea, Cowra Meat Processors supplies Tablelands Premier Meats clients Japan, Canada, USA and Africa. 300 restaurants and butchers include hobby farmers, organic making it the largest domestic producers, butchers, market Only five abattoirs process pigs meat wholesaler in NSW. Chris retailers and general consumers in NSW, two of which are export Cummins, owner of Cowra through their own on-line shop. licensed. However, with their Meat processors, says value They provide home delivery in locations in Lismore and Corowa, adding is achieved through their own refrigerated transport at opposite ends of the state, this their “Breakout River” branding throughout the Central West and requires long freight journeys and marketing, incorporating into the Sydney region. from the Central West NSW Watervale Beef, Cowra Lamb and region. Pig producers in southern Chiverton Pork. Currently, Cowra In an interview with The Land NSW often take their stock into meat processors are focused newspaper in 2015, Tablelands Victoria for slaughter, especially primarily on domestic market Premier Meats proprietor and those requiring export-licensed opportunities, as an alternative to Meat Safety Inspector, Stephen abattoirs. Victoria charges a sales larger supermarkets. Cowra Meat Tamplin, said "We are never going tax, the Victorian Swine Duty processors injects around $13M to compete with JBS or Fletchers (up to 16¢ per pig in 2010), on all into the local economy and has but we provide a beneficial pigs slaughtered on top of the almost 200 full time employees. service to others, especially small slaughter levy. Approaches at the producers who want their own ministerial level to have this tax Oberon Abattoir product processed in the way refunded to NSW producers have they are happy with."42 been unsuccessful. In 2014, fire closed the Oberon abattoir, putting 20 people out 42 Griggs, M. (2015) Small kills will benefit Currently there are no export of work. In May 2016, Oberon small producers, The Land, 28 April and halal accredited abattoirs for Council gave approval for
/ Value Adding to Agriculture in Central West NSW / 27 Key Observation
There is significant red meat and pork production in the region but very little value adding to regional products due to the lack of processing facilities, in particular for smaller and niche producers.
Key Observation
There are few options for meat to be processed locally, in and around Central West NSW, which are halal and export accredited; this increases costs such as freight for producers in the region who wish to take advantage of export opportunities internationally.
28 / Value Adding to Agriculture in Central West NSW / Branding
Your brand is your reputation in the marketplace. It may be backed up with marketing collateral such as logos, tag lines and PR campaigns, but it may also be as simple as a reputation.
Regional Branding Many Local Government Areas A Key Observation of the report in Central West NSW brand was that although Australia was Regional branding can be themselves to support local well regarded, it was not well centred around a small agricultural and tourism industries differentiated.44 The same could geographic location such as and to identify comparative be said for individual regions, Orange or Cowra, or a larger advantage for broader economic including Central West NSW. region such as Central West development. Cabonne Shire NSW, all of NSW or Australia. Council, for example, created the Over the past decade, Central “Cabonne Country — Australia’s West NSW has branded and A regional brand is developed Food Basket” branding and marketed itself in a variety of by describing authentic regional marketing campaign twenty ways through a variety of different characteristics and values. It is years ago. Lachlan Shire Council organisations and government important to be realistic when currently use the tag line “Your bodies. Many of these branding determining these comparative Ultimate Bush Experience”. and marketing campaigns advantages and to understand if incorporate the region’s they are being developed for a The risk of Local Government agriculture and produce and domestic or export/international Areas branding regions within agritourism as a core strength. market. specific local government boundaries is that it can create Industry or New Zealand’s “100% Pure” political borders with little Sector Branding campaign has been very relevance to agriculture or successful in positioning New tourism locations and result in Industry or sector branding Zealand products, services and less logical and less collaborative has the potential to build on experiences as some of the regional branding. the strong reputation among highest quality and “purest” in overseas buyers of Australian the world. As a branding and A 2014 Federal Government agricultural commodities, and marketing strategy, 100% Pure report into national food branding consumers of products such NZ owes much of its success to found that, internationally, as Australian wine, red meat its authenticity and versatility — Australia lacks differentiation in and dairy products. It links the its ability to be leveraged across the food landscape, but so did perceptions of Australian food to multiple sectors of the New most nations. The report found the unique strengths of Australia’s Zealand economy. that internationally, only France, agricultural production and Germany and Japan really stood biosecurity systems, and clean Regional branding can be a out as being “truly different”.43 environment.45 highly effective marketing tool, especially for the agricultural 43 Australian Government, (May 2014), 44 Ibid National Food Brand — International industry. However, there is a risk 45 Commonwealth of Australia 2015, research results. that too many individual regional Agricultural Competitiveness White Paper, Canberra brands within one region can dilute and confuse markets. / Value Adding to Agriculture in Central West NSW / 29 An example of sector marketing is Key Observation the deer — trimmings included. Meat and Livestock Association’s Nothing is wasted according (MLA) “True Aussie” brand, used Characteristics associated to their top-to-tail philosophy, for individually for the lamb, beef with a Central West NSW including the hides and antlers and goat sectors. agriculture brand might which are used to produce include diversity, quality, beautiful artisan leather goods by In the Central proximity to market, know- Tim’s sister Penny Hanan in her West, Cowra how, innovation and business “1803”. Meat Processors pioneering spirit. add value to products through The greatest percentage of their their “Breakout River” branding A unified approach regional venison is currently exported to and marketing, incorporating branding is needed, in the Middle East, Asia, Europe and Watervale Beef, Cowra Lamb and collaboration with existing the United States. “It’s important Chiverton Pork. destination marketing, to our business model to have a between Local Government diversified market,” says Sophie. A Central West Areas, Regional Tourism Supplying the domestic market NSW Brand Organisations and agricultural remains important but one of stakeholders to develop an the impediments is its time- Central West NSW “Agriculture”, authentic, effective regional consuming nature which has or “Farmers”, could be considered agricultural brand. previously taken up 90% of as a “brand”. Feedback from the their time yet only 10% of their Value Adding to Central West NSW product.” Agriculture Survey (see Appendix), Case Study: Mandagery suggests that characteristics Creek Venison Currently their associated with a Central West domestic market NSW agriculture brand might Tim and Sophie Hansen are the consists of include diversity, quality, proximity proud owners of Mandagery high-end to market know-how, innovation Creek Venison, producing restaurants in Sydney, though and pioneering spirit. Australian Red deer meat for Mandagery Creek Venison is export and domestic markets exploring the option of a retail Central NSW Tourism’s current since 2002. presence in Australia in the future. “Unearth Central NSW” is a destination marketing campaign, Despite the small size of the “Because venison is still a niche inviting key target markets to national herd and limited product, we have had to work visit the region — promoting the processing facilities, Mandagery extra hard at marketing our story region as a destination. Creek Venison has achieved and creating a strong brand that economies of scale by combining people want to seek out,” says A specific Central West with other Red Deer producers Sophie. NSW Agriculture branding when supplying abattoirs, and campaign would potentially developing a clever suite of Sophie Hansen’s blog Local is work in collaboration with the marketing strategies for their Lovely not only captures their existing destination marketing brand domestically. day-to-day farming operations campaign and promote the key and philosophy, but showcases characteristics of Central West Tim and Sophie combine with venison recipes and other agricultural produce to domestic over ten other venison producers regional producers. Combined and international markets. in NSW and Victoria in order to with social media posts, be processed in Myrtleford (Vic) workshops and Farm Kitchen in a critical mass and supply the Tours and lunches, the Hansen’s Mandagery Creek Venison brand. have not only marketed their own product and brand, but have Tim, a former meat trader, is able done a lot for the wider venison to find a market for every part of sector.
30 / Value Adding to Agriculture in Central West NSW / “These days people are more as Orange Wine Week, have command high global prices. A interested than ever in the stories also contributed to the regions strong quarantine and biosecurity from behind the farm gate — our successful branding. The strength system is fundamental to customers want to feel involved of the Orange Wine Region maintaining Australia's pest and and invested in what we do brand has helped local wine disease-free status. and social media really helps us producers sell their product into achieve this,” says Sophie. metropolitan and international There is a risk, however, in markets. assuming that the characteristics Sophie’s innovative “My Open that determine a regional Kitchen” concept, which won “Clean & Green” brand are unique to that area. her the NSW-ACT RIRDC Rural The attributes we commonly Women’s Award for 2016, ‘Clean and green” describes associate with Central West aims to build an online social methods, practices and NSW such as diversity, quality, media course enabling other biosecurity systems that result proximity, “clean and green” and regional producers and sectors in environmentally sustainable, heritage for example, could also to showcase their produce and healthy, safe produce. Clean be used for any number of other ultimately value add to their and green does not have to NSW or Australian regions. product through marketing be organic — organic produce as well. requires stricter certification. Similarly, the “clean and green” “Clean and green” may infer a attribute we commonly use to Wine — combining sector number of any of the following describe and brand Australian and regional branding characteristics; produce can be used to describe // carbon neutral a growing number of other Wine regions brand and market // environmentally sustainable countries as the world becomes themselves according to location, // ethical increasingly aware of the need to topography, soils and climate — // chemical free clean, safe produce. “Clean green” is all together these characteristics // safe not going to remain a comparative make up a region’s unique // traceable advantage for the Central West, “terroir”. // additive and hormone free NSW or Australia forever. // GM free The Cowra Wine Region (which // free range However, there is still great includes Canowindra) is defined // nutritious value in Australia’s “clean and by its Lachlan Valley location, // supporting farmers green” reputation when it comes characterised by warm days, cool to marketing our agricultural nights and dry late summers. The Australia’s reputation as a produce — either as commodities region identifies chardonnay as producer of clean, green and or value added products. one of its “champion” varieties safe food has created high global and is increasingly focussed on demand for our food products — “The Chinese consumer developing an organic niche. particularly beef, wheat, canola, increasingly favours imported barley, sugar and dairy. Upholding foods due to safety concerns The Orange Wine Region and building this reputation is associated with their local leverages its unique terroir in particularly relevant in breaching food production systems. its branding and marketing. As broader markets, where local Australia's 'clean, green and the highest wine region in the food safety and quality concerns sustainable' reputation means country, the Orange Wine Region dominate consumer attitudes.46 Chinese people seek out is cool climate, a characteristic and enjoy using our oil as a currently associated with Maintaining and protecting key ingredient in their local quality wine. The Orange Wine this “clean and green” truth is cuisine, as well as gifting Region has also worked very critical to Australia’s ability to our products in corporate well in collaboration with food packages and highly regarded and tourism groups, creating a 46 Nunzio, J. Future Directions and sought after presents.” stronger, unified quality regional International (2014) Australia’s Food — Bob Mac Smith, Director MSM brand. Flagship events, such Export Outlook, available at http://www. Milling. futuredirections.org.au/publication/ australia-s-food-export-outlook/ / Value Adding to Agriculture in Central West NSW / 31 The world is competing Community Supported Australia’s nationally enforced for the “clean and green” Agriculture (CSA) — a relatively organic export standards, in place market recent arrival in China — is since the 1990s, gives Australia an growing rapidly, with over 300 edge for organic trade globally.49 Brazil is considered to have the CSA farms scattered throughout world’s first sustainable biofuels the country. Agribusiness focused The Australian organic market economy and the biofuel on organic and green foods in has continued to significantly industry leader, a policy model China are increasingly common.48 outperform most equivalent for other countries. conventional sectors with Key Observation another period of strong growth India. Organic production in through 2012–2014. The organic developing countries has also Maintaining and protecting industry is one of Australia’s been increasing as rapidly, as has our “clean and green” fastest-growing industries, exports to meet rising consumer reputation is critical to growing by 15% each year.50 demand in Europe and the the region’s ability to West. In India, for instance, a command high global prices Australia has the most organic committee set up by the federal for agricultural products. land in the world — there are Planning Commission in 2000 International competition to currently around 22 million recommended organic farming be “clean and green” means hectares of organic land in as the most viable option for the Central West NSW needs to Australia. NSW has the highest states in the Northeast. Following remain vigilant and unified in percentage of certified organic the report, a number of Indian this space. operators in Australia. states declared themselves organic and committed to The Organic There are currently 32 certified an official agricultural policy Difference organic producers and processors supporting organic smallholder in the Central West region.51 farming, and farmers in adapting “Organic” is different to the other to or adopting organic farming eco labelling claims such as 49 Australian Organic (2014) Australian practices, facilitating the "natural", "chemical free", "clean Organic Marketing Report certification of organic products and green". 50 Ibid and helping build connections to 51 Data collated from — Organic Food Chain, NASAA, ACO and AusQual export markets.47 “Being organic involves a certification system and standard China. There is a small not required for the others. There but growing trend towards are others certifications such sustainable food production as Humane Choice, Humane There are and consumption in China, Society, Fair Trade and GM Free as shown by the rise in farms that are also growing,” says Sam using environmentally friendly Statham of Rosnay Organics in 32 methods, organic farmers' Canowindra, Central West NSW. certified organic markets in major cities, and producers and an increasing emphasis on 48 Cook, S. (2016) Nurturing the shoots sustainability in Chinese policies of China’s sustainable agriculture, processors in International Institute for Environment related to agriculture. the Central West region 47 Hall, A. and Dorai, K. (2010), OECD, The Greening of Agriculture — Agricultural Innovation and sustainable growth, www.oecd.org/tad/sustainable- agriculture/48268377.pdf
32 / Value Adding to Agriculture in Central West NSW / Case Study: Rosnay Organic Farms — Canowindra
On their property overlooking the Belubula River near Canowindra, Sam and Simone Statham, and Sam’s parents Richard and Florence Statham, grow Rosnay Organic wines, olives and figs. They value add by producing certified organic wines, jams, olives and olive oils and dehydrated figs, marketed under their artisan label “Rosnay Organic”, featuring artworks by Florence. Over the past decade, the Stathams have leveraged social media and blogs to reach out to a growing market demographic keen to support authentic organic produce and “buy in” to their lifestyle. The family have built a strong domestic market for their products and also export small quantities of their wines to Japan.
The Statham’s commitment // The Stratham Family Rosnay Organic Farms, Canowindra. to organics was recognised in 2012 when they were awarded the inaugural Organic Pioneers Award through the NSW Department of Primary Industries.
By combining communal The Statham family have found living principles with a more their niche — the arts and structured business model, the organics — and are living their Statham’s have also created lives and working their business Rivers Road Organic Farms on around it. their 140 hectare property — a subdivision of twelve farming “For us, it is more about and ten residential blocks. While sustainability than growth for the the individual businesses of sake of growth,” says Sam. “We Rivers Road Organic Farms run prefer to stay small and avoid independently, they benefit from waste. It’s about scale.” providing services to each other and through shared ownership.
