World population is projected to reach 9.8 billion in 2050*, which will continue the dramatic rise in demand for food and fibre currently being experienced. With this population growth comes a rapid expansion of the global middle class, currently 3.2 billion and expanding by 160 million a year#. The recent growth of the middle class has centred on Asia, with this region to provide 88% of the next billion entrants into the middle-class ^.
There will be 220,000 more people at the dinner table tonight than there was last night.
An increase in a middle-class population will not guarantee a rise in demand for all agricultural bulk commodities. The world’s middle-class demand higher value protein, with China projected to decrease consumption of vegetables while consumptions of beef triple out to 2050^.
Australia is well positioned to take advantage of these megatrends and for investors in Australian agriculture, the key is to identify how you can maximise this opportunity. A major opportunity is to be a premium supplier of high-quality product and leverage our competitive advantage. As a nation, we are unable to be the low-cost supplier and therefore need to focus on our value proposition and product differentiation.
Recent population growth has centred on Asia. There are more people living inside this circle than outside of it.
The Asian region is set to provide 88% of the next billion entrants into the middle class.
The world’s middle class demand higher value protein, with China projected to decrease consumption of vegetables while consumption of beef triples. This will ensure more produce from fixed resources (land and water).
Private equity participation in Ag is growing. One success story close to home in Australia is the Costa group listing in 2015 which now trades at 25*earnings.
Some key areas private equity focus on are:
Read more…Foreign investment in Australian agriculture.