Food ScoreCard 2012-13 - Primary Industries and Regions SA...In 2011 the Government of South...

Food ScoreCard 2012-13 PRIMARY INDUSTRIES AND REGIONS SOUTH AUSTRALIA

NOVEMBER 2013

NOVEMBER 2013 FOOD SCORECARD 2012-13 PAGE 2

Food ScoreCard 2012-13

Information current as of November 2013

© Government of South Australia 2013

DISCLAIMER

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

ALL ENQUIRIES

Jack Langberg Primary Industries and Regions SA (PIRSA) Level 15, 25 Grenfell Street GPO Box 1671, Adelaide SA 5001 T 08 8204 9571 E [email protected]


Table of Contents

1. OVERVIEW – FOOD SCORECARD 2012-13 RESULTS 4

2. SOUTH AUSTRALIA’S STRATEGIC PLAN TARGET AND KEY PERFORMANCE AREAS 5

2.1 Gross Food Revenue grows 1% to a record $14.4 billion 5

2.2 South Australia’s Farm Gate value makes a small recovery 6

2.3 Finished Food reaches record level of $4.9 billion (wholesale values) 7

2.4 South Australian Food Exports (overseas) down by 13% to $3.2 billion (FOB) 7

2.5 Retail and Hospitality sales reach $9.3 billion 10

2.6 Food Employment 11

3. SUMMARY AND OUTLOOK 12


To track the advances in the South Australian agrifood and wine industries, Primary Industries and Regions South Australia (PIRSA) has developed a series of industry ScoreCards, which provide detailed value-chain measures1 of annual performance. This report outlines the 2012-13 performance for South Australia’s food industry, and tracks performance against the Food Target articulated in South Australia’s Strategic Plan.

1. OVERVIEW – FOOD SCORECARD 2012-13 RESULTS

The South Australian Gross Food Revenue (GFR) has continued to grow in 2012-13. Table 1 shows how results along the value-chain contributed to the 2012-13 South Australian GFR growth, with retail and service sales and net interstate trade leading the way. Despite a decline in the value of overseas exports, GFR grew by $112 million (or 1%) reaching a record level high of $14.4 billion.

Table 1: South Australia’s Food ScoreCard Summary, 2012-13, $ million

Industry

Farm Gate Value

Finished Food Value

Overseas Exports

Net Interstate

Trade

Retail &

Service Sales

Gross Food

Revenue Field Crops 1 240 980 1 976 259 2 062 4 299

Livestock 1 260 1 986 726 797 2 118 3 641 Dairy 223 228 8 156 696 860

Horticulture 677 1 134 139 515 1 951 2 605 Seafood 391 495 266 114 441 822

Other - 101 71 60 2,063 2 195

Total Food ($m) 3 791 4 924 3 186 1 902 9 332 14 421

$m Value change from 2011-12 55 45 -487 19 579 112

% Growth since 2011-12 1% 1% -13% 1% 7% 1%

Ave Annual Growth since 2001-02 1% 3% 1% 5% 8% 4%

Highlights over the year for the 2012-13 Food ScoreCard include:

• Gross Food Revenue increased by $112 million (1%) to reach record levels of $14.4 billion; • Finished Food values have grown by almost $45 million (1%) to reach record levels of

$4.9 billion; • Food Production (measured in farm gate values) increased by $55 million (1%), due to moderate

increases in grain, horticulture and seafood and despite a decline in the value of meat and milk production;

• Total Overseas Exports declined $487 million (or 13%) from the record levels of 2011-12 to $3.2 billion;

• South Australian Food Retail and Food Service sales experienced exceptional growth of $579 million (7%) to reach a record over $9.3 billion.

• South Australian Food Imports rose $11 million (1%) to just over $805 million.

1 These measures include primary production, measured in farm gate terms; secondary Finished Food values measured in wholesale prices; trade and tertiary consumption through retail and food service sales and measured at point of sale.


2. SOUTH AUSTRALIA’S STRATEGIC PLAN TARGET AND KEY PERFORMANCE AREAS

2.1 Gross Food Revenue grows 1% to a record $14.4 billion

In 2011 the Government of South Australia released an updated South Australia’s Strategic Plan (SASP), including, for the first time, a target to grow the contribution made by the South Australian food industry to $20 billion by 2020 (baseline: 2001-02)2. This represents an average increase of around 4.5% per annum over the nine year period.

Figure 1 shows the annual trend in the headline GFR, from the 2001-02 baseline year along with the 2019-20 target.