/ Value Adding to Agriculture in Central West NSW / 33 Collaboration and Co-operation
Collaboration Farmers Markets are a growing “The purpose of the Eat Local movement across the country. Movement is to provide as many Collaborations can be tight, such Farmers markets run every trading opportunities as possible as mergers between companies second Saturday of the month for growers and makers so eaters or formal co-operatives, in order in Orange, every third Sunday of have convenient access to the to diversify, vertically integrate the month in Blayney, and every best the region has to offer, or achieve economies of scale. fourth Saturday of the month in and the traders have a reliable Collaborations can also be looser Bathurst. Many smaller Central and regular cash-flow, and, the arrangements, such as alliances West towns also have regular money spent remains in the or contracts designed to share farmers’ markets. A co-ordinated region,” says Pennie. costs, pool complimentary skills approach to the scheduling of or secure supply.52 farmers’ markets like the sharing Among other events and of weekends between Orange, projects, Pennie runs a workshop The ability to access capital, Bathurst and Blayney, provides called “From commodity government grants and an opportunity for growers and producer to retail food farmer concessions is a significant producers to generate regular, — price takers to price maker”, impediment faced by reliable sales, critical to business designed to upskill small to agribusinesses in the Central sustainability. medium sized producers to West.53 New collaborative become more entrepreneurial, to business models may provide Farmers markets are bridging value add and to innovate. opportunities for greater the gap between producers investment into growth and value and consumers and providing “Eat Local Thursday diverted adding to agriculture. consumers with an opportunity almost $2million from to purchase food of a high supermarkets into the pockets Informal collaborations quality with low food miles of growers and makers of and support local growers and chemical and GMO-free produce Informal collaborations are communities. There is a strong and product from the Riverina becoming more common “feel good” factor associated with and northern Victoria. This is in the region. Fiona Hall, of farmers’ markets, which create a the potential and outcome of Caernarvon Cherries in Orange, “village square effect” — bringing focusing on creating a local food describes their business model communities together. economy,” says Pennie. as a collaboration or “alliance” of 22 cherry growers and 5 CASE STUDY: The Bush apple growers. No contracts Goddess — collaborating are involved, but the group to create local food Key Observation of growers benefits from the economies combined market strength of the There is potential for premium Bite Riot brand. “Bush Goddess” Pennie Scott, is groups of producers and a pork producer, farmer’s market existing farmers’ markets 52 KPMG International (2013) The co-ordinator, blogger, teacher, organisations to lead the Agricultural and Food Value Chain: and passionate regional food expansion of a local food Entering a new era of cooperation, p36 advocate based in Wagga, with economy in the Central West. 53 RDA Central West stakeholder consultations. Steve Hannan, Westpac close ties to Central West NSW Agribusiness presentation, ABARES communities. Pennie developed Outlook 2016 the Eat Local Movement in the Riverina and has since expanded the concept into Canberra.
34 / Value Adding to Agriculture in Central West NSW / Case Study: Caernarvon Cherry Co. and Bonny Glen Fruits
Bernard and Fiona Hall are the Caernarvon were the first cherry owners of Caernarvon Cherries producers in NSW to install an and Bonny Glen Fruits in Orange. optical sorting cherry grader, They were also 2015 NSW Farmer creating a significant point of of the Year finalists. difference. The sorter robotically removes blemished and internally The Caernarvon Cherry Co has soft fruit and sorts colour and four full-time employees, and size. It takes ten photos of every Bonny Glen Fruits has 20 full time cherry, resulting in sizing to employees. The Halls employ within 0.2mm accuracy, and around 1000 people over the maximising returns to growers for cherry harvest time. larger-sized fruit.
By investing in state-of-the- Caernarvon now acts as art fruit grading technology a packing facility for 20 and cool-rooms, positioning orchardists around the region. By themselves as a packing “hub” collaborating under the “Bite Riot” for regional orchardists, and label, the growers have been able developing a clever branding to improve economies of scale, and marketing strategy, the Halls minimise risk and increase their have managed to grow their “market clout”. orchard business in the face of significant industry contraction in “Before we bought our own the region. pack-house and the new technology, what we had here “The demand’s coming for was a lot of small growers all a higher consistent quality doing their own thing and all product so we’ve invested in sending to the central market new technology so we can system and all just being a price- guarantee consistent product to takers,” says Fiona. “Bernard and our customers both domestically I saw an opportunity to create and internationally,” says Fiona. a pack-house and an alliance “We have invested in other of growers, so we’ve joined technology to improve our a group of growers together systems and our efficiencies as and we collaborate to achieve well as looking at value adding our common goal of brand our products as well.” recognition for our quality premium produce”. // Fiona Hall and her children. Photo Kate Barclay.
/ Value Adding to Agriculture in Central West NSW / 35 We have some very skilled The Bite Riot range is now CASE STUDY: Co-location growers with many generations venturing into the potentially of experience. We create a brand lucrative “functional food” market, Second Mouse Cheese is co- and a recognition as a group that value adding to second grade located in a large shed on the works really well together.” fruit to produce a quality cherry outskirts of Orange, sharing juice with high levels of the space with boutique beer-maker Caernarvon has expanded antioxidant anthocyanin. Badlands, refrigerated transport their cherry season by operators Robar Distribution, and sourcing from growers across "With the known health benefits local food, wine and music retail a wide geographical area, of cherries, the potential of the hub Agrestic Grocer. Co-location including Griffith, Mudgee 100% cherry juice and other means shared benefits including and Young, enabling them to cherry by-products, there is reduced energy costs, retail and build relationships with major huge potential particularly in tourism opportunities. domestic retailers and export the growth of the affluent Asian customers looking for high markets,” says Fiona. “Our waste whey is used by a quality, reliable supply. local heritage pig farmer who “We’re always looking at new also takes Badland Brewery’s Australian cherry exports have opportunities. We’ve done cherry waste barley,” explains shown strong growth over the juice, we’re looking into cherry Kai Waltman, owner and past five years, increasing from crushers and there’s plenty cheesemaker at Second Mouse $15 million in 2010–11 to almost of opportunities. What we do Cheese Co. “Together, the whey $50 million in 2014–15. best is growing, processing and and barley makes a great pig marketing. If we’re going to go muesli!” “We exhibited with Cherry down the distribution channels Growers Australia in Hong Kong we need to be making sure we The Agrestic Grocer is a retail when we first developed our “Bite have the resources and people enterprise selling fresh and value Riot” brand five years ago,” says to do that properly. There is huge added local produce from across Fiona. “We now export to Hong potential. There are also huge the region. It incorporates a Kong, Malaysia, the Middle East opportunities for agritourism in café and regular live music gigs, and Singapore.” this area as a value add to the providing a broader, cultural business." experience for visitors and regular locals.
Second Mouse Cheese and Badlands Brewery Co-location sell their products through The Agrestic Grocer as well as other retailers and wholesalers. For all four businesses, co-location means shared benefits including reduced energy costs, waste disposal and retail and tourism opportunities. For example, Second Mouse Cheese waste whey and Badlands waste barley are reused by a local heritage pig farmer, who then sells his pork products at The Agrestic Grocer.
// Under the BiteRiot! label, growers have improved economies of scale and increased market clout. Photo Kate Barclay.
36 / Value Adding to Agriculture in Central West NSW / Brand Orange — a cross- Co-Operatives including fertilisers, seeds, sector alliance fuel, and ploughing or A co-operative is a business harvesting services. As a Established in 2007, Brand Orange created by members for their member of an agricultural is an independent, not-for-profit mutual benefit. This typically co-operative, a farmer can organisation with the primary involves a patronage relationship take advantage of volume purpose of leading economic and where members buy and discounts. tourism development, strategic sell from the co-operative. 2. Agricultural marketing co- marketing and community The members are also its operatives — are formed benefits to the Orange Region. shareholders and owners.54 by members to process, Brand Orange works to increase package, brand, distribute and tourism visitation numbers, but Agricultural co-operatives have market farm products. also promotes the region as a played a crucial role in rural place to live and work for current Australia in assisting primary The Regional Development and future residents, encourages producers to process and market Australia Mid North Coast report increased business investment their commodities. The earliest found it was difficult to get and economic diversification. Australian co-operative, the South reliable statistics on the current Coast and West Camden Co- co-operative sector landscape Brand Orange’s membership operative Company, emerged in in Australia. Co-operative base includes food and wine the dairy industry on the NSW numbers have fallen significantly producers, tourism operators, coast in the 1880s with the aim in Australia over the past two retailers and restaurants and to remove ‘middle men’ and decades, yet the co-operative cafes. In conjunction with improve returns for farmers. The movement has grown overseas. Orange City, Cabonne and top two co-operatives in Australia The Australian decline is thought Blayney Shire Councils, Brand in 2011 in terms of turnover were to be partly due to restrictions Orange represents the region agricultural co-operatives — Co- and additional compliance costs and its members in partnership operative Bulk Handing Ltd in in the regulatory environment with other industry organisations Western Australia and Murray and larger co-operatives and including Central NSW Tourism, Goulburn Co-operative Co mutuals becoming companies Destination NSW, Orange Limited in Victoria.55 to access external capital. Also Business Chamber, NSW Wine, contributing to the decline Wine Australia and Tourism In 2013, Regional Development may be a lack of grassroots Australia. Australia Mid North Coast understanding and support for published a report titled “Co- linkages, a low commitment Farm Co-operatives and operatives in Australia — A to co-operation among co- Collaboration Program Manual.” The report identified two operatives, the requirement to main types of agricultural co- have at least five members, a The Federal Government’s operatives in Australia;56 lack of training in the sector, and new Farm Co-operatives and 1. Agricultural supply co- the lack of a strong voice from Collaboration Pilot Program has operatives — provide co-operatives to develop a higher been developed to strengthen members with supply profile with the Australian public farmer awareness and knowledge and storage of inputs for and governments.57 about innovative business agricultural production, models, such as cooperatives, Although the Federal in order to have more control Government announced a $14 54 Tim Mazzarol & Dr Elena Limnios, of the food supply chain and to (2012) “The misunderstood world million package to help farmers boost their bargaining position of the co-operative enterprise”, The form cooperatives as a key in the marketplace. The two- Conversation, April 9, measure in the White Paper on year pilot program, announced 55 Nikola Balnave and Greg Patmore Agricultural Competitiveness, co- (2012) The History of Co-operatives in by Agriculture Minister Barnaby Australia, ABS operatives in Central West NSW, Joyce in April 2016, will be 56 Regional Development Australia Mid including Appledale Co-op, have delivered by Southern Cross North Coast NSW, 2013 Co-operatives in found that their co-operative University. Australia 57 Ibid
/ Value Adding to Agriculture in Central West NSW / 37 business model limits access to Case Study: Co-op culture in Orange government grants to enable them to innovate and grow.58 Dwindling shareholder However, with membership of the Appledale the purchase of A Senate inquiry report into Processors Co-operative in the first co-operative, mutual and Orange has led to the group to mechanical member-owned firms, published innovate and shift from a market harvester in in March 2016, investigated model to a processing model Australia, Appledale has plans to barriers preventing co-operatives which will include fresh juice and create a new niche for itself as a and mutuals from forming cider making. producer of fresh juice and cider. and realising their full potential and recommended that “the Twenty years ago, the co-op “The domestic cider market has Commonwealth Government boasted around 120 members. been growing exponentially in review, and where necessary Appledale was founded by a recent years,” says Jess. “Cider amend the eligibility criteria group of Orange district growers has seen growth on growth, so for grants and funds across all and orchardists in March 1978 we will be able to supply that government grants and program with the principal objective of market.” guidelines to ensure that co- ensuring that the efficient and operatives and mutual enterprises cost effective methods were Orange is also home to the are not excluded on the basis of implemented for utilising the Woodward Road Rural Co-op their business structure.”59 processing grade fruit produced Society and the Orange Co-op in the district. Cool Stores. Established fifty years ago, Woodward Road Rural Co- Key Observation Today, only 38 apple orchardists op is made up of 30 shareholders around Orange, Cabonne and Forbes including orchardists and There may be a need for make up the shareholder base. vignerons. continued advocacy to ensure regional agricultural Jess Byrne, General Manager of Key Observation co-operatives are not Appledale Processors Co-op, says excluded for eligibility for the aging orchardist population is Informal collaborations government grants on the main reason for the decline, are becoming more the basis of their business with younger generations common in the region, structure. not keen to take on such a offering agribusinesses challenging lifestyle. an opportunity to share 58 Commonwealth of Australia (2015) costs, pool knowledge and Agricultural Competitiveness White Paper, complimentary skills and Canberra secure supply with more market clout. 59 Commonwealth of Australia (March 2016) Economic References Committee, Cooperative, mutual and member-owned firms, available at http://www.aph.gov. au/Parliamentary_Business/Committees/ The Enterprise Solution Centre Senate/Economics/Cooperatives/Report Previously known as the businesses are unable SME Solution Centre, ‘The to solve themselves in Enterprise Solution Centre’ is order to take advantage now funded by CSIRO and of a market opportunity. Food Innovation Australia Ltd. The new solution, when supported with training that This program is designed builds business capability, to connect companies to is designed to increase the expertise or research advice competitiveness of the to provide a solution to a company in their desired technical challenge which markets.
38 / Value Adding to Agriculture in Central West NSW / // Luxury knitwear label Merino Snug
Case Study: Australian members are wool growers Cynthia believes there are Wool Network — and the nineteenth is our local opportunities for wool growers Bringing wool growers, vet who supervises all our in other regions, such as Central wool processors and sheep health and genetic West NSW, to value add through consumers together breeding work.” similar collaborative branding. “It only takes one person in a group In 2014, Hysport, a knitwear The end product is the luxury of growers in a region to take the clothing manufacturer established knitwear label Merino Snug, one lead,” she says. in Melbourne in 1971, was of Hysport’s premier clothing purchased by Australian Wool brands, made from Australian // Sources; Australian Wool Network Network (AWN) — Australia's merino wool and New Zealand News, Kangaroo Island Joins AWN, available from http://www.woolnetwork. largest independent wool possum fur. In conjunction with com.au/australian-wool-network---news. marketing company. The the Merino Snug brand, the swing html; Cynthia Jarret, AWN Marketing Manager, personal conversation, 3 May following year, a group of tag and point of sale signage 2016. Kangaroo Island wool growers identify the contribution of wool signed a deal with AWN to sell grown on Kangaroo Island. Key Observation and market their wool under AWN’s ‘direct network advantage’ A similar partnership is currently Other regions are or ‘DNA’ wool supply program, being developed with Tasmanian collaborating and branding developed in conjunction with wool growers. themselves more successfully Hysport. than Central West NSW. “The value adding is in engaging For example, there may be Chairman of Kangaroo Island the customer,” says AWN an opportunity for Central Wool, Christine Berry, says the Marketing Manager Cynthia West wool growers to come signing of the deal with AWN in Jarrett. “Merino Snug garments all together and collaborate like 2015 was the culmination of four tell authentic regional stories. The the Kangaroo Island Wool years’ work. QR swing tags take customers growers. directly to an engaging video “We started on the concept of a about a producer who actually grower to garment proposal in contributed to the garment. 2011 when nineteen members Growers know where their wool came together to form Kangaroo is going and consumers know Island Wool. Eighteen of our where it is from.”
