The Experts

Brendan White
+ About Brendan White

Brendan White is group executive, business banking, agribusiness and financial markets and since he joined the bank in April 2012 has been diversifying BOQ’s balance sheet both by industry and geography which included developing its business banking and agribusiness capabilities.

A turnaround story for agribusiness

Thursday, January 29, 2015

By Brendan White

What are some of the major concerns in agribusiness at the moment?

Agribusiness is one of those sectors that often faces challenges – whether they are weather-related; linked to macroeconomic factors such as the value of the Australian dollar, the performance of our economy or our trading partners’ economies; or related to policy decisions such as the live export ban.

What we also know about the sector, however, is that it’s extremely resilient and agribusiness owners are, more often than not, highly skilled at managing through the ups and downs of each cycle.   

I think it’s important that financiers recognise the inherent resourcefulness, resilience and character of their agribusiness customers and, wherever possible, take a longer term view by providing support through challenging periods as well as the good times.

I’m still positive about the long-term outlook for the sector.

How is the sector adapting to changes in technology?

Technology is pivotal to driving efficiency and productivity and, ultimately, profitability, within all agribusiness sectors and farmers are as good as any business people I’ve ever met in their ability to adapt to technological change.

It’s really important though, that Australia is at the forefront of new technologies to ensure we remain competitive globally.  

We have to keep investing in infrastructure and, importantly, research and development in cropping practices, in genetics through the cattle industry and in areas such as water efficiency and drought resistance technologies.

What are some of the investment trends in the sector?

We are seeing a lot more institutional investment in agriculture, accompanied by heightened interest in supply chains. Given our proximity to Asia, it’s not surprising there is also international interest in the sector, including from China.

Is there potential for Australia to become a food bowl for the region?

Australia is internationally recognised as being ‘clean and green’ in terms of our ability to provide high-quality, safe and clean produce but we have faced some recent challenges – economic, as well as weather related – in terms of being a supplier to the region.

One of these has been the strength of the Australian dollar over the last few years, which has impacted international investment.  

If the value of our dollar can maintained at current levels, or lower, we’re likely to see more offshore investment, which will provide a new injection of capital into the sector that can be used to build infrastructure.

This infrastructure plus improved weather conditions – and the rain does always arrive eventually – will greatly enhance our ability to compete internationally.

What other trends are emerging in the farming sector?

Some of the most interesting new trends are coming from farmers exploring ways to increase their productivity.

Investment across the entire supply chain is creating interest both domestically and internationally while business models involving leasing are becoming more prevalent as opposed to outright acquisition.  

One of the great strengths of Australian agribusiness is its ability to compete across almost every industry segment. As a result, we are seeing a lot more diversity in farming, including more mixed farming. This also allows farmers to mitigate the risks associated with a single income stream.

Heightened global demand for protein and the rising middle class in Asia are providing other opportunities for Australian agribusinesses.