FUTURIST Paul Higgins reckons Australia’s lamb producers should prepare themselves should lamb production ever exceed demand.
“The story that (lamb) demand will continue to outstrip supply in the next 20 years is certainly a plausible one.
“We have a lot more people, they are getting richer and when people get richer the history is they eat more animal protein,” he said.
“You can paint a picture that says ‘we are not making any more land, we are not making any more water and so therefore things can be pretty good’.
“I say that quite often to farmers at conferences and ask people to put up their hands if they believe that therefore they will be all be multi-billionaires at the end of the decade…and the response is generally pretty negative.”
Mr Higgins believes the under-supply scenario is plausible and there are people in the investment and private equity community investing in agriculture for that reason.
“My point is it may happen or it may not happen, or history, which is usually the best guide, means it will continue to be an issue of poor terms of trade and ‘a tough business to be in’.
“But if you do things which improve customer value and you do stuff which reduces your cost of production you are better off in both scenarios,” he said.
“So if all lamb farmers are multi-billionaires in 2030 the fact that they invested some of that money back into improving their overall business will make them even better off.
If things are tough and they don’t invest in their business while things are good then they will end up being screwed, which is my basic message,” he said.
“I don’t believe in predictions and stuff.”
Higgins will explore lamb’s future at Lambex 2016
Mr Higgins is the first keynote speaker to be announced for the Lambex 2016 conference in Albury, New South Wales, in August.
He has worked across many facets of the livestock supply chain as a cattle veterinarian, pork farmer, abattoir manager and agribusiness consultant. He recently retired from a 16-year stint as a board member of Auspork, a public company that markets pork, beef, chicken and lamb, and has served as chair of Australian Pork Limited twice for a total of 10 years.
Now as the principal of his private consulting firm Emergent Futures, Mr Higgins will explore the lamb industry’s realistic future, and its consumer, technology trends and producer trends to put a compelling case for what the industry will look like in 20 years’ time.
Mr Higgins said the high-margin customer of the future – the ones lamb producers want – are going to be more discerning and more demanding,
“Everyone’s lives are becoming more like that in that they want more information about the different aspects of their lives, which extends to food.
“Secondly, the strategic lever to be able to provide that information is in part going to be about data from throughout the supply chain,” he said.
“Thirdly, by having a customer focus approach, lamb producers will improve their capacity to run their business while reducing costs at the same time.
“The capacity to link up with research organisations and other types of farming systems means producers can reduce costs as well as serving their customers better.”
Lamb in a good place, but cycles come and go
Mr Higgins said to a certain extent the lamb industry is in a good space at the moment, with volumes down and demand high, but sometimes it is forgotten that these cycles come and go.
“There could be some parallels between lamb production and Saudi Arabian oil production — at some stage that demand is going to run out and it is important to prepare for how we might handle it when it does.”
Mr Higgins also said if farmers don’t get hold of that “next layer of data and the value development that is going to come with it”, by controlling it and building services for themselves, someone else will.
“Then someone else will make the money.”
LambEx 2016 planning committee chair Rodney Watt said Mr Higgin’s presentation will give a valuable insight into the future for all lamb industry stakeholders.
“I’ve always been someone who’s excited about the future and I see change as something that should be welcomed and not feared.
“I’m excited to find out what Paul thinks of the future of the lamb industry so we can take that message forward with a view for change,” Mr Watt said.
LambEx 2016 will take place in Albury, NSW, from August 10-12. For more information visit www.lambex.com.au