/ Value Adding to Agriculture in Central West NSW / 39 Export Opportunities and Trade Agreements
Trade Agreements have the China is a rapidly growing potential to increase apple and potential to add value to the market for Australian horticultural cherry production in the eastern terms of trade and create products, with exports worth $111 part of the region to tap into the competitive advantage for million in 2014–15 — up from growing fresh fruit market in Asia. Central West NSW agricultural $14 million in 2009–10. Under producers, but the continued ChAFTA, all tariffs on horticultural The ability to transport produce by marketing of Central West NSW products will be progressively air from Canberra to Singapore — produce as clean, green and safe eliminated. This presents new and 11 Chinese cities connected will be increasingly vital to trade opportunities for the Central through Singapore — is a potential relationships and future export West NSW region’s strong game-changer for agricultural opportunities. horticultural sector, including exports from Central West NSW.
Snapshot of Potential Export Opportunities for Central West NSW agricultural produce (list is indicative only) Trade Agreement Central West NSW Opportunities Removal of tariffs will add value to terms of trade and create competitive advantage, but marketing clean, green, safe brand will be vital. All tariffs on horticultural products to be progressively eliminated. China Innovation in irradiation tech has potential to increase horticultural exports to China ChAFTA signed Dec 2015 Tariffs of 14% to 20% on Australian wine exports eliminated by Jan 2019 (See Export Growth China Tariffs on dairy phased out by 2026. The 15% tariff on infant formula passed out by 2020, however Initiative information below) other regulations will restrict further growth in baby formula market. China expected to remain main processor of Australian wool. ChAFTA may have benefits. Global food demand expected to constrain wool production in NSW. Japan Rolled oats sales to Japan have increased 62% since JAEPA65 Japan-Australia Economic Increased market for frozen beef and beef tongue. Partnership Agreement (JAEPA) Asparagus sales to Japan have increased 41% since JAEPA came into force Jan 2015 Significant export bottled and bulk wine growth. Table grapes exports also increasing Korea Goat meat, lamb and beef. The Korea-Australia Free Trade Cherries and fresh/packaged horticulture Agreement (KAFTA) came into Wine exports to Korea doubled to $8.9 million in 2015, compared with the same period in 2014. force December 2014 Meat and livestock opportunities include breeding cattle and artificial insemination, dairy cattle ASEAN and equipment, feedlot management and technology, abattoir, meat handling and butchering Brunei, Myanmar, Cambodia, equipment, other meats such as offal, mutton, goat, and lamb and education and training Indonesia, Laos, Malaysia, the programs Philippines, Singapore, Thailand New lines of processed meat products catering to the developing retail industry (supermarkets/ and Vietnam hypermarkets) such as small goods ASEAN-Australia-New Zealand Horticulture opportunities include plantation technology and services, cold storage and horticulture Free Trade Area (AANZFTA) is product handling, seed management and distribution and pest management and consultancy Australia’s first multi-country services. FTA Supply of products and services specific to the food services sector (ingredients) Technology transfers (eg. packaging and establishment of processing plants) Opportunities for growth in pulses, canola oil, oats and malting barley. India Opportunities for products and services to improve productivity and efficiency. Opportunities for Comprehensive Economic training, consultancy and management services. Cooperation Agreement. Growing demand for dairy starting to be met by Indian corporates. Opportunities for Australia may be in skills, training and value added product innovation. United States Goat meat 2005 Organic grains, pulses, food oils, horticulture, dairy UAE New lines of processed meat products catering to the developing retail industry (supermarkets/ Australia-Gulf Cooperation hypermarkets) such as small goods. Pre-marinated, premium meat cuts. Council (GCC) FTA negotiations Processed food: fresh ready-to-cook, ready-to-eat products, pre-cut vegetables, are ongoing. processed, canned/preserved and frozen food
// Sources: Austrade, Department of Foreign Affairs and Trade, and NSW Department of Industry
40 / Value Adding to Agriculture in Central West NSW / Case Study: MSM Milling expanding into China
MSM Milling is a unique, integrated oilseed processing business based in the heart of the Australian canola growing region in Central West New South Wales. MSM Milling buys non- GM canola seed directly from local farmers and transforms it into value added oil and meal products for domestic and international food manufacturers, retailers, food service companies and stock feeders. MSM has well established partnerships with many of the world’s best known // Bob MacSmith, Director MSM Milling and respected multi-national businesses.
MSM currently shipping to “During the past six years, the excises, quotas and regulatory over 15 countries around the Chinese consumers’ appetite requirements that for many years world. The enterprise includes for healthy 100% Australian have challenged and frustrated an in-house documentation grown, produced and packaged our export expansion plans. MSM department, dedicated container oil has increased exponentially Milling was fortunate to take part packing facilities and rail access at and we believe there’s a terrific in this year’s Australia Week in the site, taking export containers opportunity for far greater China which allowed us to better direct to port. expansion in China, given the understand the ramifications opportunities in that market for of the ChAFTA and the exciting MSM offers canola oil in flexibags, high quality edible oil,” says Bob opportunities available to us, and IBC's or 205 litre drums, Mac Smith, Director MSM Milling. other Australian businesses.” packaged on-site under strict quality control. Canola meal is “MSM Milling's export expansion “MSM Milling has already moved packed loose in 20' containers in plans have been boosted with to embrace these new trade our enclosed out-loading facility. the China-Australia Free Trade opportunities and is establishing Agreement (ChAFTA). In time, an automated retail packing line MSM Milling has exported the ChAFTA will open further on site in Manildra to allow us to retail products to China since opportunities for MSM Milling in keep up to Chinese consumers’ 2010 under two brand names, the Chinese marketplace.” insatiable appetite for high including MSM Milling. quality edible oils for use as a key “We look forward to the ChAFTA ingredient in local cuisine, as well removing the barriers of as corporate gifts and presents.” costly and complicated tariffs,
/ Value Adding to Agriculture in Central West NSW / 41 Export Growth China initiative
Export Growth China is an initiative of the Australian Chamber Movement. It is a highly subsidised and practical program designed to improve the export success of Australian Businesses and agriculture.
The program offers small businesses a combination of professional export services to overcome the hurdles in building a Chinese export business including; // A comprehensive Export Readiness Report, including a diagnostic consultation // Your product displayed in our Shanghai Showroom for a minimum of 6 months // Mandarin product promotions // Pro-active Buyer Matching // Product Feedback Reporting. // Optional consulting and negotiation services
Export Growth China is also open to all members of any Chamber of Commerce across Australia. Export Growth China has partnered with NSW Farmers to help facilitate the entry of NSW Farmers members into the China market.
http://exportgrowth.com.au/ export-growth-program
42 / Value Adding to Agriculture in Central West NSW / Part 2
/ Value Adding to Agriculture in Central West NSW / 43 Central West NSW — an overview
The Regional Development However, the lack of continuity as one region, extending the Australia Central West region in regional boundary definitions boundaries further to include extends from the Central makes it difficult to accurately Bogan, Coonamble, Dubbo, Tablelands on the western interpret data and compare Gilgandra, Narromine, Warren, side of the Blue Mountains reports from various government Warrumbungle and Wellington to the Central West plains bodies and organisations. LGAs. A total area of 125,666 approximately 500km to the This results in greater margins square kilometres. west. The region comprises of 11 of error and the transfer of // The ABS Central West NSW Local Government Areas (LGAs) misinformation. For example; SA4 definition includes Bland including Lithgow, Oberon, // The NSW Department of and Mid-Western LGAs. A total Bathurst, Blayney, Orange, Primary Industries “Central land area of 70, 298sq km. The Cabonne, Cowra, Parkes, Forbes, West Pilot Area” agricultural SA4 regions are the largest Weddin and Lachlan with a total profiles define the area sub-State regions in the Main population of 177,000 and a as including only Forbes, Structure of the Australian total land area of 63,000 square Cabonne, Orange and Statistical Geography Standard kilometres. Blayney LGAs. (ASGS). They are designed for // The NSW Department of the output of labour force data Blurred Industry and Destination and reflect labour markets Boundaries NSW tourism body define within each State and Territory. Central West NSW more SA4s provide the best sub-state It is important to note the varying broadly, including Mid-Western socio-economic breakdown in definitions of “Central West NSW” (Mudgee), Lithgow, Oberon, the ASGS. when studying this area. For the Bathurst, Orange, Cabonne, purposes of this report, “Central Cowra, Weddin, Forbes, Parkes West NSW” comprises the 11 and Lachlan LGAs. Local Government Areas (LGAs) // The NSW Department of of; Lithgow, Oberon, Bathurst, Planning and Environment Blayney, Orange, Cabonne, 2016 report on the region’s Cowra, Parkes, Forbes, agricultural industries combine Weddin and Lachlan. the “Central West and Orana”
PARKES ORANGE LACHLAN
CABONNE BATHURST LITHGOW FORBES BLAYNEY
COWRA WEDDIN OBERON
44 / Value Adding to Agriculture in Central West NSW / Agricultural A key characteristic of Central Climate, rainfall and topography land and sector West NSW is the diversified vary significantly across the characteristics production systems that combine region, which is often described cropping with sheep meat, wool by farmers and communities as Agriculture makes up 7.3% of or cattle production. The variety being two distinct sub-regions Central Western NSW’s GRP, of landscapes and climates within divided by the Newell Highway, making it the region’s third sector the region means a diverse range described as either “East of the of importance after mining and of quality produce can be grown. Newell” and “West of the Newell” manufacturing.60 Historically (predominately broad acre the backbone of the regional The range of agricultural enterprises). economy, agriculture in Central industries also supports many Western NSW experienced a other enterprises including stock growth of 5% in GRP between feed merchants, processors, 2006 and 2013.61 transports and logistics industry, saleyards and abattoirs.
60 RDACW Economic Profile 2014, NIEIR, A.P. SHEERE CONSULTING Agriculture 61 RDA Central West NSW, (2014) NSW in Central Western NSW Central West Export/Import Contribution Study experienced a growth of 5% in GRP between 2006 and 2013
/ Value Adding to Agriculture in Central West NSW / 45 Agricultural land and sector characteristics of Central West NSW by LGA
Average Average LGA Land form Climate Annual Agriculture Elevation Rainfall mm Wide variations in Cattle, sheep, softwood forestry and poultry are key Cool Lithgow 950m elevations. Steep 858.5 sectors. Niche primary industry include goat cheese, temperate and hilly to valleys olive oils, alpaca wool and mushrooms. Prime lamb and beef cattle are key sectors, plus Mild to warm vegetables, trees nurseries, nuts and bulbs. Timber summers and processing by CSR and Boral Timber a sig secondary Oberon 1113m Plateau cool to cold 968.4 industry. Niche opportunities in mushrooms and winters with truffles. Some protected cropping (hydroponic snows vegetable growing) currently being evaluated. Predominately a grazing region producing sheep, Ranges from cattle, fat lambs and fine wool with a temperate slightly undulating Cool climate. Horticulture is a key sector. Bathurst 650m 637.7 to rough and very temperate Two dairy operations. Some niche organic agriculture steep and alternative fruit crops such as hazelnuts, figs and feijoas. Cool climate fruit including apples, pears, cherries, nuts and wine grapes. Niche ag. Predominately a grazing region producing sheep, Well-watered, cattle, fat lambs and fine wool with a temperate Cool Orange 862m gently undulating 1059.8 climate. Horticulture is a key sector and the Temperate to hilly combination of niche produce together with tourism opportunities given its proximity to Sydney sees this as a thriving area with fine wine and food a major attraction. Predominately a grazing region producing sheep, cattle, fat lambs and fine wool with a temperate Ranges from climate. Horticulture, including viticulture, is a key Warm Cabonne 577m gently undulating 701.9 sector. temperate to plains Sheep, beef cattle, wool, grains, canola, dairy, viticulture and horticulture, niche and organic ag including nuts, olives, figs, honey. Well-watered, Sheep, beef cattle and grain. Organic agriculture Cool Blayney 863m gently undulating 765.4 and alternative fruit crops such as hazelnuts, figs and temperate to hilly feijoas. Known for its quality food and fibre production. The Lachlan Thriving livestock and cropping industries with Valley ranges horticulture also a key enterprise. A good proportion from gently Warm of the state’s Merino stud stock comes from Cowra. Cowra 310m 598.1 undulating to temperate The viticulture industry has significantly declined in open plains. Fed recent years but still has a presence and is creating a by Lachlan River niche in organic viticulture and winemaking.
Broad acre enterprises predominate, producing a high volume of quality grain and livestock, with Warm Parkes 324m Open plains 587.5 irrigation also coming into the mix along river temperate systems. Some dairy.
Thriving livestock (predominately beef and lamb) and cropping industries with horticulture also a key Warm Open plains with enterprise. A good proportion of the state’s Merino Weddin 410m temperate to 622.9 some hills stud stock comes from around Cowra and Weddin. hot Cropping includes canola, wheat, barley, lupins.
Broad acre enterprises predominate, producing a high volume of quality grain and livestock, with Open plains fed Warm semi- irrigation also coming into the mix along river Forbes 245m by Lachlan River 526.4 arid systems. Site of a major dairy enterprise. Some system cotton being trialed.
Broad acre enterprises predominate, producing a high volume of quality grain and livestock, with Lachlan 339m Red soil plains Hot semi-arid 449.4 irrigation also coming into the mix along river system. Emerging cotton industry.