Figure 1: Performance and Target for Gross Food Revenue (GFR), South Australia

2001-02 to 2019-20 ($ million nominal)

Figure 1 shows that over the 2012-13 year, GFR has grown by $112 million (up 1%) to reach a record $14.4 billion. Since 2001-02 GFR has grown broadly in line with the 2020 SASP target goal for 2020.

2 Gross Food Revenue captures all food sales that have occurred within South Australia, including commodity and Finished Food products that have been sold for domestic consumption, exported interstate or overseas.


2.2 South Australia’s Farm Gate value makes a small recovery

Table 2 presents a more detailed picture of the key South Australian sectors that comprise South Australia’s food production. After a disappointing fall in 2011-12, farm gate values in 2012-13 made a small recovery of $55 million (or 1%), with positive contributions from all of the main industries apart from meat and dairy, which experienced slight declines.

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

• Field crops – Overall farm gate values rose 7% from the previous year. This was due mainly to a 27% increase in average price received and despite a 16% fall in production volumes.

• Livestock – The overall livestock (or meat) industry experienced mixed results with production value declining by $34 million. Beef, chicken meat and some of the smaller sectors like goats, eggs and kangaroo meat all had gains with sheep, lamb and pig meat all having declines.

• Dairy – Values were down $6 million (2%) due to a 6% decrease in the volume of milk produced and despite a 10% improvement in the average farm gate price.

• Horticulture – A slight increase in values with potatoes and citrus being the main positive movers. • Seafood – Although the value of seafood production only rose modestly, significant gains were

experienced in the value of southern blue fin tuna due to a 14% increase in volume, and a modest rise in lobster prices.

Table 2: South Australia’s Food Production (Farm Gate Value)

by sector and product, year to 2012-133

Value $ million Value Industry 2011-12 2012-13 % change

Field Crops Total 1 158 1240 7% Wheat 716 772 8%

Malting barley 126 137 9% Other grain 316 331 5%

Livestock Total 1 294 1 260 -3% Beef 369 438 19%

Pig meat 181 170 -6% Sheep & Lamb meat 508 401 -21%

Chicken meat 209 215 3% Other livestock 27 36 31%

Dairy Total 229 223 -2%

Horticulture Total 673 677 1% Potatoes 91 103 14%

Citrus 50 55 9% Almonds 51 51 0%

Other horticulture 480 468 -3% Seafood Total 383 391 2%

Southern Blue Fin Tuna 128 146 14% Rock Lobster 83 87 4%

Other seafood 172 158 -8% Total Primary Production 3 736 3 791 1%

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


2.3 Finished Food reaches record level of $4.9 billion (wholesale values)

South Australia’s Finished Food includes post-harvest value-adding, such as in packing, cleaning, cold-chain management and food manufacturing. Finished Food value shows steady growth, up $45 million (1%), to reach a record $4.9 billion. Most industries experienced gains apart from a decline of around 25% in dairy processing due to lower volumes of milk being processed.

Figure 2: Value of Finished Foods, South Australia, 2001-02 to 2012-13, $ million

2.4 South Australian Food Exports (overseas) down by 13% to $3.2 billion (FOB4)

During 2012-13, overseas food exports dropped by 13% to $3.2 billion following the significant growth experienced during 2011-12. The $486 million decline was due to lower volumes of grain available, and therefore lower grain exports and a somewhat smaller decrease across all industries except horticulture which experienced a $20 million (or 17%) increase.

Horticulture exports increase of 17% was due mainly to the 32% increase in almonds and 13% increase in the value of citrus. The largest decline of $423 million (or 18%) was in grains although meat ($86 million or 11%) and dairy ($34 million or 82%) performed badly. Reasons for the drop off include:

• Continued high value of the Australian currency, although declining towards the end of reporting period.

• Low stocks of grain on hand at the beginning of the reporting period, coupled with significantly lower crop production.

• Significant reduction of the number of live sheep exported from over 500 000 in 2011-12 to 132 000 in 2012-13.

• Continued decline in global demand for sheep and lamb meat after several years of extreme growth. Sheep and lamb meat exports declined by $115 million from over $500 million the previous year.

4 FOB value – Free on Board value of a commodity or product is valued at the price received as the commodity or product leaves the country. This includes all the margins and costs that occur between the farm gate and the wharf or airport.


• The extreme drop off of dairy product exports from $42 million to $8 million. This reflects change in ownership of major dairy processing facilities in the Murraylands with the focus changing more to the domestic market.

Overseas Food Exports contribute to the South Australia’s Strategic Plan Target 37 to increase the value of South Australia’s export income to $25 billion by 2020. Currently South Australian Food Exports comprise 30% of South Australia’s merchandise trade, down from 36% last year. Total agribusiness exports (including food, wine and wool) totalled $4.75 billion contributing 44% to total merchandise exports in 2012-13.

