Droughtmaster: Strategic Plan 2023 - 2025

THE NEXT PHASE STRATEGIC PLAN 2023 - 2025

SHELLY HAWKINS, HERBERTVALE STATION

1

STRATEGIC PLAN 2023 - 2025

Table of Contents CEO’s MESSAGE

2

PRE-TEXT

3

WHERE ARE WE NOW?

7

WHERE ARE WE HEADED?

13

HOW WILL WE GET THERE?

20

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DROUGHTMASTER – AUSTRALIA’S NATURAL WONDER

CEO’S MESSAGE The Next Phase Strategic Plan is designed to build on the o f undations implemented rf om our previous Strategic Plan, The Road Ahead. This new plan o f cuses on growing our geographic o f otprint both in terms of membership and inventory and also address opportunities to diversify our income streams. This plan has been prepared considering risks around changes in seasonal conditions, economic o f recasts, market o f recasts and the Society’s current business model. We must continue to evoe lv and be ready o f r new opportunities when they present. To achieve our strategic targets requires change, a exible mindset and adoption.

Simon Glon,se Chief Executiv Oierc

PRE-TEXT

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DROUGHTMASTER – AUSTRALIA’S NATURAL WONDER

THE ROAD AHEAD STRATEGY 2020 - 2022 Goals Achieved

Building a Solid Foundation

Delivering Consistently Well

Superior Performance

• Membership retention and member benefits

• Growth in membership and industry registrations

• Best practice performance against industry benchmarks

• Corporate governance – refinement of subcommittees and charters

• Maintain efficiencies via continued drive on strategic cost management

• Improved YOY visitation of Society sponsored events and sales

• Constitution review and update • Cultural reset – ‘productivity, unity & positivity’ • Refresh of corporate identity and communications interface, including marketing and communication strategy • Financial management – planning and strategy, five year corporate financial model

• Retention criteria of corporate partners and sponsorships • Enhanced working relationship with industry stakeholders • Up-weighting of Society events and sponsored sales • Recognised for industry leadership and breed excellence

• Data capture and utilisation

• Industry and Society knowledge backed by data validation

• Establish sponsorships and partnerships

• Recognised brand throughout the supply chain

• Society sponsored sale reviews

• Markets available for export

• Superior and sustainable financial performance and management • Superior recognition of breed excellence • High class operational efficiency • Superior recognition in both domestic and international markets • Superior brand awareness

• Engagement and alignment with industry stakeholders

PHASE 1

Year 1 - 2 | 2020 - 2021

PHASE 2

Year 3 - 4 | 2022 - 2023

PHASE 3

Year 5+ | 2024 – beyond

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STRATEGIC PLAN 2023 - 2025

HISTORY OF AUSTRALIAN CATTLE NUMBERS

Beef exports open up with strong global demand

Million

Depreciation of the AUD

GFC

33 31 29 27 25 23 21 19 17 15 1962

1966

1970

1974

1978

1982

1986

1990

1994

1998

2002

2006

Years of Wet = Rebuild

2010

2014

2018

Years of Drought

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DROUGHTMASTER – AUSTRALIA’S NATURAL WONDER

AUSTRALIAN CATTLE NUMBERS

AS AT JUNE 2021 – NATURAL RESOURCE MANAGEMENT REGION National cattle numbers: 24.4 million head

Cape York 65,741 head

Northern Territory 1,726,982 head

Cooperative Management Area 106,625 head Northern Gulf 781,785 head

Rangelands 1,226,061 head

1.7

million

Southern Gulf 1,126,772 head

10.7

Terrain NRM 138,952 head

million

2.1

million

North Queensland Dry Tropics 1,249,795 head Desert Channels 1,357,692 head

9

1.0

million

Reef Catchments 117,627 head

4.4

million

6

Fitzroy Basin 2,523,546 head

4

South West Qld 618,653 head

2

3.6

Burnett Mary 768,138 head

million

0.8

Top 20 cattle regions 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

1

3

5

million

10

NRM region

State Total head

Fitzroy Basin Northern Territory Desert Channels North Queensland Dry Tropics Rangelands Southern Gulf Queensland Murray Darling Basin Glenelg Hopkins Northern Gulf Burnett Mary West Gippsland North West NSW Northern Tablelands South East South West QLD Condamine Riverina Goulburn Broken Central West Corangamite

QLD NT QLD

2,523,546 1,726,982 1,357,692

QLD

1,249,795

WA QLD

1,226,061 1,126,772

QLD

1,012,253

VIC QLD QLD VIC NSW NSW SA QLD QLD NSW VIC NSW VIC

844,854 781,785 768,138 732,627 683,009 666,946 638,696 618,653 560,814 528,651 504,895 495,936 437,173