// (Sources: NSW Central West Export/Import Contribution Study; Invest Central West Investment Opportunity Assessment, A.P. Sheere Consulting; Bureau of Meteorology 2014; NSW Farmers)
46 / Value Adding to Agriculture in Central West NSW / / / Cabonne Bathurst RDACW Lithgow Source: Dept. of Agriculture — ABS Agri data. Note the ABS suggests caution when assessing data with low values. Oberon Lachlan Blayney Weddin Orange Forbes Cowra Agricultural Parkes Production 2011 $105,908,794.00 $485,429,257.00 $191,277,333.00 $62,633,196.00 $32,981,458.00 $73,625,972.00 $16,552,435.00 $1,093,234.00 $1,229,192.00
Table 1.0 (right) illustrates that the Cereal crops $35,948.00 $10,385.00 Lachlan LGA produced the most $81,310.00 value in agricultural commodities within the Central West NSW $83,638,956.80 $16,665,485.00 $18,507,193.00 $21,944,118.00 region in 2011, followed by $12,158,541.00 $8,362,217.00 $5,357,121.00 Other broad $403,667.20 $211,114.60 $14,252.00 Cabonne and Forbes. Cereal acre crops $7,409.00 $7,839.00 crops in 2011 contributed the most $ value at $485,429,000, followed by the meat sector at cultivated turf Nurseries, cut $3,695,545.00 $8,228,285.70 $1,607,312.70 $306,085.00
$251,736,000. $678,084.00 $704,356.00 $109,340.00 $643,061.00 flowers and $327,018.00 $157,484.00
In total, agricultural production amounted to over $1 billion in - - $10,766,068.00 $12,050,384.00 $58,101,960.50 $12,654,371.00 $4,688,089.00 $4,070,088.00 $3,994,348.00 product value in 2011 in the $4,063,922.00 $2,602,490.50 Crops for hay $1,744,901.00 $554,742.00 Central West NSW region. $912,557.00 $13,060,309.00 $37,353,657.40 $6,788,660.00 $1,338,488.00 $8,983,550.10 $6,507,272.00 $439,669.00 $134,804.00 $92,006.00 Vegetables $8,899.30 - - $30,267,332.00 $47,324,214.60 Fruit and nuts $1,264,256.00 $8,486,112.00 $5,783,637.00 $145,820.00 $831,729.50 $433,579.10 $38,226.00 $72,339.00 $1,103.00 $81.00 $149,716,456.90 $24,100,668.00 $29,333,835.00 $20,070,341.00 $14,386,779.00 $21,545,247.00 $11,795,286.20 $14,151,707.00 $6,396,480.70 $6,079,931.00 $1,243,297.00 $612,885.00 Wool Table 1.0 Agricultural production value in Central West NSW, 2011 data $21,016,313.60 $11,156,973.00 $2,946,735.00 $2,077,932.50 $2,810,154.00 $1,573,048.10 $138,326.00 $235,812.00 $50,112.00 $18,114.00 $9,107.00 Milk - $23,397,963.60 $14,392,701.00 $4,670,543.00 $3,759,407.00 $363,336.90 $190,029.70 $15,124.00 $4,500.00 $1,988.00 $208.00 $100.00 $26.00 Eggs $251,736,508.60 $20,248,045.00 $19,279,088.00 $20,156,456.00 $25,368,637.00 $33,198,109.00 $11,964,746.00 $24,091,450.10 $50,047,714.00 $17,826,143.00 $25,021,771.50 $4,534,349.00 Meat $1,165,943,574.70 $260,950,970.00 $172,960,534.00 $178,937,866.00 $134,613,885.00 $172,794,148.00 $56,098,832.80 $86,350,472.00 $37,830,378.90 $30,812,591.00 $18,809,118.00 $15,784,779.00 TOTAL
/ Value Adding to Agriculture in Central West NSW / 47 Gross Regional Table 2.0 Key industry sectors contributing to the NSW CW region’s GRP, 2014 Product % of total Top GRP Contributing industry sectors Central West NSW Central West NSW Industry Gross Regional Product GRP $m GRP (GRP) contribution identifies the Mining $2112.22 21.9% value of final goods and services Manufacturing $727.52 7.5% produced in the local economy Agriculture, Forestry and Fishing $709.52 7.3% Health Care and Social Assistance $703.81 7.3% and provides an insight into the Construction $642.46 6.7% size of the economy and the Public Administration and Safety $587.85 6.1% key industries that are creating Education and Training $581.98 6.0% value in the region. Industry GRP // Note: GRP at Market Prices. 2014 also highlights any reliance and // Source: RDACW Economic Profile 2014, NIEIR, A.P. SHEERE CONSULTING dominance of particular sectors within a region. From Table 2.0, it can be seen higher than the NSW average of The 11 LGAs within the Central that in 2014 the mining sector 3.1%. Manufacturing continues West NSW region recorded an accounted for 21.9% of Central to contribute in terms of GRP estimated GRP of $9.65 billion in West NSW’s GRP (up from 18.7% reaching approximately $727.52 2014 representing 2.05% of NSW’s in 2011) which is significantly million in 2014 which was equal Gross State Product (GSP). to the NSW average — also at 7.5%.
Employment Table 3.0 Employment by Industry comparison, 2006-11 The region recorded 73,258 resident workers in 201162 Central West NSW region representing an average annual Average Change annual % increase of 1.2% over the Industry 2006 2011 (06-11) change previous five years (based on industry sectors of employment). Agriculture, Forestry and Fishing 7,628 6,842 -786 -2.1% The Mining sector, followed Mining 2,212 3,620 1408 12.7% by Administrative and Support Manufacturing 6,872 6,416 -456 -1.3% Services, were amongst the Electricity, Gas, Water and Waste Services 1,178 1,244 66 1.1% fastest growing sectors in the Construction 4,330 4,727 397 1.8% NSW Central West region Retail Trade 7,853 7,589 -264 -0.7% (see Table 2.0). Wholesale trade 1,928 1,983 55 0.6% Accommodation and Food Services 4,536 4,785 249 1.1% The employment shares for the Transport, Postal and Warehousing 3,074 3,264 190 1.2% Information Media and 806 672 -134 -3.3% Agriculture, Mining, Education Telecommunications and Training sectors for the NSW Financial and Insurance Services 1,195 1,051 -144 -2.4% Central West region are relatively Rental, Hiring and Real Estate Services 798 794 -4 -0.1% Professional, Scientific and Technical higher than the regional NSW 2,280 2,652 372 3.3% Services and NSW averages, indicating the Administrative and Support Services 1,392 1,781 389 5.6% relative strength of these sectors Public Administration and Safety 4,968 5,150 182 0.7% in the region. Education and Training 5,899 6,598 699 2.4% Health Care and Social Assistance 7,734 9,126 1392 3.6% 62 ABS Census 2011 data Arts and Recreation Services 582 614 32 1.1% Other Services 2,548 2,797 249 2.0% Top 3 Inadequately described or not stated 1,452 1,553 101 1.4% industry employers Total employed persons aged 15+ 69,265 73,258 3,993 1.2% in Central West NSW // Source: RDACW Economic Profile 2014, Australian Bureau of Statistics, Census of Population and Housing 2006 and 2011; Profile id, A.P. SHEERE CONSULTING 1 Health Care 2 Retail 3 Agriculture
48 / Value Adding to Agriculture in Central West NSW / Key Observation Table 4.0 Agricultural, Forestry and Fishing jobs within Central West NSW, 2011 LGA Number of local Agricultural, Forestry and Fishing jobs, 2011 Although it is one of the Bathurst 550 most important sectors and Blayney 347 employers in the region, jobs Cabonne 1134 Cowra 669 are shrinking in agriculture Forbes 670 in Central West NSW. If the Lachlan 795 region is to leverage the Lithgow 191 value adding opportunities Oberon 389 afforded by the predicted Orange 218 Parkes 618 growth of the agricultural Weddin 479 industry, it will have to RDACW Total 6,060 consider the consequences and develop strategies to // Source: Australian Bureau of Statistics Census 2011 manage shrinking jobs and skills gaps. Table 5.0 Percentage of Business Count by Industry Sector, 2011
Central West Regional Industry sector NSW Agricultural Jobs NSW NSW Agriculture, Forestry and Fishing 32.5% 21.5% 8.0% Mining 0.5% 0.3% 0.2% The number of jobs available Manufacturing 3.5% 3.9% 4.0% within each of the 11 LGAs in Electricity, Gas, Water and Waste Services 0.3% 0.3% 0.3% Central West NSW are used to Construction 13.2% 16.3% 15.7% illustrate the concentration of Retail Trade 6.9% 7.3% 7.0% jobs available in that job sector Wholesale Trade 2.8% 2.8% 4.1% Accommodation and Food Services 4.1% 4.6% 4.0% within each LGA. In total, there Transport, Postal and Warehousing 6.2% 5.6% 6.5% were close to 66,000 jobs in Information Media and 0.4% 0.5% 1.2% 2011 within the region. Some Telecommunications Financial and Insurance Services 4.1% 5.5% 8.0% 6,000 of these jobs were in the Rental, Hiring and Real Estate Services 7.3% 8.8% 11.0% Agriculture, Forestry and Fishing Professional, Scientific and Technical 5.7% 7.9% 13.2% industry sector. Census 2011 data Services illustrates that the Cabonne LGA Administrative and Support Services 2.3% 3.0% 4.3% Public Administration and Safety 0.3% 0.3% 0.4% had the most jobs associated Education and Training 0.8% 1.1% 1.4% with this sector (1,134) followed Health Care and Social Assistance 3.5% 4.5% 5.2% by the Lachlan LGA (795). Arts and Recreation Services 1.0% 1.3% 1.4% Other Services 4.6% 4.5% 4.2% Total 100.0% 100.0% 100.0%
// Source: ABS Census, Cat 8165.0 (2012)
The majority of businesses actively trading in Central West NSW are in Agriculture
/ Value Adding to Agriculture in Central West NSW / 49 Livestock
Livestock production has a Sheep The RDACW sheep sector Gross significant value chain in Value of Agricultural Product Central West NSW including Sheep numbers in the region (GVAP) was $98M in 2010–11. meat processors (though this is have been trending downwards Cabonne LGA recorded the a declining sector), packaging, for the past two decades but highest GVAP at $19M, followed transport and logistics. Livestock have now stabilised and are by Lachlan LGA at $15M and production for meat is the beginning to rebuild. There is Parkes LGA at $14M (see below). second largest agricultural evidence of a shift of managing sector in Central West NSW sheep for wool production to (see Table 1.0) meat production to capitalise on demand and high lamb prices.63
63 RMCG (2016), Central West and Orana Agricultural Industries, Sydney
Reg Dist Sheep Meat Gvap Central West 2010-11
ORANGE PARKES $1M LACHLAN $14M $15M
CABONNE $19M BATHURST LITHGOW $9M $1M FORBES $10M BLAYNEY $5M COWRA WEDDIN $9M OBERON $10M $5M
50 / Value Adding to Agriculture in Central West NSW / Beef The Central West NSW beef An example of a business value sector GVAP was $139M in adding to the beef industry in the There has been no discernible 2010–11. Cabonne recorded the Central West is Cowra Breakout trend in cattle numbers over the highest GVAP at $28M, followed River Meats “Watervale Beef” past two decades. Most beef by Blayney at $19M and Lachlan brand which supplies to over 300 enterprises in the Central West at $17M. (see below) restaurants and butchers making are small businesses, less than it one of the largest domestic 500ha with a turnover of under meat wholesalers in the state. $350,000.64
64 Ibid
Reg Dist Beef Gvap Central West 2010-11
ORANGE PARKES $3M LACHLAN $5M $17M
CABONNE $28M BATHURST LITHGOW $16M $19M FORBES $14M BLAYNEY $19M COWRA WEDDIN $11M OBERON $5M $12M
Pigs The last ten years have seen an NSW suffers from a lack of increased interest in outdoor pork processing facilities and Approximately two-thirds production systems. NSW has the faces significant transport costs of processed pork product highest proportion of small-scale from farm to slaughter. Costs (which includes ham, bacon farms in this category. Small- for slaughter include interstate and smallgoods) is made from scale growers and free-range levies for interstate pork health imported pork. The fresh pork producers tend to target niche programs.66 market is all Australian. The small markets, and pigs produced export market includes Singapore, for sale range from weaners to 66 Ibid New Zealand and other Asian bacon weight. markets.65
65 Department of Primary Industry (2015) NSW Pork Industry Overview
/ Value Adding to Agriculture in Central West NSW / 51 Table 1.0 Pig sector comparative GVAP in Central West NSW 2006–2011 Poultry — meat Central West NSW LGA Pigs $ 2011 Pigs $ 2006 Pig farms 2011 Bathurst $13,396.70 $357,803.00 8 Although poultry meat is the fifth Blayney $53,015.30 $92,676.00 5 largest agricultural commodity Cabonne $387,185.00 $2,858,012 14 in NSW and the most commonly Cowra $699,855 $4,825,045 17 Forbes $1,017,708 $4,008,427 15 consumed meat product in Lachlan $464,205 $2,357,548 14 Australia, Central West NSW is Lithgow $26,739 $112,341 5 not a significant poultry meat Oberon $2,353 - 2 region. According to the NSW Orange $704,710 $7,704 2 Department of Primary Industry, Parkes $362,833 $1,096,276 16 Weddin $364,324 $2,007,233 3 to meet projected growth it is RDACW Total $4,096,324.00 $17,723,065.00 101 estimated that the NSW poultry industry will need to build an // Source: Dept of Agriculture — ABS Agri data. Note the ABS suggests caution when additional 240 sheds to supply assessing data with low values. an additional 70 million birds by 2021.69
Pork production can include regional farmers’ markets and The Central West NSW poultry income from; have a retail outlet in Orange, meat sector GVAP increased // pigs sold for meat in fresh and and; significantly from approx. processed market segments // Fresh Pastures Pork from Stuart $134,000 in 2006 to approx. // pigs sold to other farmers for Town who raise free range $9.7M in 2011. Weddin recorded breeding animals pigs and value added products the most GVAP at approx. // semen sales from productive include vacuum sealed pork $5,094,000 followed by Cabonne boars housed in registered bellies, wood smoked middle at approx. $2,487,000 and breeding centres bacon, apple and rosemary Lithgow at approx. $1,871,000 // pigs sold to other farmers for sausages (preservative free) in 2011. growing out and subsequent and American Ribs. sale to processors Key Observation // sales of manure and bedding Australia produces around as compost or fertiliser 360,000 tonnes of pig meat every High growth expectation in year. A little over 8% is exported poultry meat demands over Niche markets tend to be to countries like Singapore, the coming decade presents serviced by smaller-scale pork New Zealand and Hong Kong, an opportunity for increased producers, although some and 25 per cent is sold through poultry meat production in larger-scale farmers target these restaurants and other food Central West NSW. markets also. Niches include service outlets in Australia. organic pork, free range pork, (Figures current as at early 2015).68 and weaner pigs for the spit Poultry — eggs pig market, on-line marketing Central West NSW pig sector and farmers’ markets. In some GVAP decreased significantly The largest egg production market niches such as organic from approx. $18M in 2006 to farms in NSW are located in pork, demand currently outstrips approx. $4M in 2011, representing the West and Central West of supply.67 a decrease of 77% during that NSW. Egg production is limited period at an average fall of 15.4% to domestic markets, although Examples of value adding pork per annum. Cowra recorded some producers are beginning producers in the Central West the most number of pig farms to show interest in export market include; (17) followed by Parkes (16) and opportunities. // Trunkey Creek Bacon & Pork, Forbes (15) in 2011. who are regulars at various 69 NSW Department of Primary 68 Australia Pork Ltd, 2015 figures Industries (2015) NSW Poultry Meat Industry Overview 67 Australian Organic (2014) Australian Organic Marketing Report
52 / Value Adding to Agriculture in Central West NSW / Demand for eggs is increasing, Table 7.0 Poultry (meat) sector comparative GVAP in Central West NSW 2006–2011 with estimates that the industry Central West NSW LGA Poultry $ 2006 Poultry $ 2011 needs to grow at approximately Bathurst $2,725.00 $145,956.80 1.5% a year to meet demand, Blayney - $43,272.40 largely due to population Cabonne $106,814.00 $2,487,000 Cowra $10,809.00 $59,488.00 70 growth. Forbes $11,272.00 $1,964.00 Lachlan $1,235.00 $632.00 The largest layer farm in the Lithgow $486.00 $1,871,174.00 Southern Hemisphere, Wattle Oberon $217.00 $479.00 Ridge (a Pace Farms operation), Orange - $36.00 Parkes - $4,788.00 is located just outside the Central Weddin $497.00 $5,093,838.00 West Region at West Wyalong in RDACW Total $134,055.00 $9,708,266.20 Bland Shire. // Source: Dept of Agriculture — ABS Agri data. Note the ABS suggests caution when In Central West NSW, a 250 ha assessing data with low values. vineyard in Cabonne Shire has diversified in recent years to Table 8.0 Poultry (eggs) sector comparative GVAP in Central West NSW 2006–2011 include a state-of-the-art cage Central West NSW LGA Eggs $ 2011 Eggs $ 2006 free poultry farm now supplying Bathurst $363,336.90 11,067.00 Aussie Farmer’s Direct and IGA. Blayney $190,029.70 - Cabonne $3,759,407.00 $2,424,469.00 Cowra $15,124.00 $144,710.00 Increasing demand for free- Forbes $1,988.00 - range eggs in recent years has Lachlan $100.00 $82,154.00 increased interest in small- Lithgow $4,670,543.00 $479.00 scale free-range enterprises. Oberon $208.00 $6,056.00 Many small farms have been Orange $26.00 - Parkes $4,500.00 - and continue to be established. Weddin $14,392,701.00 $45,118.00 In 2015, small-scale free- RDACW Total $23,397,963.60 $2,714,053.00 range poultry egg enterprises represented 70% of layer farms // Source: Dept of Agriculture — ABS Agri data. Note the ABS suggests caution when in NSW. Anecdotal evidence assessing data with low values. suggests that these operations have a business life cycle of less than 2 years, owing to the high Goat Despite China, India and Pakistan and constant labour requirement being the largest producers and in all stages of the production The production of goats for meat consumers of goat meat in the chain, lack of scale and poor is a relatively new industry in world, Australia is the world’s production performance.71 the region and in 2010–11 was largest exporter of both goat concentrated in Bathurst, Blayney meat and live goats.74 The Central West NSW poultry and Cowra.72 eggs sector GVAP increased The National Farmers Federation significantly from approx. Goat meat is the most consumed describes the Australian goat meat $2,714,000 in 2006 to approx. meat product in the world and is sector as “emerging” and cites $23,398,000 in 2011. Weddin a burgeoning commodity in exports of around $100 million recorded the most GVAP at Australia. In 2006/7, there were of produce each year, while the approx. $14,393,000 followed by 1,089 goat farms in Australia.73 mohair trade generates almost $2 Lithgow at approx. $4,670,000 million-a-year.75 and Cabonne at approx. 72 RMCG (2016), Central West and Orana Agricultural Industries, p 25 $3,759,000 in 2011. 74 Goat Industry Council of Australia 73 Australian Bureau of Statistics, (2016) http://www.gica.com.au/about- Small Area Data 2006/2007, Catalogue the-industry/goats-facts-and-stats 70 NSW DPI (2015) NSW Poultry Egg No.7125.0 75 National Farmers Federation, Major Industry Review Commodities — Goats. Available at http:// 71 Ibid www.nff.org.au/commodities-goats.html.
