Industry Analysis & Industry Trends
The Grain Growing industry is highly export-oriented and includes crops such as wheat, barley, sorghum and other grains. The industry has sustained high levels of volatility over the past five years, largely influenced by adverse weather conditions that have dictated local supply. Revenue volatility has been further exacerbated by fluctuations in global grain prices and global crop supply over the past five years. Industry revenue is forecast to expand by an annualised 1.7% over the five years through 2013-14, to reach $12.8 billion. Favourable weather and planting conditions are projected to support production output in 2013-14, with revenue forecast to rise by 5.1%.
The industry tends to follow a cyclical pattern, whereby sudden production declines cause prices to spike... purchase to read more
Industry Report - Industry Investment Chapter
The industry has a high level of capital intensity. For every dollar absorbed by capital costs, an estimated $1.76 is allocated to wages. Wages is used as a proxy for labour, while depreciation is used as a proxy for capital. Capital intensity in the industry, and in the Agriculture subdivision, has been rising as more advanced equipment is used to monitor planted areas, test the soil, and irrigate and harvest crops. These systems have played important roles in increasing farm productivity and reducing operating costs. Examples of capital equipment include tractors and irrigation systems that enable farms to use less labour and ensure a more consistent crop.
The industry's capital requirements are particularly high given the large areas that grain farms cultivate... purchase to read more