LAUNCESTON, AUSTRALIA – One of the themes in Australia as the resource boom comes to an end is that the country will be able to compensate by boosting its agricultural sector, the so-called “mining to dining” maneuver.
An Internet search of the terms Australia and “mining to dining” reveals almost 4,000 items, many focused on the view that China, the top buyer of Australia’s resources, will not only continue to suck up the country’s iron ore and coal, but also all the farm goods it can produce.
This idea became all the more prevalent as the prices of iron ore and coal, Australia’s major exports, started to plunge in 2011, shattering the unrealistic hopes of politicians and voters of an endless commodity boom that would deliver a tax revenue bonanza.
The gloom was reinforced by the downgrading of expectations of the next big hope, liquefied natural gas (LNG), where prices dropped by more than 70 percent in the past 2 1/2 years just as Australia was completing eight new export plants of the super-chilled fuel.
Enter agricultural produce and China’s seemingly endless appetite for quality beef, dairy, wine and fish as Australia’s new positive narrative. However, while Australian agricultural exports have shown strong growth in recent years, they too appear to now be experiencing the limits of China’s appetite.
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