/ Value Adding to Agriculture in Central West NSW / 53 In June 2016, Meat and Livestock Table 9.0 Goat meat sector comparative GVAP in Central West NSW 2006–2011 Australia’s (MLA) export goat over Central West NSW LGA Goat meat $ 2006 Goat meat $ 2011 the hooks indicator for the 8.1 Bathurst - $63,606.30 to 10 kilogram category hit an Blayney - $65,099.40 all-time record of 556 cents per Cabonne - $42,216.00 Cowra - $58,277.00 kilogram carcase weight, up 251c Forbes - $26,746.00 on the five-year average. Lachlan - $34,942.00 Lithgow - $47,718.00 MLA describe the strong global Oberon - $6,269.00 demand for goat meat, boosted Orange - $8,164.00 Parkes - $8,133.00 by free trade agreements and Weddin - $10,699.00 record farm-gate returns as the Total - $371,869.70 “perfect storm” for producers. The MLA is encouraging // Source: Dept of Agriculture — ABS Agri data. Note the ABS suggests caution when more livestock producers to assessing data with low values. start farming rather than wild harvesting.76 number of large farms and many been trying to establish alpaca The development application for small farms. Domestic market as a gourmet meat under the a large goat abattoir in Blayney development is identified as an brand name LaViande. For meat stalled in 2016. R&D priority. Deer Farmers cited production, the Huacaya breed is lack of profitability (41%), abattoir preferable over the Suri alpaca as Given the global popularity of costs and access (18%), and lack it provides more lean meat.78 goat meat and opportunities for of markets (10%) as the reasons growth in the Australian industry, for leaving, or considering leaving Export there may be scope to explore the industry.77 Opportunities the benefits of a goat processing facility in the region. Mandagery Creek Venison is a Since the Japan-Australia high profile grower in Central Economic Partnership Agreement The Central West NSW Goat meat West with an established brand (JAEPA) came into force in sector GVAP totalled $372,000 profile. (See Mandagery Creek January 2015, fresh/chilled in 2011. Blayney recorded the Venison Case Study). and frozen beef exports have most GVAP at $65,000 followed increased by 24 and 15 per cent by Bathurst at $64,000 and Alpaca respectively. The export value of Cowra at $58,000 in 2011. Table beef tongue increased by 75 per 9.0 illustrates that there were no There are 466 alpaca studs in cent.79 GVAP figures for goat meat in the NSW, 74 of which are located in Central West NSW region in 2006. the Central West. According to Beef exports to Korea increased the Australian Alpaca Association, 30 per cent in value for the first Deer although mostly farmed for wool, six months of 2015 compared the establishment of an alpaca with the same period in 2014. Deer is grown for meat (venison) meat industry has the potential The reduction of a 22.5 per cent and velvet (supplying the lucrative to increase the demand for tariff on goat meat to 18 per cent Asian market for medicinal deer otherwise unprofitable animals has seen significant growth in velvet). There are 196 deer farms and lead to genetic gains across in Australia, with 25 (12%) located the industry. Breeders in the 78 Honan, K. (2015) ABC RURAL Aussies in NSW. The industry has a small Adelaide Hills, for example, have hungry for alpaca meat 79 Department of Trade and Investment (2016) Exporters quick to capitalise on 76 Goodwin, S (2016) Goat price surge to 77 Rural Industries Research & Japan FTA, Media Release, 15 Jan fuel more management, less wild harvest, Development Corporation (2010) Deer The Land, 22 June Industry Database
54 / Value Adding to Agriculture in Central West NSW / export volume since the Korea- For the sheep meat sector the In a statement, industry body Australia Free Trade Agreement potential benefits are more than Australian Pork Limited said (KAFTA) came into force, up 43 $150 million each year by 2024. "expanding export market per cent in 2015, compared with opportunities is a long term 2014. In the first half of 2015, Skins, hides and leather exports initiative identified in the Korea was Australia's third largest to China, worth $896 million in Australian Pork Limited Five Year goat meat market, worth $7.3 2014, attract a tariff of five to 14 Strategic Plan."85 million. Under KAFTA, goat meat per cent, and those tariffs will tariffs will reach zero by 2024.80 be eliminated over the next few Alpaca years. China is the dominant Red meat and hides for market for skins, taking 80–90 per China is developing as a key leather cent of Australia's exports.83 market for the Australia alpaca industry. According to current Exporters of red meat and hides The ChAFTA is calculated to be exporters China is interested for leather to have welcomed the worth an additional $436 million in establishing an agriculture announcement of a free trade a year to hides, skins, offal sector industry around the alpaca as deal with China. The combined by 2024 — and out to 2030, these they see a market for fibre and value of reducing tariffs by 2023 benefits could total $6 billion. products. A growing worldwide the next nine years to zero is China already takes a combined consumer interest in alpaca calculated as representing a total of $2.3 billion worth of products is expected to generate $11 billion boost to the sector beef, lamb, hides, skins, offal and demand for more producers of by 2030 81. livestock.84 high fashion and high quality homewares, and an increase in Tariffs of 12–25 per cent on Pork meat, offal, hair industries such as the high quality beef will be eliminated by 2023; and processed meat and manufacturing of alpaca carpets tariffs up to 23 per cent on sausages and rugs. sheep meat and goat meat to be eliminated by 2022; and the The Australian pork industry has While shipments to China, 12–25 per cent tariff on offal will welcomed the agreement which Taiwan, Japan and Korea, are be eliminated by 2024. would see tariffs on products increasing, alpaca exports to including pork meat, offal, Europe have declined by more Meat and Livestock Australia hair and processed meat and than 50% over the past eight (MLA) and the Australian sausages, reduced from between years 86. Meat Industry Council (AMIC), 12 to 25 per cent to zero over representing processors, say that four years. 85 Locke, S. ABC Rural (2014), Beef and it has the potential to increase the lamb exporters winners in the free trade agreement with China gross value of beef production The Australian pork industry 86 ABC Rural (2015) Australia alpaca by $270 million annually by 2024. doesn't currently export to China industry doubles last year’s ‘one off’ Out to 2030 the total benefits for and would need to establish record shipment to China beef will approach $3.3 billion.82 accreditation and import protocols before trade could begin. 80 Department of Agriculture and Water Resources (2015) KAFTA boosting 83 Ibid Australian farmgate returns, Media Release, 17 Sept. 84 Ibid 81 Locke, S. (2014), Beef and lamb exporters winners in the free trade agreement with China, ABC Rural 82 Ibid
/ Value Adding to Agriculture in Central West NSW / 55 Horticulture
“The gross value of Appledale Processors Co- grapes) producer, followed by horticultural production operative in Orange have Orange and Forbes. The region (in Australia) is expected to purchased the first mechanical produces high quantities of fruit, increase from $9.3 billion in apple harvester in Australia, particularly the Orange region 2014–15 to $10.2 billion in increasing efficiency and cost which benefits from cold winters, 2020–21.” effectiveness. The mechanically cool summers and high rainfall.89 — ABARES Outlook 2016 harvested fruit will be processed into fresh juice and Overall, the NSW Central West Horticulture (fruit, nut and cider. Appledale has plans to produced 6.4% of Australia’s vegetable production) generated create a new niche for itself as Apples and 4.4% of Australia’s around $84.5 million GVAP a producer of cider. cherries in 2010–11.90 across the 11 LGAs of Central West NSW in 2011. Horticulture The domestic cider market is Within the region, vegetables is focussed largely in the a growth industry. Between accounted for over $37 million eastern part of the region due 2010–2015, the annual growth in GVAP (2011) or 5% of the to access to high security water of cider industry revenue was total value, and fruit and nuts licences and suitable climatic 13.1%. The Australian cider accounted for over $47 million conditions. Economies of scale industry expects to continue in GVAP (2011) or 6% of the total. are a significant factor in the to grow at an annualised 6% Cowra accounted for 35% of success of horticulture in the between 2016–2020.88 the region’s vegetables GVAP region; increasing scale provides followed by Bathurst, Forbes and opportunities for the introduction Currently, Cowra is the highest Cabonne. The GVAP for nuts was of mechanisation and improved producer of vegetables in highest in Cabonne, followed by water efficiency.87 the Central West, followed by Cowra. Bathurst, Forbes and Cabonne. Cabonne is the highest fruit 89 Regional Development Australia 87 RMCG (2016), Central West and Orana and nut (including wine- Central West (2014) NSW Central West Agricultural Industries,p 2 Export/Import Contribution Study 90 Ibid 88 Ibis World (2015) Cider Production in Australia, March
Table 10 Horticultural sector GVAP in Central West NSW
Central West NSW LGA Vegetables $ Fruit and nut $ Fruit $ Nuts $ Bathurst $8,983,550.10 $433,579.10 $409,271.70 $24,307.40 Blayney $8,899.30 $831,729.50 $765,802.20 $65,927.30 Cabonne $6,507,272.00 $30,267,332.00 $30,091,615.00 $175,717.00 Cowra $13,060,309.00 $1,264,256.00 $1,187,082.00 $77,174 Forbes $6,788,660.00 $5,783,637.00 $5,783,637.00 - Lachlan - $81.00 $81 - Lithgow $134,804.00 $72,339.00 $64,526.00 $7,813 Oberon $1,338,488.00 $38,226.00 $38,226.00 - Orange $439,669.00 $8,486,112.00 $8,433,561.00 $52,551 Parkes - $1,103.00 $1,103.00 - Weddin $92,006.00 $145,820.00 $145,820.00 - Total (2011) $37,353,657.40 $47,324,214.60 $46,920,724.90 $403,489.70 Total (2006) $12,788,768.00 $59,514,444.00 $59,068,796.00 $445,648.00 // Source: Dept of Agriculture — ABS Agri data. Note the ABS suggests caution when assessing data with low values.
56 / Value Adding to Agriculture in Central West NSW / Vegetable producers Central West NSW Cowra Bathurst Forbes Cabonne In 2011, Central West NSW produces; Fruit & Nut producers Central West NSW 6.4% (including wine grapes) of Australia’s Cabonne Orange apples Forbes 4.4% of the region’s of Australia’s fruit & nut GVAP 64% come from cherries Cabonne
of the region’s vegetables GVAP 35% come from Cowra
The value of vegetables increased // Improving the shelf life of The changing by over 192% between 2006 and fresh produce through new wine industry in 2011, whilst the value of fruit and packaging technologies such Central West NSW nuts decreased by 20% during as high pressure processing the same period. (see Botanica Case Study) Central West NSW includes two // Developing high nutrient juices distinct “official” wine regions — Niche horticulture currently from second grade fruits such the warm climate Cowra Wine produced in Central West NSW as cherries and apples. Region known for its Chardonnay, includes, but is not limited to; // Cider and wine making, Shiraz and Italian varieties, and // Asparagus bottling, branding and selling, the cool climate, higher altitude // Bee pollen from paddock to glass. Orange Wine Region, known // Honey // Regional branding for for its Shiraz, Cabernet and // Berries domestic and export markets Sauvignon Blanc. Orange’s cool // Olives such as Bite Riot Cherries. climate also allows it to produce // Figs // Development of functional varieties such as Pinot Noir and // Hazelnuts, chestnuts, walnuts food ingredients from even an Australian version of // Truffles horticultural seconds and “ice wine”. // Saffron waste. // Lavender // Growth of agritourism retail The last ten years has witnessed // Heritage and cider apples enterprises such as The a significant restructuring and // Roses Agrestic Grocer in Orange, and downturn in profitability in the farmers’ markets, providing Australian wine industry, due Examples of value adding to sales platforms & collaborative to the global financial crisis and horticulture in Central West marketing for producers. oversupply of the domestic NSW include; market. The Cowra Wine Region
/ Value Adding to Agriculture in Central West NSW / 57 has significantly decreased in area Key Observation The benefits of protected “under vine” and much land has cropping include sustainable, returned to broad-acre cropping, The wine industry in Central efficient production, product grazing or other horticultural West NSW has been through safety and quality control. farming. According to the Cowra a significant restructuring Protected cropping enables Vineyard Association, in 2010 over the past five years, growers to exercise control there were 1433ha under vine in especially the Cowra Wine over environmental conditions the region, and by 2012 the area Region, which has almost such as extreme weather events. had decrease to 833ha under halved in area “under vine”. The need to use chemicals vine. A further 320 ha of vineyard After a few bad years, wine such as pesticides, fungicides were described as “mothballed” regions in the Central West and herbicides to control pests, or non-producing.91 Some of (including the Orange and predators and weeds is greatly the remaining Cowra Wine Cowra Wine Regions) are reduced, water can be reused Region vineyards are working well placed to take advantage and recycled in a closed system, collaboratively on establishing an of the growing middle class and energy costs can be organic niche. Asian wine culture. greatly reduced.
