 I asked to talk about connecting Australian beef to growing Asian demand and I'll probably have a reasonably northern focus as I see that there's a lot of capacity to develop the north of Australia to increase beef production and connect into Asia and I'll run with sort of positive and negatives of the opportunity into Asia. So we're going to use a couple of CPC examples just to give you a feel for what we've done in connecting our beef production system into Asia. So CPC is Australia's largest private beef producer. We run about 20 cattle stations across northern Australia, close to six million hectares. We've got two feed lots in Indonesia and about equal numbers of staff in Australian Indonesia and we're 95% foreign-owned by terra firma, one of UK's largest private equity funds. So in terms of what does that look like on a map, predominantly NTWA and then spread across Queensland. Our northern herd plugs into predominantly South East Asia through live export into two feed lots in Sumatra and then also we do work with a couple of exporters at times into Vietnam. Supplying live slaughter cattle into Abattoir and Darwin with AA Co. Our Queensland operations are predominantly into boxed beef either through grass finishing or thanks to drought in Queensland for the last four years finished through feed lot and that's so gives us a good spread across a variety of markets. So I suppose connecting Australian supply to demand and it's really how do we take this and turn it into this and that's our beef on shelf in China a couple years ago with a strong focus on the people that live inside that circle with there being more people inside that circle now than outside of that circle. That's where we as a company and I think many people in the red meat industry see a lot of opportunity. So I suppose if you look at step back and look at the whole herd and I've got a couple of slides that are probably going to cover off on what Trish has covered off on but I mean Australia has had a huge drop in beef herd size but our beef production has fallen quite a bit but still sitting at reasonably average levels. I think the big challenge that we're facing is if we don't get rain across much of Australia in the next four weeks the wet season is going to cut out pretty hard and we're going to see a big run of cattle onto the market which could substantially change that. So those of you that don't know the wet and dry cycle of northern Australia northern New South Wales north starts to close out about Easter time and having flown all over northern Australia in the last four days there's a lot more brown than green which is very unusual at this time of the year. So in terms of connecting northern Australia, northern Australia used to have a lot of meat processing plants. The number of ports for live export hasn't really changed but the number of plants in 2015-16 has really is certainly a lot less plants however plants with a lot more capacity plants hopefully with more efficiency and more connection to market it's exciting to see for us new plant about to be open in Broome and a new facility that's operating in Darwin but again much of northern Australia is a very long road freight distance from meat processing and a substantial road freight cost so when you're making decisions whether you go live export or into meat processing facilities in northern Australia the road freight cost and the shrink in the time has a has a huge impact on decision making. Meat processing up first actually flipped a coin on this wasn't me trying to have a shot at the meat processing industry first but just to put in perspective some of the challenges and opportunities and I'll come to come to live export in in a minute. Certainly meat processing gives a lot of optionality domestic versus export markets very much cut space marketing you can break the carcass up and send to a significant number of markets significant cost savings compared to live export on a per kilo basis on shipping container shipping of beef is is much cheaper than live cattle and certainly growing demand for for carcasses to be broken down even more with Australia in over 100 markets now for beef some of the challenges the Australian processing costs and an increase in competition for cattle if you look at Australia's meat processing costs we're more than you know we're nearly two and a half times that of the US at three times Brazil one and a half times New Zealand we're about 20 times cheaper in our two abattoirs in Indonesia in our different spec but it really plays into the equation and up to 10 so it's meant to be China up to 10 times higher than China down the bottom. Live export I suppose the advantages for live export out of northern Australia's location to market the ability to feed in country with lower priced feed so Indonesia in particular and Vietnam really focusing on feeding byproducts from grain production grain byproducts from tapioca feeding coffee byproducts bread byproducts and and that makes feeding in those countries quite efficient local labor does help with the cost however our feed lot in Indonesia and I'll show a small video in the minute in a minute is we've taken the decision to go predominantly mechanized labor I'll show you the only manual labor we've got left good growing demand the big advantage that live export has that we see is connecting fresh awful into the market the best way to transport awful fresh to the growing markets of Southeast Asia at the moment is in with side inside the animal and taking it up out of an abattoir is pretty challenging some of the challenges Australia's live exporting costs are higher than anywhere in the world exceptionally expensive the quality of ships that have to come to Australia can be twice the cost of ships that can go to South America on a per meter basis there's increasing competition for shipping and shipping space you take out the ability for cut space marketing the animal you put into that country is all you can sell in that country so if you're taking live cattle to an Asian country that puts no additional value on loin cuts compared to butt cuts you've got to be getting a lot for those butt cuts or a lot for that awful to to make it worth taking that animal up live and and I think we'll see that with China with a lot of views on live animals going to China there's going to have to be a continued maturation of the market up there to start paying more for some of the high value cuts for live cattle to head to China plus the feed challenge some of the other once you're in country it's very hard to re-export some of the big challenges that live export faces is government regulation costs inefficiency through through DAF and the red meat processing industry shut down the same challenge the Australian maritime rules and and live export rules escas is is very expensive we compete head on with local cattle ourselves in Indonesia that have no animal welfare cost applied to them and we we have 16 people ourselves as a company in market every night at every single abattoir that we supply importing country government regulation continues to be challenging even though we've got free trade agreements we are seeing some challenges in those countries so through southeast Asia I think the biggest opportunity