Livestock Investment
Opportunities
Global AgInvesting Conference Singapore
24th- 25th September 2014
David Sackett
Managing Director, Growth Farms
Meat and milk are growing in
both value and market share
2050 - US$5.1 TRILLION
2007 - US$2.9 TRILLION
Other
6% Fish
7%
Vegetables
and Fruit
37%
Meals and Oils
8%
Dairy
10%
Meat
20%
Other
6%
Fish
6%
Meals and Oils
9%
Vegetables and Fruit
40%
Dairy
9%
Cereals
12%
Cereals
13%
Meat
17%
Source: ABARES, 2012
Fish meal/oil
Vegetable meal
Other food
Fish
Vegetable oils
Dairy products
Cereals
Vegetables/fruit
Meat
Billion (2007 US$)
Meat and dairy offer the biggest
opportunities…….
250
200
150
100
2050
50
2007
0
Source: ABARES
White meat dominates volume
but red meat commands a
premium
Production
Value
Cattle
21%
Cattle
33%
Pig
38%
Pig
44%
Sheep
3%
Chicken
32%
Source: FAOSTAT, 2013
Chicken
25%
Sheep
4%
Source: FAOSTAT, 2013
Key players in global red meat
exports
Sheep Meat Exporters
Beef Exporters
Other
18%
Other
24%
New Zealand
34%
United
Kingdom
12%
Brazil
22%
New Zealand
6%
United States
14%
Australia
30%
India
21%
Australia
19%
Source: FAOSTAT, 2011
Source: USDA 2013
Increasing demand from China is
under way…..
Million tonnes cwt
1.0
0.8
0.6
0.4
0.2
Net Difference
-0.6
US
EU
Mexico
Korea
Japan
Iran
Russia
Saudi Arabia
-0.4
Venezuela
-0.2
KG & China
0.0
Agriculture contributes to
greenhouse gases
Waste
3%
Forestry
17%
Energy Supply
26%
Agriculture
14%
Transport
13%
Residential &
Commercial
8%
Industry
19%
Source: IPCC, 2007
Greenhouse gas per kg of protein
Kg CO2e/Kg protein produced
300
250
200
150
100
50
0
Beef
Cattle
Small
Small
milk ruminant ruminant
meat
milk
Pork
Chicken Chicken
meat
eggs
Source: Gerber, 2013
Grain or grass to grow beef?
120%
100%
80%
Grass fed
60%
Grain fed
40%
20%
0%
Brazil
Australia
United States
Source: MLA, 2013
Must be a low cost producer
Key issues to consider
•
•
•
•
Greenhouse gas emission
Welfare
Grain or grass to produce meat?
Animal identification (electronic)
• Beef compulsory in Aust
• Sheep optional
Lamb has seen a large price
increase
Good management is essential
$45
$40
$35
$30
$25
Btm 20%
$20
Average
Top 20%
$15
$10
$5
$0
Beef
Lamb
Source: AgInsights 2013
Opportunities
• Sheep meat offers some great advantages
• Countries with competitive advantages
• Beef in Sth America, Australia
• Sheep in Aust, NZ
•
•
•
•
Premium product producers
Low – moderate correlation with grains
Aggregation of subscale farms
Buy and manage well
Introduction to
Growth Farms Australia
Specialist Managers in Australian Agriculture
Sep 2014
Growth Farms is an established agricultural asset
management company:
•
Established in 1999 with an appropriate blend of farm management, commercial, legal
and accounting experience
•
Has over $380m under management, over $200m since 2008
•
Specialises in portfolio strategy, acquisition and management of Australian broad-acre
agricultural investments
•
Works with a diverse client base including high net worth individuals, corporate and
institutional investors from Australia, Asia and Europe
•
Has recently had first close of a Fund with a UK insurance company as the seed investor
•
Has a proven track record of value acquisitions and top quartile operating returns
•
Employs highly qualified operational management who are all experienced agricultural
specialists covering a wide range of sectors
Assets under management are substantial and across
diverse agricultural sectors:
• $380m and a total area of 105,000 hectares
- 150,000 sheep
- 14,000 cattle
- 21,000 ha winter crop
-
Cropping
Irrigation
cereal, oilseed, other
- 4,000 ha summer crop
-
Cattle
cotton, sugar, other
Cropping
dryland
Sheep
Thirty farms under management, most in the higher
rainfall areas of eastern Australia:
Climate Zones
Source: Growth Farms Australia, Australian Bureau of Meteorology http://www.bom.gov.au/jsp/ncc/climate_averages/climate-classifications/index.jsp?maptype=kpngrp
Growth Farms operating yield track record
(EBITDA as % asset value)
8.0%
Total Growth Farm assets under management
Assets under management where Growth Farms advised on acquisition
6.9%
7.0%
Yield on assets (%)
6.0%
Average yield (Growth
Farms' input) - 5.8%
7.4%
6.6%
5.8%
5.7%
5.2%
5.0%
Average yield (all assets
under management) 4.8%
4.2%
4.0%
3.6%
3.2%
3.0%
3.0%
2.0%
1.0%
0.0%
2009
2010
2011
2012
2013
For further information:
• David Sackett
Managing Director
+61 (0) 419 164 273
dsackett@growthfarms.com.au
• www.growthfarms.com.au