2011 ABS statistics do not show Protected All of these significant control the decline in the Cowra Wine Cropping factors have the potential Region, but the 2016 Agricultural to make protected cropping Census is expected to show Protected (or indoor) cropping is enterprises more attractive to the trend. the broad term for hydroponic risk-averse investors traditionally and greenhouse horticulture. shy of investing in agriculture. The Orange Wine Region has been somewhat less adversely Any horticultural crop can be According to peak industry body effected by the industry grown under protection. Some Protected Cropping Australia downturn, being not as reliant research and experimentation has (PCA), the indoor cropping sector on contracts with large corporate gone into growing blueberries in Australia is worth around grape contracts and with strong under protected cropping by the $1.8 billion at the farm gate per regional branding. Department of Primary Industries. annum, equivalent to 20% of the It is unclear how many protected value of total vegetable and cut After a few bad years, the Central cropping enterprises are currently flower production in Australia.94 West region (including the in Central West NSW. Orange and Cowra Wine Regions) 94 Protected Cropping Australia, is well placed to take advantage Nectar Farms, a newly (2011) Industry Overview, http://www. protectedcroppingaustralia.com/About of the growing middle class Asian established protected wine culture. The continuing rise horticulture enterprise, has in Australian exports last year was expressed interest in establishing achieved without the full benefits 40 hectares of glasshouse, of free trade agreements with including plant nursery and Japan, Korea and China.92 sorting/packing facilities, in Oberon, Central West NSW.93
91 Email correspondence from Jason O’Dea, Windowrie Estate Vineyard and 93 Nectar Farms, Oberon NSW, available Sam Statham, Rosnay Organic Wines, 17 from http://www.nectarfarms.com.au/ May 2016 92 Wine Australia (2016) Export Report
58 / Value Adding to Agriculture in Central West NSW / The sector employs more than // Elimination of the 10 to 30 Fruit 10,000 people directly across per cent tariff on all other fruit the country and is currently by 1 January 2019 The demand for fresh fruit in Asia expanding at between four // Elimination of the 10 to 13 is growing. Gaining new market and six per cent a year, with an per cent tariff on all fresh access is an ongoing issue and average return on investment vegetables by 1 January 2019. accelerating productivity to stay of between 5% and 10% and, for competitive is also challenging high-tech greenhouse vegetable Separate to the ChAFTA given the high price of labour enterprises, a potential return- negotiations, Australia already in Australia. Food processing in on-investment as high as 20% to enjoys quarantine access Australia has become increasingly 25%, per annum.95 protocols for export into non-competitive however China for many horticultural reinvestment in efficiency Key Observation products, and will be able to measures and growing demand take immediate advantage of for Australian made products Given its proximity to tariff reductions for a range of may see re-invigoration of the major markets and strong products including citrus, grapes, sector. New fresh fruit markets horticultural background, almonds, macadamias, mangoes will continue to be important for Central West NSW may and some cherries. the industry. be an attractive location for future protected There are no changes to Australian fruit growers and cropping infrastructure and Australia’s domestic science and wholesalers have faced difficult investment. risk-based quarantine measures trading conditions between 2011 as a result of ChAFTA.96 and 2016, as the dominance of Export Australia’s two large supermarket Opportunities Canberra to Singapore — a chains has reduced farm gate potential game changer for prices and put pressure on China is a rapidly growing Central West NSW wholesalers. market for Australian horticultural products, with exports worth $111 Singapore Airlines has announced Various FTAs are anticipated million in 2014–15 — up from it will commence flights from to help return the industry $14 million in 2009–10. However, Canberra Airport in September to growth in the five years to China applies some of its highest 2016. The ability to transport 2021 as exports increase. The tariffs on horticultural products. produce by air from Canberra to perception of high quality Singapore is a potential game- Australian fresh food produce in Under ChAFTA, all tariffs on changer for the Central West in international markets will work to horticultural products will be terms of exporting good into the industry’s benefit, helping to progressively eliminated. Key Asia, especially time-sensitive ease pricing pressures. outcomes include: horticultural produce. Singapore // Elimination of the 10 to 25 Airlines connects with 11 cities The China-Australia Free Trade per cent tariff on macadamia in China.97 Agreement will reduce fruit tariffs nuts, almonds, walnuts, from 10.0% to zero by 2020 and pistachios and all other nuts 96 DFAT, (2016) Fact Sheet: Agriculture the Japan-Australia Economic by 1 January 2019 and Processed Food, Partnership Agreement will remove // Elimination of the 11 to 30 97 Canberra Airport (2016) Singapore tariffs of up to 34.0% by 2031. Airlines to Make History with new Capital per cent tariff on oranges, Express https://www.canberraairport. The Korea-Australia Free Trade mandarins, lemons and com.au/2016/01/singapore-airlines/ Agreement has already eliminated all other citrus fruits by 1 January 2023
95 Ibid
/ Value Adding to Agriculture in Central West NSW / 59 a 24.0% tariff on cherries and is of the produce commonly safety and eating quality, as well set to remove tariffs on other requires the use of labour to as high social and environmental Australian fruit produce between hand pick the vegetables. This stewardship credentials of 2018 and 2025.98 puts the vegetable industry at a producers.101 Australia’s tree nut disadvantage to other agricultural sector believes the new FTAs The elimination of the 24% tariff industries as it limits vegetable could encourage export growth, on cherries to Korea has seen growers’ ability to introduce especially for macadamia nuts.102 Tasmanian cherry exports grow mechanised technologies (which from virtually zero in 2014 before allow for cost cutting) as a Wine KAFTA's entry into force to over substitute for labour. $3.5 million in the first seven China’s wine import market is months of the agreement— an A number of Australian vegetable growing dramatically, doubling in increase of almost 5000%.99 growers have successfully built size since 2009–10 to be worth markets in Singapore and Japan $2.1 billion in 2014–15. Key Observation and are among the leading sources of imports for several China is Australia’s third- China is a rapidly growing vegetables. This success has been largest export market for wine, market for Australian achieved despite the price of worth $269 million in 2014–15. horticultural products, with vegetable imports from Australia However, Australia competes exports worth $111 million often significantly exceeding with New Zealand and Chile, in 2014–15 — up from the price imports from lower both of which have preferential $14 million in 2009–10. cost and geographically closer wine access under their FTAs Under ChAFTA, all tariffs on countries in East Asia. This with China. China’s wine imports horticultural products will be shows that factors other than from Chile have increased almost progressively eliminated. This price (such as quality, reliability, eleven-fold since its FTA with presents new opportunities availability and good supply China entered into force in 2006. for the Central West NSW line connections) are important // Under ChAFTA, tariffs of 14 to region’s strong horticultural contributions to success in Asian 20 per cent on Australian wine sector, including potential vegetable markets.100 imports will be eliminated by 1 to increase apple and cherry January 2019.103 production in the eastern Nuts // Tariffs of up to 65 per cent on part of the region to tap other alcoholic beverages and into the growing fresh fruit Nut production in Central West spirits will be eliminated by 1 market in Asia. NSW is predominately hazelnuts, January 2019.104 chestnuts and walnuts. Vegetables 101 Australia Nut Industry Council (2014) Tree nut production in Australia Growing for Success, Typically, vegetable growing is dominated in scale by almonds 102 Ibid in Australia is more labour and macadamias, with the former 103 RMCG (2016), Central West and Orana Agricultural Industries, intensive than other agricultural representing more than 50% of 104 Ibid industries. The delicate nature the total area planted and the tonnage produced. 98 IBIS World (2015), Bearing fruit: Free trade agreements offer growers, wholesalers much needed boost http:// The Australian tree nut industry media.ibisworld.com.au/2015/10/22/ is likely to surpass $1billion in bearing-fruit-free-trade-agreements-offer- export sales before 2025, due to growers-wholesalers-much-needed- boost/ strong worldwide demand, food 99 Department of Agriculture and Water Resources (2015) KAFTA boosting 100 RMCG (2016), Central West and Australian farm-gate returns, Media Orana Agricultural Industries, Release, 17 Sept
60 / Value Adding to Agriculture in Central West NSW / Irradiation The NSW Department of Key Observation Primary Industry is looking into Potential to increase the concept of a ‘cabinet style’ Given the existing established horticultural export irradiation treatment plant that linkages in Central West opportunities105 could potentially be placed in NSW between research packing houses. This would institutions, government World trade of horticultural mean that those horticultural and agricultural producers, commodities is continually commodities can be treated by the diversity of agricultural growing and accompanying this irradiation, reducing the amount produce in the region, and is an increased risk of introducing of domestic transportation to a the potential establishment exotic pests and diseases in centralised treatment facility. The of a large scale High Pressure the trading countries. There are cost of the plant is expected to be Processing and packaging many different types of treatment around AUD$400,000. facility in Cowra, Central methods, however, irradiation is West NSW may be ideally the only non-chemical treatment As the plant also uses x-ray placed for future investment method that will allow fruit technology rather than nuclear into a centralised irradiation such as NSW cherries to be technology, product labelling treatment facility. airfreighted into premium China may not require the nuclear markets. International markets symbol. are now increasingly accepting commodities treated by irradiation, however, in Australia there is only one plant that is able to handle large volumes of product for treatment and this plant is based in Brisbane.
105 Email interview with Dr Fay Haynes, International Engagement, NSW Department of Primary Industries, 11 May 2016.
/ Value Adding to Agriculture in Central West NSW / 61 Dairy
“The Central West has secure Dairy represents a relatively small underground irrigation water, proportion of the total Central quality soils and excellent dairy West GVAP at around 1.8% in cow climate. With an attention 2011.106 The combination of from government for freight undulating topography, available infrastructure and investment irrigation on the river flats of the attraction programs, this area Lachlan River and fertile soils could really become the next make Forbes and Gooloogong milk bowl for Australia.” highly suitable for dairying. — Erika Chesworth, Little Big Dairy 106 NSW Trade and Investment, Value of Agricultural Production Data 2011
Table 11 Number of Dairy Cattle Farms, 2011
% of LGA Dairy % of Dairy Cattle No of Dairy LGA No of stock Cattle Farms to Farms by LGA in the Cattle Farms NSW RDACW region Bathurst 1,213 10 0.68 12.2 Blayney 1,021 8 0.55 9.8 Cabonne 2,004 13 0.89 15.9 Cowra 2,131 14 0.96 17.1 Forbes 9,179 13 0.89 15.9 Lachlan 12 2 0.14 2.4 Lithgow 12 5 0.34 6.1 Oberon 1 3 0.21 3.7 Orange 286 7 0.48 8.5 Parkes 28 1 0.07 1.2 // Little Big Dairy near Dubbo value added Weddin 508 6 0.41 7.3 through niche branding and marketing. Total 16,395 82 5.62 100
// Source: NSW Trade and Investment, NUMBER AND SIZE OF SELECTED AGRICULTURAL INDUSTRIES 2011
Table 11 shows that within the As at March 2016, there were West NSW region, however, in Central West NSW region in 20 dairies (as distinct from dairy neighbouring Orana, single source 2011 there were approximately cattle farms) operating in the 11 boutique milk producer Little Big 82 dairy cattle farms with over LGAs of Central West NSW.107 Dairy is located near Dubbo. Little 16,000 head of cattle. The Cowra Big Dairy’s point of difference is LGA had the most dairy cattle Currently, value adding to dairy in “single source” milk produced farms in Central West NSW at Central NSW is limited, including solely on their family farm. Little 17.1% of the total (14 dairy cattle boutique cheese maker Second Big Dairy produces one and farms), closely followed by Forbes Mouse Cheese Company in two litre bottles across various and Cabonne (13 farms each). Orange who source raw milk categories including full cream, no Forbes, however, had the greatest from local producers, and cream, less cream, premium non number of stock at 9,179 followed Jannei Goat Dairy and cheese homogenised and flavoured milks. by Cowra with 2,131 stock. maker in Lithgow. There are no Little Big Dairy Company also milk processors in the Central has cream products and is now investigating yoghurt.