15

Northern Tablelands 666,946 head 13

North West NSW 683,009 head Western 175,582 head

19

Perth 2,011 head

Central West 495,936 head Hunter 383,185 head Central Tablelands 319,191 head

17

Peel-Harvey 104,094 head

South Coast 305,172 head

North Coast 380,237 head

12

Wheatbelt 58,675 head

South West 326,465 head

South East Qld 300,226 head

16

7

Northern Agricultural 109,670 head

Queensland Murray Darling Basin 1,012,253 head Condamine 560,814 head

Greater Sydney 34,695 head South East NSW 387,743 head Riverina 528,651 head

14

SA Arid Lands 139,271 head Eyre Peninsula 9,422 head Northern and Yorke 40,551 head Kangaroo Island 15,114 head

ACT 3,957 head

18

8

20

11

Murray 375,079 head

Adelaide and Mount Lofty Ranges 63,964 head SA Murray Darling Basin 139,998 head South East 638,696 head

North East 388,150 head East Gippsland 108,436 head Goulburn Broken 504,895 head

Please note: In 2015–16 the ABS survey structure changed which removed small farm businesses with an estimated value of agricultural operations <$40,000.

Mallee 26,497 head Wimmera 54,926 head Glenelg Hopkins 844,854 head North Central 239,465 head Corangamite 437,173 head

MLA makes no representation as to the accuracy of any information or advice contained in this document and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice.

Reproduction in whole or part of this publication is prohibited without prior consent and acknowledgement of Meat & Livestock Australia.

Source: Australian Bureau of Statistics and Australian Government Land and Coasts

West Gippsland 732,627 head

Port Phillip and Western Port 239,629 head

North 366,649 head South 42,505 head Cradle Coast 370,919 head

MARKET INFORMATION

WHERE ARE WE NOW?

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DROUGHTMASTER – AUSTRALIA’S NATURAL WONDER

DISTRIBUTION OF DROUGHTMASTER AUSTRALIA FEMALE INVENTORY (OVER 20 MONTHS) 2022 •

Droughtmaster Female Inventory has been growing in line with National herd rebuild.

•

Female inventory over 20 months is our core income stream.

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STRATEGIC PLAN 2023 - 2025

DROUGHTMASTER AUSTRALIA FEMALE INVENTORY

Female Inventory as at August (Over 20 months) 40,000 35,000

30,000 25,000 20,000 15,000

10,000 5,000 0 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

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DROUGHTMASTER – AUSTRALIA’S NATURAL WONDER

DISTRIBUTION OF DROUGHTMASTER AUSTRALIA MEMBERSHIP (2022)

2005 – 519 MEMBERS

2022 – 647 MEMBERS

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STRATEGIC PLAN 2023 - 2025

PURPOSE & AMBITION DROUGHTMASTER AUSTRALIA

AMBITION

•

•

A cattle breed that consistently performs to a high standard despite adverse environments, continually producing high quality and high yielding carcasses economically.

To be recognised nationally throughout the entire supply chain (paddock to plate) as a breed that was developed in Australia to suit the Australian environment for its versatility and consistently high meat quality.

PURPOSE

GROWTH STRATEGY

•

Promote, develop and protect the breed and the brand, identify activities that will further increase breed participation; and

•

•

Enhance membership of the Breed Society, by delivering more efficient services, benefits and value.

“The Droughtmaster breed is poised for significant growth given its adaptability to many environments and its suitability to multi- markets. This is a breed that has been developed to naturally and sustainably meet the requirements for our changing future”.

Society President - Todd Heyman

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DROUGHTMASTER – AUSTRALIA’S NATURAL WONDER

OUR VALUES HONESTY & INTEGRITY

FAIRNESS & RESPECT

Accountable to the highest ethical standards, demonstrating honesty, professionalism and sincerity.

Empowering others to reach their potential, demonstrating unity, humility, grace and gratitude.

PASSION & EXCELLENCE

CURIOSITY & CHALLENGE

Striving for excellence, taking responsibility for our actions and decisions.

Creating an environment whereby curiosity, challenge and innovation is encouraged.

RISKS TO DROUGHTMASTER AUSTRALIA Drought and Seasonal Conditions

Reluctance to Embrace Environmental and Social Governance (ESG)

Economic Volatility Advances in Other Breeds Falling Cattle Prices Consumer Trends Financial Risk (Short-term Liquidity Risk) MLA Funding and Continuation of the BIN Project

WHERE ARE WE HEADED?

