Agribusiness - Key Lessons

With strong agricultural outputs returning, improving weather and the emergence of industry restructuring, Australian Agri-Businesses are looking to a period of change and renewal. Whilst short term fundamentals are good, industry structural challenges remain and players will need to manage a range of issues, including:

Managing pricing and output demand in an uncertain global environment

Across the commodity landscape, producers are seeing strong production and in some cases higher commodity prices. Many industries are grappling with how to manage long term pricing and the transition from pool based to more flexible alternatives demanded by participants.

Increasing focus on climate change and the opportunities this may present

Climate change, water usage and trading issues will impact the Agricultural industry for the foreseeable future. While Agriculture is a key emissions contributor, the opportunities to add to emission reduction through planting, forestation, and novel technologies (e.g. bio-char) means that climate change need not be considered solely a downside risk.

Managing input pricing and volatility, particularly for the fertilizer market

Fertilizer pricing has attracted broad media coverage and a Senate enquiry in the past two years as farmers and retailers reacted to a peak in input pricing. While the peaks have passed, opportunity remains for players with pricing and risk management capabilities that enable end users and retailers to manage the risk of input costs.

Participating in the changing industry landscape as consolidation plays out

The entry of Viterra through acquisition of ABB, and the recent acquisition of United Malt Holdings by GrainCorp are high profile examples of consolidation playing out in the Agricultural industry. This consolidation will continue as incumbents seek scale and new entrants seek to build a strong industry position.

Pacific Strategy Experience

Pacific Strategy Partners has worked with many Agri-Business companies and has deep understanding of the value chain from farm to finished product. Our work has addressed many of the fundamental challenges facing the community, for example:

Consumer Needs

Across a number of commodities, assisting client’s understand the need for simple, clear customer communication to ensure price and risk management tools are understood and well adopted by both farmers and end users.

Managing Input Costs

We have developed strategies and techniques to enable processing clients to manage the costs of agricultural commodities and ensure long term profitability is not at risk from the price cycle.

Value-Adding Opportunities

We have assisted clients to identify and develop value adding opportunities in both agricultural inputs and beyond the farm gate. We have assessed new product and market entry opportunities, run new product development programs and helped understand how alternative distribution arrangements can leverage the strength of global businesses in the local environment.

Strategy and Performance Improvement

Working with rural retailers and wholesale / distribution businesses to improve business performance and develop long term strategy to maximise earnings. Our work in performance improvement has been applied in the Agri-Business space with direct impact and measurable improvement in business performance.

Acquisition Support

We have reviewed industry attraction and the acquisition landscape for our Agri-Business clients together with providing transaction support for a number of acquisition opportunities

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