107 NSW Food Authority figures
62 / Value Adding to Agriculture in Central West NSW / In Orange, biotechnology Under the China-Australia Free Recent changes to China’s company Agritechnology uses Trade Agreement (ChAFTA), the e-commerce regulations mean dairy products for industrial 10% to 20% tariffs which currently that from April 2016, goods microbiology applications. apply to the dairy sector will bought and sold online to China be phased out over ten years will be subject to new duties. Cottee, a century old Australian (around 2026), while the 15% Some food suppliers, such as family company (best known for tariff on infant formula will be powdered milk providers, will be the iconic Cottee’s Cordial brand), phased out over four years required to have their product continues to be an innovator in (around 2020). licensed or re-licenced by the sourcing, manufacture, and China’s food and drug regulators. utilisation of a broad range of The signing of the FTA is likely Ensuring Australia’s food safety naturally-derived dairy ingredients to fuel increased Chinese credentials in dairy is essential in for food, health and industrial investment in the Australian this respect. markets. Although Cottee’s dairy dairy supply chain, both at the interests are predominantly production and processing These countries will likely outside of the Central West, their stages. China may be wary continue to exhibit annual links to the region and knowledge of a repeat of the food safety growth rates in dairy capital could represent an issues which severely impacted consumption that are well above opportunity for dairy producers in the Chinese dairy sector in the the world average. Within the the Central West. past, consequently, securing ASEAN region, the fastest rate of alternative sources of supply growth is expected in Indonesia Other value added dairy products in Australia. At the same time, and Vietnam.110 include calcium powder, other major global investors are colostrum, UHT Milk, milk powder likely to explore opportunities in With per capita dairy consumption concentrate and whey protein the Australian dairy production rates among these nations concentrate. sector to take advantage of the currently very low by global opportunities offered by the standards, the potential for growth The NSW Branch Dairy Goat Chinese market and enhanced is huge. It is expected local milk Society of Australia has 187 by the FTA. production in these countries members (as at May 2016) will continue to grow, supported including commercial dairies, One factor which further affects by further private and public soap manufactures and cheese the Australian dairy sector is the investment. However, local farmers makers across the state. lack of protective safeguards such face difficulties in increasing milk as those which currently apply to output significantly, meaning local Export the New Zealand’s dairy exports milk production is unlikely to close Opportunities to China. Under the New Zealand the gap between demand and FTA; tariffs are applied once a production.111 The rapid growth of middle quota is reached, though under classes in Asia, and their the Australian agreement, these Investment in increasing dietary preference safeguards only apply to whole Dairy for animal protein, will underpin milk powder. the world dairy sector for years Australia’s largest single site dairy, or decades to come. However, The China-Australia FTA should Moxey Farms, is located between according to Austrade’s Premium place Australian dairy on a more Gooloogong and Forbes in Food Report, in 2014 to 2015, level playing field against key Central Western NSW. In 2015, the fresh milk became the fastest- competitors in the Chinese consortium Australian Fresh Milk growing category of dairy market, such as New Zealand (NZ) Holdings (AFMH) was formed imports into China, increasing by whose export volume increased by the Moxey family, New Hope over 50%. In 2014/2015, 34% of eight-fold since securing a China- (a large Chinese agribusiness Australian milk production was NZ FTA in 2008.109 group), Leppington Pastoral exported.108 109 ANZ (2015) Opportunity China — the 110 ANZ (2015) Australian Dairy Industry Report 108 Dairy Australia (2015) Australian Dairy CHaFTA and implications for Australian Industry in Focus Businesses 111 Ibid
/ Value Adding to Agriculture in Central West NSW / 63 Company (the Perich family) and Key Observation Freedom Foods joined to form Moxey Farms run nearly four- The Australian Fresh Milk thousand milking cows which Holdings acquisition shows produce 50 million litres of milk confidence in the region each year. The Moxey family as a reliable and profitable continue to operate the business. destination for dairy investment. The Moxey family, who have been farming for 40 years, made Key Observation the decision to move from Richmond to Central Western The Central West provides NSW in order to increase their an alternative location for capacity to grow feed. They dairy farm industries to purchased their Gooloogong expand by relocating from property in 1992 and started more constrained sites on milking in 1998. the NSW coast where the growth of urban and lifestyle AFMH plans to increase milk developments is causing land production destined for the use conflicts and inflating local and Chinese markets and farmland prices. is expected to inject about $80 million into Moxey Farms and greenfield dairy sites elsewhere.
The China-Australia Free Trade Agreement (ChAFTA) will reduce dairy product import duties to zero and Chinese fresh milk imports grew by 74% in 2015 and increased tenfold between 2010 and 2016.112
112 Damon Kitney, The Australian (4 Aug 2015) China’s Liu Yonghao New Hope door to Australian dairy
64 / Value Adding to Agriculture in Central West NSW / Wool
Over the past two decades, wool Reg Dist Wool Gvap Central West production in the Central West has declined in accordance with reducing sheep numbers.113 There was 50% less wool produced in 2010 than in 1992. However, ORANGE PARKES $1M LACHLAN $22M sheep numbers have stabilised $24M and are beginning to rebuild.114 CABONNE $29M BATHURST LITHGOW $12M $1M FORBES The GVAP of Wool in the Central $20M BLAYNEY West was $149M in 2010–11. $6M COWRA The Local Government Areas WEDDIN $14M OBERON that contributed most to wool $14M $6M production were Cabonne at $29m or 19.59%, Lachlan at $24m // Source: RMCG (2016), Central West and Orana Agricultural Industries or 16.10%, Parkes at $22m or 14.39 and Forbes at $20m or 13.41%.115
Wool forms an important Table 1.0 Central West NSW regional distribution of Shorn Wool GVAP, 2011 part of the mixed farming LGA $ GVAP Shorn wool 2011 % of total in Central West NSW operations of the region. Wool is Bathurst 11,795,286.20 7.88 a highly versatile and adaptable Blayney 6,396,480.70 4.27 enterprise and is produced over Cabonne 29,333,835.00 19.59 Cowra 14,151,707.00 9.45 a wide variety of landscapes Forbes 20,070,341.00 13.41 and climates from the cooler Lachlan 24,100,668.00 16.10 and wetter tablelands in the Lithgow 1,243,297.00 0.83 east of the region to the more Oberon 6,079,931.00 4.06 undulating topography of the Orange 612,885.00 0.41 Parkes 21,545,247.00 14.39 slopes and plains in the west. Weddin 14,386,779.00 9.61 Merino is the predominant breed Total 149,716,456.90 100.00 in the region, with the remainder a mixture of cross bred sheep // Source: Department of Trade and Investment/ABS -VALUE OF AGRICULTURAL mainly for meat production.116 PRODUCTION DATA
Australia's wool processing industry was once an important part of our national and rural economy. Once the country
113 RMCG (2016), Central West and Orana Agricultural Industries p29 114 Ibid 115 Ibid 116 NSW Department of Primary Industries (2012) Central West Wool Profile
// Bryton Wool bales. Photo Kate Barclay. / Value Adding to Agriculture in Central West NSW / 65 boasted wool carbonising plants the only one of its type in the in most states, but now only world. (See Adagio Alpaca Mill three remain. Following the Case study for more information.) collapse of the reserve price Alpaca is a dual purpose animal, scheme in the early '90s, many with potential for meat and hide wool processors closed, and the value adding as well as fibre. rise of China as a processing powerhouse means there are In May 2016 the Australia now very few processors left. Alpaca Association received funding from the Federal Key Observation Government for professional alpaca wool classer training Wool processing has almost under the Industry Skills Fund. disappeared from Central West NSW. Niche processors Export still exist, such as the Nundle Opportunities Woollen Mill near Tamworth, but wool is sent to Victoria The long-term prospects for to be scoured before the demand of Australian and returning to Nundle for NSW wool will hinge mostly spinning. The establishment on global economic conditions of the Adagio Alpaca Mill in and income growth, and less Orange indicates there are on the relative volume of wool opportunities for SMEs in production compared with the wool processing and value production of other textile fibres adding in the region. or on the relative price of wool compared with these other fibres. Alpaca fibre in Central West NSW Over the last two decades, China has become the dominant The Central West is an emerging buyer of Australian greasy wool. hub for alpaca fibre growers. Despite tougher environmental According to the Australian regulations and rising labour Alpaca Association Central costs, China is expected to Western Region, there are 1,468 remain the main processor of alpaca studs in Australia, 466 Australian wool and the China studs in NSW of which 74 are Australia Free Trade Agreement located in Central West NSW.117 (ChAFTA) will (marginally) assist this relationship. However, The Central West of NSW now increasing global demand for has its own alpaca fibre mill food is expected to constrain based in Orange — the largest expansion of wool production in alpaca fibre mill in Australia and NSW and Australia.118
117 Email interview with Jennie Menzies, 118 Department of Primary Industries Secretary, Australian Alpaca Association (2015) NSW Wool industry and future Central Western Region, 18 May 2016 Opportunities
66 / Value Adding to Agriculture in Central West NSW / Broad-acre cropping
Broad-acre cropping is the largest Post farm gate value adding agricultural industry sector in opportunities are becoming the Central West. Significant increasingly available to the broad-acre crops in the Central broad-acre cropping sector, West include wheat, barley, oats notably through e-commerce and canola. In 2010, the Central and biotechnology. West region produced 11.9% of Australia’s national oats and grain “I believe that in the future we and 5.2% of all cereal crops.119 will have grain varieties with enhanced health properties The region uses a mix of supply that will attract a premium in chains servicing export, interstate, the market. We are working on regional and metropolitan wheat varieties with reduced markets. A large proportion of allergenicity properties. We’re bulk grain export is freighted by working on new high value rail to ports whereas domestic options for canola meal. feed grain is usually delivered We also think there is a lot using more flexible road deliveries of potential in new uses for to individual customers.120 protein isolated from pulses.” — Professor Chris Blanchard, Value adding in the broad-acre Functional Grains Centre, cropping sector is predominantly Wagga Wagga done on-farm (rather than post farm gate as is the focus of this report) as farmers and agribusinesses harness science and new technologies to create greater efficiencies and cost competitiveness in In 2010, Central West farm production. Increasing NSW produced; competition and cost of labour is leading to the development and adoption of 11.9% new technologies, software, of Australia’s mechanisation and robotics, and “precision agriculture” is creating oats & opportunities for farmers to optimise returns on inputs while preserving resources. grain
119 Regional Development Australia (2014) NSW Central West Export/Import Contribution Study 120 RMCG (2016) Central West and Orana Agricultural Industries Report
/ Value Adding to Agriculture in Central West NSW / 67 Overview of broad-acre cropping in Central West NSW Figures from Department of Trade and Investment/ABS — VALUE OF AGRICULTURAL PRODUCTION DATA — INTERACTIVE SPREADSHEET unless otherwise stated.
Cereals Crop GVAP 2011 Trends in Central West NSW $373,544,387.40 GVAP in Central West NSW in 2011. The value of cereal crops and other broad-acre crops increased Wheat for grain Lachlan Shire produced $146,391,594.00 of significantly between 2006 and 2011. the total value (39%) followed by Parkes at $74,034,697.00 Lachlan Shire produced $30,585,497.00 Value in Barley for grain followed by Barley for grain Parkes at $24,740,259.00 and Forbes at $13,026,448.00. Lachlan Shire produced $13,317,900.00 of Oats for grain the total Value of Oats for grain followed by Parkes at $5,196,102.00 An enterprise in Parkes produces buckwheat flour and kernels Ancient Grains (e.g. and ancient wheats including spelt for the Australian and export buckwheat and No data currently available markets currently developing a range of high quality ancient spelt) wheat baking flours.. Oilseeds Weddin Shire produced $15,234,739.00 Canola is the most significant oil seed crop in region. The of the total Value of Canola followed by total $ Value of Canola Oil in Central West NSW increased by Canola Forbes Shire at $14,460,531.00. 445% between 2006 and 2011 from $11,026,698.00 (2006) to $60,038,471.50 in 2011.
Legumes/pulses
Parkes Shire produced $4,314,777.00 The total $ Value of Lupins for Grain in Central West NSW Lupins for grain of the total value of Lupins for grain increased by 270% between 2006 and 2011 from $2,598,105 followed by Weddin at $2,767,533.00. (2006) to $9,614,011 in 2011. The total $ Value of Chickpeas in Central West NSW increased by 634% between 2006 and 2011 from $352,898 (2006) to Forbes Shire produced $830,618.00 of $2,589,379 in 2011. Chickpeas the total value for Chickpeas followed by There is a growing Indian market for chickpeas. Pakistan, Parkes at $800,404.00.. Bangladesh, and India receiving nearly 80% of all exported Australian chickpeas. 120. Cotton
The total $ Value of Cotton in Central West NSW increased Cotton provided $8,094,510.00 in GVAP by 122% between 2006 and 2011 from $3,645,996 (2006) to in the Central West in 2011 made up of $8,094,510 in 2011. Cotton is currently grown in both Lachlan Cotton $4,207,811.00 from Lachlan Shire and and Parkes Shires. $3,886,699.00 in Parkes.. Cotton is expanding into non-traditional regions such as Forbes as it is seen as one of the best crops for delivering good results.
Other broad-acre crops with potential in Central West NSW Hemp fibre crops were legalised in NSW in 2008. Hemp is currently used in Australia as a source of clothing and building It is unclear if hemp is currently being products. grown in Central West NSW. At present, hemp cannot be used in food in Australia as it is The Australian Bureau of Statistics (ABS) prohibited in the Australia New Zealand Food Standards Code. does not collect data on Hemp in the Hemp If hemp is legalised for consumption (hemp seeds are high in agriculture census or surveys. Hemp will nutrients) in Australia it could result in new industry development not be collected in the upcoming 2016 opportunities. agriculture census. There may be potential for hemp industries in the high quality . Lucerne and hay growing areas of the Central West such as the Lachlan Valley.121 Growers in Forbes, Condobolin and Young are reporting Mustard opportunities in mustard seed.
68 / Value Adding to Agriculture in Central West NSW / 121 122
Export the terms of trade as well as “Australian agriculture is well- Opportunities create a competitive advantage regarded but not well-positioned over international grain trading in China so the initial tariff The ratification of the China competitors. reductions under ChAFTA Australia Free Trade Agreement plus ongoing work to ensure (ChAFTA) will deliver benefits to Grain Growers CEO, Alicia recognition of our clean, green Australian grain growers through Garden, notes that ChAFTA and and safe brand for agricultural the reduction of tariffs and better the ASA100123 show how strong products puts Australia on the access to markets in the future. the partnership between China front foot for the years ahead,” However, little has changed for and Australia has become and said Ms Garden. wheat and canola growers and it that Australian grain growers appears to be business as usual could benefit from these for cotton, wheat, sugar, rice and close links124. oilseed producers. 123 “The Australia Sino One Hundred The removal of tariffs by 3% on Year Agricultural and Food Safety Partnership (ASA100) aims to promote, barley, 2% on sorghum and 2% develop and advance international on oats as well as on pulses, trade in Australian agriculture and manufactured food products, with speciality grains and processed a particular focus on China, for the grain products add value to benefit of the Australian economy and community”. More information available from http://www.asa100.net.au/ 121 GRDC (2012) An Economic Analysis 124 Ibid of GRDC Investment in the National Chickpea Breeding Program 122 NSW Department of Primary Industry (2013) Upper Hunter Region Hay and Hemp Profile.