Figure 3 shows trends in food exports for both commodities and finished foods over the past decade. These trends underscore the variability of South Australia’s commodity trade, which is highly seasonally dependent, compared to the more stable levels recorded of finished food exports.

Figure 3: South Australia’s food exports (overseas): Commodity and Finished Foods, 2001-02 to 2012-13, $million (FOB)

Figure 3 shows a decline in commodity trade (down $485 million or 21%) and a small decrease in Finished Food exports down by $1 million (or 0.1%) over the year.


Table 3: Overseas exports of South Australia’s food, Growth in Selected Commodities and Finished Foods, 2000-01 to 2012-13

Value ($ m) Average Annual % Change

2012-13 2011-12 to

2012-13 2001-02 to

2012-13 Grains 1 850 -19% 1%

Livestock 31 -67% -10% Total Commodity Exports 1 880 -21% 1%

Grain Products 128 1% 2% Fruit & Vegetables 139 17% 2%

Seafood 266 -2% -5% Meat 695 -3% 4%

Dairy Products 8 -82% -15% Other 71 152% 3%

Total Finished Food Exports 1 307 0% 0% Total Food Exports 3 187 -13% 1%

Table 3 provides greater detail on the growth in overseas exports, outlining contributions by key products, defined by either their commodity or finished food status.

Figure 4 shows the leading destinations of food exports from South Australia over 2012-13. South Australia exported food to 115 countries up from 114 countries in 2011-12. Japan and Indonesia remain key food export destinations for South Australian and combined, make up 23% of total South Australian food export values.

Figure 4: Leading destination for South Australia’s food exports, 2012-13

China continues to emerge as a key export market, increasing its share from 4% of South Australia’s food exports in 2011-12 to 8% in 2012-13 and becoming the third largest market with the United States of America moving back to fourth. The growth of South Australian food exports to China has been dominated by grains and meat in recent years. South Australian food exports represent around 10% of Australian food exports to China.


2.5 Retail and Hospitality sales reach $9.3 billion

Figure 5 below shows the ongoing growth in 2012-13 of the food retail and hospitality sectors. Sales increased by 7% or $579 million to reach a total of $9.3 billion the highest level recorded since the scorecard commenced measuring these values. It can be assumed that an increase in the purchase of more prepared foods is a big contributor to the ever increasing value of food consumption in South Australia.

Figure 5: South Australia’s Food Retail and Food Service sales 2001-02 to 2012-13, $ million


2.6 Food Employment

Figure 6 below, shows annual total food sector employment since 2001-02. Each of the components of the food value-chain (agriculture/primary production, food manufacturing, food wholesale and retail and food services) is shown in the graph below.

Figure 6: South Australian Agrifood employment, 2001-02 to 2012-13 year to May, ‘000 persons

Figure 6 shows that food industry employment has increased steadily (at 1% pa or a total 11,000 jobs) over the last 10 years, although a decline of 100 (down 0.1%) to 143 600 was recorded in the year to May 2013. Over the year, primary production had the biggest decline by 8 100 or 21%, following a significant increase in this category last year.

Employment gains were recorded in Food Manufacturing and Wholesale/Retail categories, which increased 2 400 or 10% and 9 600 or 27% respectively. The South Australian food industry and their value-chains, represent almost one in five or 17.3%, of the State’s employed workforce, with this share having remained reasonably steady over the last decade.

These results should be used with caution, as the data is taken from the Australian Bureau of Statistics (ABS) quarterly Labour Force Survey where fluctuations can occur due to the sample variation and size.


3. SUMMARY AND OUTLOOK

The South Australian Gross Food Revenue continues to grow although dipping slightly below the required trend rate to reach SASP $20 billion target by 2020.

Food overseas exports declined by $485 million, following exceptional growth in 2011-12, which was boosted significantly from the extra grain stocks on hand from previous year’s harvest. Finished food exports, however, showed no change from the previous year.

Food retail sales continue to strengthen despite only a slight increase in the Consumer Price Index for food and a general slowdown in the economy and the retail sector.

Agrifood employment remained relatively steady during 2012-13, totalling 143 600 persons employed along the food and wine value chain. This equates to 17.3% of the South Australian workforce employed in this sector.

The outlook for the 2013-14 Scorecard looks extremely promising with a forecast of a near record grain harvest, which more than likely will lead to significantly higher volumes available for export and therefore higher export revenue. This anticipated result should put the South Australian Gross Food Revenue well on track to meet the 2020 food target articulated in South Australia’s Strategic Plan.

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