Why invest in Australian agriculture?

About Australia's agriculture industry

With the world’s fastest growing population on our doorstep - Asia will need to eat! Australia is recognised for its clean, green image and high quality agricultural products, which is supported by our liberal trade relations as preferred trading partners with many countries.

Food demand for 2050 creates great opportunities for Australian agriculture. Australia is in a good position to meet some of this higher demand. Australia has comparative advantage in the production of agricultural products and its geographical location means lower transport costs in exporting to Asia and China.

With Australia’s position as an important exporter of several agricultural commodities, the projected increase in global agrifood demand and imports could lead to higher Australian agricultural exports. According to Australian Bureau of Agricultural and Resource Economics, soft commodities are set to rise over the medium term, which will see Australian agriculture remain in good stead.

Australian agriculture is cost effective and has prospered on a low subsidy base. Australia is considered one of the world’s low cost, most efficient producers of quality agricultural commodities, whose competitiveness has been enhanced by the depreciation of the Australian dollar.

When evaluating the profitability of investment in Australian agriculture, it is appropriate to draw comparisons with returns in other sectors of the Australian and global economies.

The overall investment returns from quality agricultural property in Australia have been more than comparable to those available from other major investment sectors including commercial, residential, and industrial property. Importantly too, they have demonstrated a lower level of volatility.

Whilst the property and financial sectors may have performed better than the agricultural sector over time, in recent times with increasing commodity prices, lower interest rates and a lower exchange rate, the agricultural sector is now placed in a very competitive position, and in most instances is performing better than its competitors. Continuing strong commodity prices as reflected in this report and excellent cost efficiency should see the agricultural sector continue this trend, given normal seasons.

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