The technology is there, but we need the infrastructure to deliver

Australian Farm Institute executive director and a panelist at the Yass forum, Richard Heath, says this is a fascinating space.

“There is absolutely so much opportunity happening now,” he said.

However, the infrastructure to connect our population and provide access points to markets just weren’t being created.

“The Belt Road Initiative with China and the transport infrastructure investments being made through that is basically going to have 40 per cent of the world’s population connected through roads, railways, maritime routes – we’re not doing it.

“We’re falling behind in our infrastructure in terms of providing those access points to supply that massive population.”

Founder of branded beef product KC Natural, Sam Burton-Taylor, experienced this when he left a Sydney finance job in 2014 to kick off his branded beef venture, KC Natural, based from Boorowa.

He purchased a butcher shop and within about four years began exporting beef, and later lamb.

“That was an opportunity that wasn’t as easy 10 years ago as it is now,” he said.

However, the business has been a success, and now has offices in Shanghai, Sydney, and Boorowa.

“It’s not logical in a lot of ways, but it has worked and that’s because we can get a plane out of Canberra, or a plane out of Sydney.”

“We can have lambs leave our farm on Thursday morning, they’ll be killed on a Friday. They’ll be on a plane on Saturday and in a supermarket in Saudi Arabia on Sunday.”

This ability to grow his exports has come from the gradual improvements to market access, which is not just through roads and rail, “but free trade agreements that our governments have been working on, and is only going to grow in the next few years”.

Yet, it has been a struggle. 

“We are limited in may ways by processing facilities, which many of you as farmers would be aware of. That’s a huge challenge for us,” Mr Burton-Taylor says.

“We’ve had to truck our cattle 1000 kilometres north to Casino to get a kill that has market access into China.

“We have to send our lambs to Victoria – to Melbourne – and that’s 1000km, so for us, that’s a really big area we need to improve in a regional sense.”

Some improvements had begun, including Hilltop Meats, at Young, doing a huge upgrade in the past four to five years.

“It hasn’t been fast, but they’ve done it and they’ve got some market access there and we’re processing cattle there.

“And Gundagai (Meat Processors) has done a $35 million upgrade over the past two years. They’ve just got US access. They’ve been primarily a Coles-based processor for many years.”

Coles, though, was among those businesses he saw as having dominated the industry in a way that had been counterproductive to developing diversity.

“And that’s Australian processing, we’re dominated by oligopolies, we’ve got Teys and JBS, and then on the retail front we’ve been dominated traditionally by Coles and Woolworths and so to be a meat processor … you had to be really small or really big,” he said.

“So for us, regionally, we’re going to be much better off with more diversification in terms of Hilltop enabling little guys like us being able to do a service kill, (likewise) Gundagai also doing a service kill.

“When we started out... the only way we could get beef overseas was through Casino and that was hard.

“It was a time when the market was booming and even to get some kill space and product into China was very challenging.

“There’s no how-to guide… the challenging thing about processing is you’re risking a lot of money. You’ve got to get to a certain volume to get consolidation of loads to get your volume up to a point where it’s interesting for customers.”

Yet, beyond just beef, as the technology improved, the available platforms were making exports more attractive.

Mr Heath said technology was enabling access to overseas markets with very small amounts of product, which was growing new opportunity for smaller, or niche farms.

An example was Australian platform James Tyler, which used micro apps like  WiChat and ToaBoa.

The company was marketing almost individual cherries and small quantities of milk and apples one at a time to Chinese consumers that are buying these things like it’s a shopping channel.

“So, the technology is enabling this direct link between this massive percentage of the world’s population and every farm, if you want to. Any farm just about, these days, could now be an exporter if they access these platforms and start working out how they can do it,” Mr Heath says.

“But we’ve got to get our side of it right – the freight links, the air freight hub and the processing plants so we can make the best out of it.”