1998, Volume 1, Paper 7
ISSN: 2209-6612

Keeping up with the mega-trends

Peter Studley – Westpac Senior Analyst, Agribusiness

Summary

With commodity prices fluctuating daily and production levels changing frequently, we need to be nimble
in managing our businesses on a day to day basis. However, there are forces at work over much longer periods
of time which also have a tremendous impact. In this report we identify the top twenty four “mega-trends” and
discuss how individual businesses can position themselves to benefit from the opportunities.
Most of the trends affect everyone in the marketing chain, from input suppliers, primary producers,
processors, exporters and retailers to banks.They range from slow moving “hard to see” trends like liberalisation
of world trade right through to things which are easy to see like the use of computers on farms.We present the
facts about some of the common misconceptions in the industry such as the value of agriculture to the economy
(it is important), rural population growth (though declining in some areas,overall it is increasing almost as fast
as in the cities), farm employment (it is stable) and farm rates of return (range from very high to very low).
In our view the most influential mega-trends are:
• rapidly rising population and incomes in developing nations, are lifting demand for fruit, vegetables and
higher protein food, and have been driving our food export growth for two decades..While conditions are
presently difficult in many of the Asian economies, the long term potential is still very good.
• rising consumer expectations of quality are the underlying force behind a wide range of developments in
the marketing chain including quality assurance, vertical integration and branding;
• the cost/price squeeze is likely to moderate over the next few years, but continue to lead to fewer and
larger commercial farms at one end of the scale while lifestyle farms continue to become more popular;
• information technology is allowing businesses to seek efficiencies at a whole new level through market
information, communication with buyers, financial management and remarkably improved banking
services.
Increasingly, our ability to take advantage of these trends will determine the success of our business. For
the most part the agribusiness sector is reacting positively to these pressures and is well placed for a bright future:
Are you keeping up with the mega-trends?

Download full document here