/ Value Adding to Agriculture in Central West NSW / 69 Survey Analysis
As part of the development of The survey shows that The top five costs to respondents this report, an online survey was respondents employed an equal businesses were; created in order to acquire insight number of full-time and part- 1. Labour and data from agribusinesses time workers and most annual 2. Electricity/energy within the region. turnover was between $200,000 3. Fuel and $1.5 million. 4. Insurance The survey established basic 5. Packaging and freight business information including The top 5 reasons respondents (equal fifth) approximate annual turnover, identified for being located in number of staff, location and Central West NSW were; Most respondents in the past core business type. It asked 1. Family business/farm already two years had either introduced participants why their business located here ‘a new or significantly improved was based in Central West 2. Climate and geography product or service to the market’ NSW and the advantages and 3. Proximity to major cities and or ‘a new market’. disadvantages of their location. regional centres Participants were also asked 4. Lifestyle 74% of respondents did to describe any value adding 5. Affordability not export and this again activities they were currently presents a potential opportunity engaged in or planned to engage Key Observation for business expansion. in. (Please see Appendix for full survey questions). Climate, geography, Value adding opportunities proximity to major centres, perceived by respondents were: Surveys were distributed lifestyle and affordability 1. Export (17%) through various food and are among the main reasons 2. Packaging (17%) agribusiness networks including businesses are located in 3. Products (16%) RDA Central West's own Central West NSW. These 4. Markets (11%) database, Agribusiness Today characteristics provide an 5. Tourism (11%) forum members (including opportunity for the region to regional LLSs), Farmers' Markets potentially further promote The Agricultural SME networks and through RDA these attributes. Freight Task Central West's social media Many small to medium sized pages (Twitter and Facebook) The top 5 impediments to agribusinesses and niche and newsletter. 27 surveys value adding in Central West producers, including wineries were completed and returned NSW were; and horticultural producers, for analysis and represented a 1. Access to government grants report significant difficulties in range of agricultural sectors and and concessions distributing products directly to businesses including wineries, 2. Time constraints (more time clients such as retailers, cafes and meat processors, dairies, spent working in the business restaurants in metropolitan areas horticulturists, grain growers, than on the business) such as Sydney and Canberra. cheese makers, fibre processors, 3. Freight and logistics These businesses need to get bee keepers and orchardists. 4. Access to finance and capital small quantities (for example, one 5. Access to internet services or two cases of wine) directly to high expectation clients in a timely manner. Freight into
70 / Value Adding to Agriculture in Central West NSW / Sydney goes to single distribution points but needs to be distributed further to individual clients. Some producers find Australia Post, though very costly, the best direct solution, however Australia Post is not appropriate for products needing cold storage such as cheese, dairy and milk. Many producers in the region drive and distribute their products into metropolitan areas themselves, resulting in high fuel and time costs to the business.
To date, it would appear that no freight business has been able to set up a cost effective businesses model in this region to solve this niche market distribution problem.
Second Mouse Cheese Co., located in Orange are an example of a niche agribusiness experiencing difficulties with distribution.
“It is very difficult to get small batches of product delivered to Sydney clients, and refrigeration is also an issue,” says cheesemaker Kai Woltmann. “I deliver to wholesale clients in Sydney myself when I go down for farmers’ markets twice a month, but a cost effective door to door refrigerated service would make life much easier.”
Key Observation
Cost of freight and logistics is a fundamental problem for may agribusinesses in the region, for both bringing goods into the region and for distributing to metropolitan clients.
// Popcorn from Mulyan, Cowra. Photo Kate Barclay.
/ Value Adding to Agriculture in Central West NSW / 71 Key Observations
Jobs & Skills an attractive location for and cherry production in the future protected cropping eastern part of the region to Although it is one of the most infrastructure and investment. tap into the growing fresh fruit important sectors and employers // The Australian Fresh Milk market in Asia. in the region, jobs are shrinking in Holdings acquisition shows // The ability to transport agriculture in Central West NSW. If confidence in the region produce by air from Canberra the region is to leverage the value as a reliable and profitable to Singapore — and 11 Chinese adding opportunities afforded destination for dairy cities connected through by the predicted growth of the investment. Singapore — is a potential agricultural industry, it will have // The Central West provides game-changer for agricultural to consider the consequences an alternative location for exports from Central and develop strategies to manage dairy farm industries to West NSW. shrinking jobs and skills gaps. expand by relocating from more constrained sites on Regional Agricultural the NSW coast where the Innovation Hubs Sectors growth of urban and lifestyle developments is causing land // Central West NSW is ideally // High growth expectation in use conflicts and inflating placed to be an Innovation poultry meat demands over farmland prices. Hub for research and the the coming decade presents // The domestic cider market application of biotechnology in an opportunity for increased is a growth industry. Between agriculture due to: poultry meat production in 2010–2015, the annual growth // The region’s diversity of Central West NSW. of cider industry revenue high quality agricultural // Growing export opportunities was 13.1%. produce; exist in Central West NSW // Post farm gate value adding // The region’s proximity for the expansion of niche opportunities are becoming and accessibility to major meat and leather production increasingly available to the centres; including goat, deer and broad-acre cropping sector, // Existing industry confidence alpaca. notably through e-commerce in the region with // The wine industry in Central and biotechnology. two private enterprise West NSW has been through biotechnology ventures a significant restructuring over Export already operating; the past five years, especially Opportunities // The location of the NSW the Cowra Wine Region, which Department of Primary has almost halved in area // China is a rapidly growing Industries; “under vine”. Now the industry market for Australian // The region’s close ties with upheaval has settled, the horticultural products, with Charles Sturt University region (including the Orange exports worth $111 million in and the Graham Centre for and Cowra Wine Regions) is 2014–15 — up from $14 million Agricultural Innovation; well placed to take advantage in 2009–10. Under ChAFTA, // The region’s attractiveness of the growing middle class all tariffs on horticultural to higher skilled workers Asian wine culture and FTA products will be progressively (affordable housing, cost tariff cuts. eliminated. This presents new of living, work/life balance, // Given its proximity to opportunities for the Central schools and higher major markets and strong West NSW region’s strong educational facilities, horticultural tradition, horticultural sector, including medical services and Central West NSW may be potential to increase apple specialists and culture.)
72 / Value Adding to Agriculture in Central West NSW / // The region’s status as one Biofuels and bioenergy present new opportunities for both of seven “centres of regional new opportunities to value add domestic and export value growth” Australia-wide across all agricultural sectors of adding to a broad range of expected to contribute Central West NSW industries; agricultural sectors in over $15b to the national broad-acre cropping, forestry, the region. economy in 2031. dairy, horticulture, beef and // There is significant red meat // Given the established linkages intensive livestock and pork production in the in Central West NSW between region but very little value existing research institutions, Digital adding to regional meat government departments Technology products due to the lack and agribusiness, the diversity of processing facilities, in of agricultural produce in // Advances in digital technology particular for smaller and niche the region, and the potential are creating myriad producers. At least six red meat establishment of a large scale opportunities for on-farm and abattoirs in Central West NSW High Pressure Processing post farm gate value adding. have shut since 2003. and packaging facility in There is an urgent need for // There are few options for Cowra, Central West NSW robust, future-proof and wide- meat to be processed locally should be considered as a reaching telecommunications which are halal and export region for future investment capabilities in Central accredited in or around Central into a centralised irradiation West NSW, specifically West NSW; this increases costs, treatment facility. the rectification of mobile (e.g. freight) for producers blackspots and sufficient in the region who wish to Biotechnology NBN capacity, without take advantage of export which the agriculture sector opportunities internationally. // Agricultural sectors in Central will not be able to grow West NSW with significant domestically or compete on Branding “functional foods” potential an international level. Growth include grain and oil seeds, in the region is currently A unified approach is needed, horticulture and dairy. stunted by inadequate in collaboration with existing // There is significant value to be telecommunications. destination marketing, to realised from agricultural waste // Traceability is an increasingly regional branding between Local streams, currently being done important capability within Government Areas, Regional with cherry waste streams in the supply chain facilitated by Tourism Organisations and the region and could also be advances in digital technology; agricultural stakeholders to applied to grapes, apples, olives in order to remain competitive develop an agreed, authentic, and other stone fruits which this is an area in which Central effective regional agricultural are produced in significant West NSW agribusinesses brand. quantities in the Central West cannot afford to lag behind. // Maintaining and protecting our NSW region. “clean and green” reputation // Research, development and Processing and is critical to the region’s ability training that can assist Central Packaging to command high global West NSW producers to prices for agricultural products. supply worldwide demand for // Processing weaknesses in International competition to sustainable, quality protein and the Central West NSW be “clean and green” means animal feed for both human agricultural supply chain Central West NSW needs to and animal consumption may present opportunities for remain vigilant and unified in respectively should be some niche sectors. this space. explored. // Investment in innovative processing and packaging R&D and infrastructure could create
/ Value Adding to Agriculture in Central West NSW / 73 Collaboration and Co-operation
// There is potential for groups of producers and existing farmers’ markets organisations to lead the expansion of the local food economy in the Central West. // There may be a need for continued advocacy to ensure regional agricultural co-ops are not excluded for eligibility for government grants on the basis of business structure. // Other regions and sectors are collaborating and branding themselves more successfully than Central West NSW. For example, there may be an opportunity for Central West woolgrowers to come together and collaborate like the Kangaroo Island Wool growers.
Freight and Logistics
// Connectivity to market is a key challenge for Central West NSW agricultural SMEs.
// Photo Kate Barclay.
74 / Value Adding to Agriculture in Central West NSW / Bibliography
Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), (2015), Agriculture and Forestry in the Central West Region of New South Wales, ‘About my region’ 15.3, Canberra, April 2015
ANZ, (2015) 'Opportunity China — the ChAFTA and implications for Australian Business'
ANZ, (2015) 'Australian Dairy Industry Report'
Australian Government Productivity Commission (2005) Trends in Australian Agriculture, available at http://www.pc.gov.au/research/ supporting/agriculture/agriculture.pdf
Australian Government (2014) 'National Food Brand — International Research Results'
Australian Nut Industry Council (2014) 'Growing for Success'
Australian Organic, (2014) Australian Organic Market Report
Burrell, A (2010)'Renewable Energies from the Rural Sector' The Organisation for Economic Co-operation and Development
Cattle Council of Australia (2015), National Strategies for Australia’s Grass-fed Beef Sector, Canberra.
Commonwealth Department of Agriculture, Fisheries and Forestry (1999) 'Increasing Value-adding to Australia's raw materials'
Commonwealth of Australia (2015) Agricultural Competitiveness White Paper, Canberra
Commonwealth of Australia (2012) Inquiry into Australia’s Food Processing Sector available at http://www.aph.gov.au/Parliamentary_ Business/Committees/Senate/Former_Committees/foodprocessing/ foodprocessing/report/index
Cook, S. (2016) 'Nurturing the shoots of China's sustainable agriculture' International Institute for Environment
Department of Foreign Affairs and Trade (DFAT) (Jan 2016) Fact Sheet; Agriculture and Processed Food
Food and Agriculture Organisation of the United Nations (FAO) (2004) Revision of World Population Prospects
Grain Growers (2015) 'ChAFTA Door for Australian Grain Growers'
/ Value Adding to Agriculture in Central West NSW / 75 Grains Research and Development Corporation (2012) 'An Economic Analysis of GRDC Investment in the National Chickpea Breeding Program'
Hall, A. & Dorai, K. (2010) 'The Greening of Agriculture: Agricultural Innovation and Sustainable Growth' Organisation for Economic Cooperation and Development
Hajkowicz S., Cook H, & Littleboy A. (2012) 'Our Future World: Global megatrends that will change the way we live. The 2012 Revision' CSIRO, Australia.
Hajkowicz S. & Eady S. (2015) Rural Industry Futures: megatrends impacting Australian agriculture over the coming twenty years, Rural Industries Research and Development Corporation & CSIRO, Australia.
IBIS World Oct (2015) Bearing Fruit; Free Trade Agreements offer growers, wholesalers much needed boost
Ibis World March (2015) Cider Production in Australia
KPMG (May 2013) The agricultural and food value chain: Entering a new era of cooperation.
NSW Department of Planning & Environment (April 2016), Draft Central West and Orana Regional Plan, Dubbo
NSW Department of Primary Industry (2015) NSW Pork Industry Overview
NSW Department of Primary Industry (2015) NSW Poultry Meat Industry Overview
NSW Department of Primary Industry (2015) NSW Poultry Egg Industry Review
NSW Department of Primary Industry (2012) Central West Wool Profile
NSW Department of Primary Industry (2015) NSW Wool Industry and Future Opportunities
NSW Department of Primary Industry (2013) Upper Hunter Region Hay and Hemp Profile
NSW Department of Trade and Investment (2011) Value of Agricultural Production Data
Nunzio, J. (2014) Australia's Food Export Outlook, Future Directions International
Regional Development Australia Central West (2014), NSW Central West Export/Import Contribution Study, Orange.
76 / Value Adding to Agriculture in Central West NSW / Regional Development Australia Central West (2014) Economic Profile, Orange
RMCG (2016), Central West and Orana Agricultural Industries, Sydney
Rural Industries Research and Development Corporation (RIRDC) (2010) Deer Industry Database
Society of Precision Agriculture Australia (SPAA) (2014) Strategic Plan
United Nations Department of Economic and Social Affairs (2015) Revision of World Population Prospects
Victoria State Government (May 2010) Bioenergy from Agriculture
Wine Australia (2016) Export Report, Adelaide
/ Value Adding to Agriculture in Central West NSW / 77 Stakeholders Thank you to the regional and industry agribusinesses who provided bodies consulted their time and insights for this for this report report; include; // Adagio Alpaca Mill // NSW Department of Industry // Agritechnology // NSW Department of // Agrestic Grocer Primary Industries // Appledale Co-op // NSW Department of Planning // Botanica and Environment // Botanical Innovations // NSW Farmers // Bryton Wool // AusIndustry // Australian Wool Network // Central NSW Councils // Buckwheat Enterprises // Central West Business // Caernarvon Cherries Chamber // Cowra Meat Processors // Charles Sturt University, // Igrain School of Agriculture and // Little Big Dairy Wine Science // Mandagery Creek Venison // Functional Grains Centre // Moxey’s Dairy // Central West Farming Systems // Mulyan // Agribusiness Banking // Rosnay Organics organisations // Second Mouse Cheese // Brand Orange Company // Orange Regional Farmers’ // Windowrie Estate Wines Markets
// Photo Kate Barclay. 78 / Value Adding to Agriculture in Central West NSW / Mulyan, Cowra went down that path out here, they can get in other areas, so it but those who chose to grow gives us a window to produce “The family has been here since vegetables have done well. It something that is a premium the 1880s and I’ve been home on gives us comfort to know that product quite often in slots where the farm since 2002. we’re not the only ones doing our competitors don’t have that it and I think there is plenty of advantage.” We grow a lot of crops. The main opportunity for growth. ones are baby spinach, beetroot, We do things that other people asparagus, red onions, popcorn, We have about thirty on staff don’t do. You don’t have to do maize, wheat, canola, chick peas. at the moment. The majority what’s been done before. There So, fairly diverse. Diversification are local and we have a floating are other markets out there. I for us is very, very important. contingent of backpackers. At the believe that you should change moment we’ve got about half a before you are forced to change, The reason we do what we do dozen backpackers but primarily that’s our mantra. Whether or here stems from the 1940s when we draw on a local workforce. not that applies to everyone the Edgell Cannery was built in obviously is a different question. Cowra. This farm started to grow Clean air, beautiful soil, ample For us we like doing what is hard a lot of asparagus and vegetables water and our vicinity to the because if you do what is hard to supply Edgell’s. When the major markets of Sydney and you are going to find you have factory closed and the canning Canberra are advantages of less competitors.” industry waned we decided being in the Central West. The to continue doing what our coastal markets are very close. Ed Fagan, 2016 NSW Farmer of skill-set was, which was in the We have a very temperate the Year. Interviewed at Mulyan vegetable industry. Admittedly, climate (in Cowra) so we don’t in Cowra, May 2016. there weren’t a lot of others that get the harsh extremes that
// Photo Kate Barclay. // Photo Kate Barclay.