2008 NTCA Yearbook - Northern Territory Cattlemen's Association

Northern Territory Cattlemen’s Association IncorporatedAdvancing and Protecting the Interests of Cattle Producers in the Northern TerritoryAustralian Agriculture and Global EconomyNTCA Annual Conference 2008Half the world is having an industrial revolution.The resultant leap in demand for industrialcommodities has pushed up their price notably.Rural commodity prices lagged behind their industrial cousin.But 2007 changed that story, with food prices lifting notably inresponse to rising prosperity in developing nations as well astroubled seasons among several of the world’s big food suppliers.Yet although supply has clearly been part of the story, demandseems to have been a bigger player, and chances are that globalfood prices are now structurally higher – with the OECD’s foodprice index already at 20 year highs.The intake of protein rises alongside income. Protein is auseful measure as it captures both the increase in the amountof food consumed (which has the greatest impact at the lowerend of the scale) but also the tendency for more food of higherquality to be consumed (which gradually becomes the mainfactor in rising protein intakes).The greatest increase in food demand occurs at the lowest levelsof income, particular between US$2,000 and $5,000 per head.A number of factors suggest that the effect shown here will becritical to boosting demand and perhaps prices for local farmers:• First, some of the largest economies in the world are currentlyin the range where increases have the greatest impact onprotein consumption. Income levels for three of the four mostpopulous countries in the world are entering the range inwhich their food demand is growing and changing fast.These countries (representing more than 2.8 billion people)still have relatively low income levels – hence rising averageincome levels there will demand a much greater increase infood production.• Second, the increase in protein demand often reflects a movetowards consumption of meat, which is one area in whichAustralian exporters will be well positioned to supply theincreasing consumption demands.The result over the medium to long term will hopefully besustained growth in demand for these farm products – a trendthat will not only see continued growth in our exports, but alsohelp keep prices buoyant, meaning that global prosperity lookslike providing a strong backbone for the local farm sector.Chris RichardsonDirector, Access EconomicsChris Richardson, Director, Access EconomicsChris worked at the Federal Treasury prior to joining AccessEconomics in 1988.He has also worked at the IMF, advising countries in theformer Soviet Union and South America.Chris writes the BRW’s Fundamentals column. He is one ofAustralia’s best known economists.Chris heads Access Economics’ forecasting and modelling unitand is the author of Business Outlook, widely acknowledged asthe leader in its field of macroeconomic forecasting. His expertiseincludes the Australian and global economies, the Federal Budget,ageing and industry trends.Chris writes the Business Review Weekly’s Fundamentalscolumn. His comments on trends in the economy and theireffect on business regularly appear in daily media coverage. Hisviews are widely quoted – for example, he was named in the onlydebate between the PM and the Opposition leader in the 2001Federal election.Chris has provided tailored economic advice to the corporatesector for many years, assisting in thebusiness planning for numerous privateand public organisations. His guest speakerappearances vary from conferences for oneof Australia’s leading banking institutions,to discussions with the Board of Directorsfor a major construction company.Chris can tailor a presentation to suitorganisations in all industries.Northern Territory Cattlemen’s Association Year in review 2007-2008 23