Farm exports are growing in value by a respectable 5.2 per cent annually as Australian suppliers rush to sell a wider choice of food products to a raft of fast developing economies.
But our trade rivals are generally doing an even better job of expanding their market share - invariably in our export backyard.
The agricultural commodity export rush has also rapidly depleted our sheep and cattle numbers in recent years which means Australia will most likely be letting future market growth opportunities slip by, in the short term at least, as restocking becomes a priority, says the Australian Farm Institute (AFI).
The AFI’s latest agricultural trade performance review highlights how our farm sector continues to lose market share in global markets, particularly among booming Asian food industry importers.
Average compound growth in agricultural trade worldwide has been about 7pc in the past seven years - about 2pc more than the pace of growth in Australian farm exports.
While still mostly holding our own in North Asia (Japan, China and Korea) and the sparsely populated Pacific-Oceania region, we are seriously underperforming as a source of agri-food supplies to some of the fastest growing markets including the South East Asia, Central Asia, Africa and the Middle East.
In the six years to 2014 the value of farm imports by nations in these regions grew almost 15pc annually.
That’s about twice the rate of our overall ag export growth effort.
Importantly, these tended to be neighbouring markets which we “widely identify as our own” but which now sourced more from other exporters, said AFI executive director Mick Keogh.
Countries such as India, Brazil, Argentina, Chile and Ukraine now rated as new key competitors on the beef, grain and horticulture fronts in Asia.
So, too, were persistent rivals such as big grain and beef producer Canada, which has emerged lately as a significant seller to the Indian pulse market.
Mr Keogh said AFI’s findings were a wake up call to governments and the farm sector about “not assuming these markets are ours and there for our taking".
Farm exporters must be alert to “any complacency about the ability of our farm sector to automatically benefit from growth in global demand for world populations increase and diets change".
Australia was struggling to be cost competitive, particularly against emerging agricultural exporting nations in Eastern Europe, Asia and South America.
However, the review noted the major reason our farm sector had lost market share was limited land and water availability, which restricted intensive farming opportunities and export growth.
This in turn highlighted the need for an expansion of farming and infrastructure investment in northern Australia.
“Two main avenues available to increase export volume are a lift in agricultural productivity and expanding agriculture in northern Australia,” Mr Keogh said.
He said governments and the agricultural sector should redouble efforts to pursue both objectives to boost the long-term wealth the sector generated for the Australian economy.
Rainfall and seasonal conditions were a constant factor in Australia’s ability to meet overseas market demand, said report co-author and AFI project officer, Mark Henry.
Despite growing global opportunities, farm exports were set to shrink in coming years in response to a big turnoff of livestock to processors during recent drought in eastern Australia.
Grain export opportunities had already been hurt by the tough seasons.
“There’s going to be a relatively big period of flock and herd rebuilding which will restrict exports for a while, but in the long term it’s not a dire problem,” Mr Henry said.
A continued fall in dairy output in response to dry weather and low international prices impacting on farm profitability would also erode Australia’s export capacity in that sector.
Mr Keogh said the trade performance review emphasised a need for more focus on increasing the value of agricultural exports, as well as volume.
“Increased value can be generated by focusing on quality, biosecurity and safety, with Australia already having world-leading systems in place to address these requirements.”