AGIC attracts nearly 900 delegates

by Chris Gillies
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The annual Australian Grains Conference in Melbourne included a trade show.
To view more photos of the event, click here.
Photos courtesy of AGIC.
Nearly 900 delegates and 100 international guests gathered Aug. 2-3 in Melbourne for the annual Australian Grains Industry Conference (AGIC) and listened to presentations on familiar topics such as the industry’s outlook, supply chain efficiency, and capturing Asian market opportunities.

New to the agenda this year was a discussion on big data and emerging technology to create more efficiency and understanding of consumer demands.

A panel of grain industry chief executive officers, which included Tim Hart (Ridley), Brendan Bourke (Port of Melbourne) and Graham Turley (Institutional Banking ANZ), discussed technology, sustainability and globalization.

Starting off the discussion on the topic of “what’s keeping you up all night,” Hart talked about energy prices, which has been a high-profile theme in Australia in recent months as high energy prices have put pressure on manufacturing and other businesses whose operations depend on affordable energy to stay profitable.

“In general industry, one of our biggest challenges is energy pricing,” Hart said. “As a non-controllable, we’ve seen a threefold increase in pricing over the last few years.”

He also expressed concern about the dry weather in Australia that is making production challenging, particularly in Queensland, where Ridley has production plants.

Bourke discussed concerns about the supply chain and making sure infrastructure gets the best result in moving commodities to port. He also pointed to a rail access agreement that is being worked on and said they plan to align port activities to encourage more rail over road movements. Currently the port receives 35 trains per week.

“The Victorian government in the last few weeks has announced large expenditure in the upgrade of rail that is important for grain because the improvements will allow rail to be used under all conditions,” Bourke said.

He said part of this efficiency was the upgrade of rail lines that in summer prevented or restricted trains from pulling heavy grain wagons. The Port of Melbourne, he said, is looking at ways it can improve its facilities to receive more via rail, especially containerized freight.

Grain traders Angus Wettenhall, left, Allied Grain Brokerage, and Oliver Reid, ED & F Man, discuss markets at the AGIC.
Bourke commented that rail freight hadn’t grown when compared to road transport. He said the Port of Melbourne had to work with government to improve the connection between what each was doing to upgrade rail.

Turley emphasized, from a financial industry perspective, a need to address “license to operate” for the industry in respect to sustainability, as well as biosecurity and food security in the supply chain.

“Whenever you hear of a stock bioscare on-farm, that immediately reverberates (to supply),” he said. “What’s the impact on a dairy or meat factory?”

Turley also addressed changes in technology and how they can work with maintaining competitiveness.

“There are a lot of good things happening in precision farming, and how do we block-chain in supply chain,” he said, adding that it’s the smaller players who can innovate and larger organizations like ANZ can build on this innovation.

Hart said innovation at Ridley centered on gut health and how improving it increases productivity as animals digest grain more efficiently.

When asked why Australia doesn’t produce more, Bourke said in 2017 the port had exported, in a volume sense, a two- or four-fold increase, attributing it not to capacity constraint but the amount of grain available for export.

He also said there is an increase in containerized grain, especially after deregulation, that has opened up export opportunities.

Turley said Australia can’t “feed the world” and said the blockage occurs because the commodity mindset does not adequately meet consumer wants that can vary from country to country.

“People in different countries eat and use food differently,” he said.

He said the industry is learning how to manage technology, food security, provenance, supply chain and food quality technology better and is heading in the right direction to better meet and understand consumer demand.

Hart added there was room to remove barriers and improve costs in the supply chain with better use of data in supply chain planning and customer forecasting.

Taking a break during the AGIC are exporters, from left, Manish Desai, ImpexDocs; Dia Ram Sharma, Societa Cofica; Sanjiv Dubey, GrainTrend; and Jiger Kotecha, Spagricon.
Another example of improved efficiency, he said, is matching what a supplier will do with the plant. He said plants want to run 24 hours a day but suppliers will only operate 12 hours.

In terms of export markets, Hart said Australia should be a “delicatessen” because generally the country’s geography meant supply was reliable and had a solid brand and reputation for clean and green produce. However, he said the Australian brand is fragmented.

“I think we should have a national Australia brand,” he said, pointing out that, internationally, states compete rather than work together.

Turley also spoke on the issue, but said being a “delicatessen” meant the Australian grain industry needs to understand its customers in detail, and that it shouldn’t think about producing as much as it can for least cost.

He said the consumer expects more for a “delicatessen” approach and that a lot more work could be done to understand these expectations.

Speaking on globalization and the rising sentiment against open trade, the panelists were optimistic international trade will continue. Bourke said trade was positive in the first half of 2017 and didn’t see any “dark clouds” on the horizon.

Hart commented that rule changes have a larger impact on his business than the anti-globalization sentiment. He cited an example that saw Ridley report a potential AI (bird flu) contamination in its protein meal three years ago. The reporting resulted in the product being blocked from many countries, including China. It continues to be blocked there today despite the product being cleared of contamination.

He argued that despite the United States having much larger A1 outbreaks, China does not apply the same rules as those applied to Ridley because the company isn’t a major supplier.

“If China could not get access to U.S. meal, its industry would have stopped,” Hart said.

He said that unless big tariffs become more common, the inconsistent application of the rules was more of a concern for his business.

Wrapping up the discussion on globalization, Turley said that despite rhetoric from some world leaders the digital world and consumers will continue to drive trade.

Graham also outlined the global challenge of government and the G20 needing to play catch-up with developments in digital technology. Data is the critical factor in organizations and the consumer, through data, will drive global trade, he said.