is Australia's location China is going to have a big impact on southeast Asia whether we supply the market or not its ability to pull meat out of other countries we used to see Thailand as a net exporter of live cattle China has basically sucked up most of Thailand's cattle and Thailand is now an importer of cattle from Australia Asian beef consumption on on your left looking at per capita growth out to 2024 seeing huge growth potential in Vietnam in particular Indonesia and China moving closer to your right the volumes of beef that are required by by China and much of southeast Asia exciting I think the biggest challenge for Australian beef industry is productivity the productivity rate in northern Australian beef production is not keeping up with inflation and the opportunities for those to to master how they can how they can keep productivity moving faster than the cost of inflation and catch up the last few years I see this as a huge opportunity for northern Australian and and beef production rather than a problem if we can we can continue to focus on genetics and efficiency the opportunity to make Australia more competitive is is there and I'll touch on a couple other countries in a minute look at the growth in live export Vietnam has certainly been a very big growth market it's quite clear that the cattle are going to northern Vietnam their beef ends up in southern China but it's exciting to see the increase in demand from from southern Vietnam where the beef has been consumed in country Vietnam is a country that will take Indian buffalo and it's exciting that to see a you know developing market actually pay a price premium for quality beef it's interesting I heard this morning a comment about quality just to touch on it for a minute and I think when we look at quality for southeast Asia we really need to look through the eye of the consumer up there not through the Australian eyes in Indonesia quality for our customers is lean beef it is beef that is is is high yielding and the last thing that our customer in Indonesia our customers in Indonesia would want would be high marbled cattle they they're a lean beef market and I think when we start thinking about these markets we've got to not look through the eyes of just Australian demand just touching on Indonesia it's surprising now that with the increase in beef price which I'll show we're now seeing more pork eating in Indonesia than beef in Indonesia being the world's most populous Muslim country with pork being very hard to to procure up there unless it's in very western supermarkets the the price of beef is starting to limit consumption and they're heard being killed out about 95% of beef in Indonesia is traded through the wet market system we're seeing a growth in supermarkets at the same time as we're seeing a growth in wet wet markets they're the major supermarkets up there their share of the beef trade in Indonesia is very small predominantly driven by traffic to get to a supermarket is very difficult cost and and the structure of those with wealth often have maids and maids go to to wet markets so just a picture of the increase in price in in Indonesia for the last few years so I suppose this shows you what our business in Indonesia looks like in in a couple of minutes so at one of our sites we get the most of our trucks this is about the only manual process we've got left is chopping silage you might have seen in there some sappy bintang or the barley cattle those little red cattle that look half like deer the social responsibility and and connecting to so well connecting to the local local programs is really important for for success in in dealing in in Indonesia so hopefully this keeps going I mean one of the the only ways to to interact and have success connecting Australia to to Southeast Asia markets and particularly Indonesia for us is on-ground connection the conversations need to happen on ground you've got to be in the market and in the market regularly so just a touch on on China China's beef consumption is is expected to increase to around eight million tonnes by by 2020 to put that in perspective certainly heard stats of global beef trade being about six million tonnes so where we sit sit today so you can do all sorts of things with statistics out of out of China but to think that we're going to be close to somewhere near or more than global beef trade in their consumption they're going to have a huge impact our experience in China was taking whole carcasses can quarter carcasses and eight cut carcass beef up to China frozen cutting frozen and then and repacking a lot of people have had had to go at it is not certainly not as simple as it sounds really strong link with customers people were really keen on the safety story they they really liked the fact that you could show video of you know the cattle in Australia back to to the farm getting paid for it was was a big challenge after a while I think as we develop into into new markets and particularly China our competitive advantage at the moment is certainly our clean green image it's certainly our trust and safety image but if that's all we've got we're not going to last other countries are going to work out how to get safe brazils now down to two states with with foot and mouth disease you know remember five six years ago people laughing about the possibility of brazil getting foot and mouth disease free and don't don't laugh they're getting there brazil's production continues to increase I think the big thing on their live export front is 80 of their live exports currently go to venezuela in 2014 venezuela is turning into a basket case those cattle will go somewhere and the potential for them to to hit north africa or even vietnam is is quite real I think we shouldn't underestimate the ability of columbia to send cattle into southeast asia anytime soon the other thing that we're seeing is is brazil really start to put large numbers of cattle through feedlots and and increase their efficiency and bring their their carcass weights up and their speed of turn off back the the days of of them taking years to finish their cattle I think are over the other thing that brazil's got a real competitive advantage on at the moment is is the price of their cattle due to currency india is something that we certainly shouldn't take take for granted the domestic consumption and export figures for for india are huge with the the bull population that's coming off their indian buffalo milk production system is growing very very rapidly they're they're targeting markets that we have have had strong positions in or other western exporting markets have at the moment they're still in in countries that have got foot and mouth disease the pressure they're putting on traditional markets and their ability to get into new markets is something that's that's quite solid so I suppose on the on the upside though looking looking forward we certainly see the OECD countries price of beef in real terms is probably going to flatten or or sit even lower over the next the next few years but if we look forward to to the southeast asian markets their ability to pay more money for for beef and the increasing demand is really positive and it's something that i'm pretty pretty excited about thank you