Grain Value Chains

The grains industry sector makes a major contribution to the South Australian economy. In 2005/06, the sector made up 28% (or $2.8 billion) of the Gross State Food Revenue of $10.1 billon, making it the highest contributing sector in the South Australian food industry. In addition to the food revenue, the sector also provides an important feed (grain and fodder) input to the livestock industry worth an additional $0.6 billion valuing the food and feed grain industry sectors at $3.4 billion.

The South Australian grain industry sector is heavily dependent on world markets, with around 70% of its food grain product exported as a commodity for overseas processing in food value chains. Over the five years from 2002 to 2006, South Australia has produced on average 18% of Australia’s grain production and exported 17% of Australia’s grain commodity exports which is 6.5% of the world trade in these commodities. On average, for the same period, grain commodities contributed 15% to the total value of all exports from South Australia to overseas destinations. During this period, South Australia exported an average of 3.3 million tonnes of grain, pulse and oilseed annually, representing a FOB value of over $839 million per annum. In addition, the sector exports around $338 million of feed grains, processed stock feeds and fodder.

The grain industry is diverse covering very mature sectors such as wheat, barley and oilseeds as well as more recent additions of pulse crops like lentils. Oilseed (canola) production in South Australia has grown from 10,000 tonnes in 1991/92, peaked at 312,000 tonnes in 2003/04 to now settle (excluding drought) at 220,000 tonnes. Pulse production (especially due to growth in lentils and more recently beans) has increased from around 200,000 tonnes to 242,000 tonnes over the same period.

In the mature industry sectors (wheat, barley and oilseeds), there is a strong focus on exports of unprocessed or semi-processed commodities, with most value adding targeted to the domestic market. South Australian processed field crop product exports are worth around $96 million per annum compared to over $930 million per annum for Australia.

The Grains Industry Development unit has undertaken more detailed analysis of the grains industry. For the purposes of the research, the industry was divided into seven current or emerging value chains for food, feeds and industrial end uses:

  • Pasta and Co-Products
  • Malt and Beverage
  • Food Oils
  • Whole Grain Foods (includes Pulses)
  • Bakery, noodle and other products
  • Animal Feeds
  • Biofuels

While the major value chains are included in this list, there are some omissions including potential new value chains in innovative arenas such as nutriceutical and special industrial applications, (to be considered at a later date).