“We are seeing producers move downstream and others are contemplating it,” Cordingley said.
3. Implications for large-scale producers
According to Cordingley, large-scale producers are well-placed to harness the opportunities as they are able to work with banks on long-term plans and structured pricing solutions, compete on risk management and invest in offshore prospects. However, these large-scale farmers also need to have a view beyond the farm gate out into the marketplace.
“If I’m a farmer, should I double down here or invest somewhere else? Where in the world do I want to do dairying?” Cordingley questioned the audience. “The growth here is in the developing world. In the end, trade is not the solution. It’s not the full solution. Local production will be the longer-term solution.”
While growth is important for sustainable business development, growth won’t necessarily be in Australia or the Midwestern United States, but will be in developing economies.
“The question is how do you bring your know-how, skills, and technology to take advantage of that in a way that doesn’t blow up the farm, metaphorically speaking?” Cordingley said. “It’s difficult, but it’s an opportunity and it’s there.”