March 2, 2018

Editor’s note: The below is sponsored content.

By Troy Setter, CEO of Consolidated Pastoral Company

Food demand is one of the biggest global growth themes of this decade and could be a defining theme of this century. The world needs to produce 20 percent more food by 2030 and a staggering 60 percent more food by 2050 to meet forecast demand. Population growth along with rising incomes in Asia and Africa are driving beef consumption to unprecedented levels. By 2030, there will be another 1.6 billion people in Asia’s ‘consuming class’ alone, presenting a huge opportunity for beef producers.

Australian beef producers have an important role to play in helping to meet these global demand dynamics. We have a natural advantage through our proximity to Asia, strong access to traditional and new markets, and favourable free trade agreements with beef consuming nations.

The industry in Australia has made some good progress, however to fully capitalise on the opportunity there is more we can do. Increasing the productivity of our land by developing it to its full potential and adopting technology to better manage cattle and costs is key to a successful and vibrant industry.

Over the years Consolidated Pastoral Company (CPC) has established a diversified portfolio of 16 high quality stations across Northern Australia, as well as two feedlots in Indonesia, through strategic acquisitions and divestments. Today we’re investing in our land to run more cattle, and more importantly, to run those cattle more productively.

As with much of the land in the north of Australia, there is a significant part of our portfolio that is unutilised with the potential to develop more water infrastructure and fencing to increase the carrying capacity of our properties. Between 2009 and 2017, we developed greater than 500,000 hectares of land – adding 38,000 head of cattle capacity to our portfolio – and there is a further 3.1 million hectares of land that could be developed. The return profile of this investment is compelling. Each c$1 million spent on land development equates to a c$4 million asset value uplift after five years.

In FY18 alone, we will spend $7.4 million on watering points at six of our stations and from this we expect to increase the carrying capacity by almost 18,000 head of cattle, and materially increase asset values.

Land development isn’t the only opportunity for Australian beef producers. Traditionally the industry has lagged behind other agricultural sectors when it comes to the adoption of technology and now is the time for us to start benefitting from agtech innovations.

At CPC we’re using genetics and precision agtech to better manage and improve the productivity of our herd. Genetics technology enables us to identify superior animals in our herd, and with artificial insemination and IVF we’re able to better spread these higher performing genetics through the herd, making our cattle more productive as a whole. We’re also looking to the next wave of productivity improvements as we trial and implement tech-enabled pasture management tools that assist our team to virtually fence, move, and monitor cattle remotely.

While we are already seeing the benefits from land development, genetics, and technology, as an industry we are only scratching the surface in terms of preparing ourselves to meet future demand.  

As the CEO of CPC, I am proud to be part of an industry that is making important steps to be innovative, versatile, and sustainable. I’m confident the future for the Australian beef industry is bright and the opportunities are significant for producers, our people, and investors.

# # #

Here more from Setter by attending the 2018 Global AgInvesting conference in New York City on April 23-25 where he will present a global livestock investment outlook on Wednesday, April 25.