‘Value-added’ food a multibillion dollar opportunity as raw prices spike

Heavyweights from Australia’s food and agriculture sectors are urging Australia to avoid being over-reliant on exporting raw agricultural commodities by investing more in local food production, like plant-based food, to create new profit streams.

Australia produces enough food to feed four times the size of our population. About 70 per cent of it is exported as commodities, with beef, wheat and other meats together comprising 40 per cent of total agricultural exports. The total value of agricultural production is expected to hit a record high of $81 billion in 2021-22.

But prominent voices from the food and agribusiness industries are urging closer collaboration to convert these raw materials into ‘value-added’ food products in what Elders chief executive Mark Allison says could be a $300 billion opportunity.

Industry giants have called for the food and agriculture industries to work more closely together to create value-added products.Credit: The Age

“The opportunity to add significant value domestically, to both supply the domestic market and also to export value-added food rather than commodities, is quite high,” Allison says.

“There’s $300 billion in opportunity for growth.”

Mirjana Prica, the managing director of Food Innovation Australia (FIAL), said “smiles” about commodity prices were “short-lived”. Grain prices have skyrocketed as Russia’s war on Ukraine constricts global wheat supply. However, Prica pointed out export goods like grains or meat are easily substituted by the same product from another country.

“When you differentiate and put special features onto your product, that’s not easily substitutable and therefore you can command a premium for that, a slight margin,” she said. “And that margin is what we need to capture more of in Australia.”

Elders chief executive Mark Allison.Credit:

The closer the raw material is to the facilities where it is processed and manufactured, the better, according to Allison, who is also the president of the Agribusiness Association of Australia.

“It means you have the reduced supply chain costs in getting raw material to the processing facility and … in getting into overseas markets.”

Some examples of enhancing the value proposition could be in identifying some grain types that can be sold to a dealer to be turned into alcohol, or partnerships like the one between SunRice and Charles Sturt University that differentiates between certain features in rice that are desirable to other markets, Prica said.

Protein has been one of the key areas that have been identified as ripe for growth on this front. The CSIRO’s recently published National Protein Roadmap stated agriculture and food technology solutions could add $13 billion in the protein market alone.

The world will need to produce 70 per cent more food by 2050 to meet the demands of a growing population. New, sustainable sources of protein are needed, and COVID-triggered supply chain disruptions have also highlighted the importance of onshore processing facilities.

CSIRO Future Protein Mission lead Michelle Colgrave, believes Australia is in a prime position to lead the world in new forms of protein production. “What slows us down sometimes is when we’re not working together, we’re not having those conversations.

“We have to take a ‘Team Australia’ approach to this.”

Red meat by-products and co-products or lesser cuts of meat not commonly consumed in Australia could find new markets in Asia and the Middle East, for instance, or be turned into supplements, Colgrave said. Meanwhile, protein powder can be made from insects, while plant-based products are growing in popularity on supermarket shelves and in restaurants.

GrainCorp chief executive Robert Spurway. Credit: Janie Barrett

GrainCorp chief Robert Spurway pointed to the company’s partnership with the CSIRO and plant-based meat company v2food as an example of bringing together all parts of the supply chain.

“There are opportunities to further process food before we export it,” he said.

“We are very fortunate in this country, we produce much more food than we consume. And by innovating that allows us to find ways to add as much value as possible to that food before we export it to the world.”

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