Wandering in what people's thoughts are on the FTA with China and which rural towns could benefit from increased agriculture trade?
Agriculture Boom ?
- Thread starter Swearengen
- Start date
None. The Chinese will buy their own farms and have their own fly in and fly out workers as they already done with their existing rural and mining businesses.
Darwin would be a winner in my opinion. Mainly for the export of red meat in live form and dead.
The farmers wont see any benefit but the middlemen will. The processors and exporters hold all the cards so they will be the ones to follow.
Darwin, Inverell, Tamworth, Dubbo to name a few.
Inverell has one of the largest red meat processors in Australia in Bindaree Beef. They have been expanding their markets in China and plan to increase their workforce by around 300 workers over the next few years. A big boost to a town of 10,000 people.
Much rather be buying in a town with an export abattoir than in a mining town at the moment.
China can stop building but they cant stop eating.
RC
Darwin, Inverell, Tamworth, Dubbo to name a few.
Inverell has one of the largest red meat processors in Australia in Bindaree Beef. They have been expanding their markets in China and plan to increase their workforce by around 300 workers over the next few years. A big boost to a town of 10,000 people.
Much rather be buying in a town with an export abattoir than in a mining town at the moment.
China can stop building but they cant stop eating.
RC
Perhaps rural towns will benefit and perhaps they wont and everything in between. Its tough to call and predict because all we have at the moment is pen and paper. Id want to see some evidence of movement in terms of FTA dollars flowing through [ and stuff being operationalised] before taking a deeper plunge in rural towns. Even then that is risky and you might be better off investing in larger capital cities that often have HQ/coordinate operations of meat, dairy etc rather than directly in rural towns. The benefit of this is diversification- if the FTA does not come off as planned- so what...large capital cities have generally enough jobs/gdp/commerce in a variety of industries to hold their own, whereas rural towns may not. Similar to mining towns. e.g. Brisbane and perth benefited from the mining boom a fair bit in their own right, yet had enough backup to hold their own [ more Brisbane than perth] once the boom faded. It all comes down to risk-return. If you are really gung-ho then you may want to take a punt on agriculture towns. If not stick with large capital cities that have exposure to the industries the FTA targets.
Which is quite interesting given that up to 90% of Asian populations are lactose intolerant. Still, 10% of 1.4 billion is a fairly large market. AUS/NZL milk is attractive given the poisoning that Chinese milk has been attributed to.
There aren't too many purely food-producing companies on the ASX, that I am aware of. Warnambool Cheese & Butter are one of the significant ones, and they have attracted attention from the global food giants.
Possibly a sector of the stock market to have some holdings in for capitial gain.
Im more curious if this will bring the dead mining and cotton town back to life? such as moree and broken hill etc......
Could that be why Gina Rinehart has bought a dairy?? (I think there's another thread on this)
I hate to think it, but I agree with comments where the Chinese will buy the farm and produce what they need (for the bigger markets - milk and meat), rather than be a price taker