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DROUGHTMASTER – AUSTRALIA’S NATURAL WONDER

THE BEEF INDUSTRY SIMPLIFIED

DRIVERS OF DIFFERENT SEGMENTS IN THE BEEF INDUSTRY Stud Breeders

Commercial Breeders

Markets/ End Users

STUD ESTABLISHMENT DRIVEN BY:

BEEF PRODUCERS DRIVEN BY:

MARKETS DRIVEN BY:

• Data • Environment & seasonal conditions • Animal Temperament

• Eating quality and market suitability

• Bull selection

• Bull sale results and demand

+

• Economics and adaptability • Carcass performance • Sustainable beef production

• Husbandry requirements

• Data

• Breed Society status

• Animal Temperament

• Social experiences (shows & events)

• Environment & seasonal conditions • Markets • Female herd composition

=

• Sustainable and natural beef production • Provenance • Supply & demand (price)

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STRATEGIC PLAN 2023 - 2025

FUTURE AHEAD

Droughtmaster beef served on menus across Australia Diversified income streams

A reputation as Australia’s most natural and sustainable beef cattle breed

Greater exposure in school curriculums

Breed development and data

40,000 Females (over 20 months) by 2025

750 Members by 2025 Geographic spread/growth

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DROUGHTMASTER – AUSTRALIA’S NATURAL WONDER

OPPORTUNITIES FOR MEMBERSHIP & INVENTORY GROWTH DARWIN

BRISBANE

PERTH SYDNEY ADELAIDE CANBERRA MELBOURNE

HOBART

Opportunities for Stud Growth (stud members)

Opportunities for Commercial Growth (commercial members)

Opportunities for Stud & Commercial Growth (stud & commercial members)

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STRATEGIC PLAN 2023 - 2025

GROWTH - DROUGHTMASTER AUSTRALIA FEMALE INVENTORY 2023 - 2025 Female Inventory as at August (Over 20 months)

PLAN

45,000

Implementation of the Strategic Plan, The Road Ahead 2020-2022

40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010

2011

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

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DROUGHTMASTER – AUSTRALIA’S NATURAL WONDER

DIVERSIFIED INCOME STREAMS

Income Streams

Strategic Investments

Partnerships BIN Project

Society As per Mann Judd risk assessment report we need to be diversifying and expanding our income streams.

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STRATEGIC PLAN 2023 - 2025

TARGETED GROWTH AREAS - DROUGHTMASTER AUSTRALIA MEMBERSHIP Members (October 2022) Stud Member

160

Commercial Member

140 120 100 80 60 40 20 0

Far Northern

Northern

Central

Southern

South Eastern

Membership Established

Far Southern

Western

Overseas

HOW WILL WE GET THERE?

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STRATEGIC PLAN 2023 - 2025

STRATEGIC PRIORITIES Breed Development

Marketing & Promotion

Sales, Events & Activities

Society Projects

Member Engagement

ACTIONS

ACTIONS

ACTIONS

ACTIONS

ACTIONS

• Transition to Single Step • Improved Data Capture (eating quality, carcass performance, feed program performance) • Communicate BIN Project Results • BREEDPLAN Incentives • Development of commercial market indicies

• Benefits of the Droughtmaster female • Strategic partnerships • Suitability to multi-markets • Droughtmaster beef • Commercial performance and sustainable and natural production (both grass and grain fed) • Testimonials and case studies • Bull and female sales • Benefits of cross breeding

• Strategically targeted locations • Investment & improvements to existing sales, events & activities • Increased commitment to school agricultural programs and provide content for their curriculums

• Improvements to office facilities • Diversified income streams • Financial management and Investment • Business model improvements • Staff training & development • R&D funding for various projects

• Celebrate our people • Heighten the appeal of being a member • Provide members with educational content to assist with operating their businesses • Regular and efficient communication

OPERATING OUTCOMES

OPERATING OUTCOMES

OPERATING OUTCOMES

OPERATING OUTCOMES

OPERATING OUTCOMES

• Transition to Single Step • Improved Data Capture (eating quality, carcass performance, feed program performance) • Communicate BIN Project Results • BREEDPLAN Incentives • Development of commercial market indicies

• Increased registrations • Membership growth • Growth in our geographical footprint • Increased demand for Droughtmaster Bulls and Females • Increased awareness of the quality and demand for Droughtmaster beef • Less reliance on BIN Project Income

• Increased registrations • Growth in our geographical footprint • Increase in the number of schools using Droughtmaster cattle in their curriculum • Income to subsidise labour costs for Society Sponsored Sales

• Improved operational efficiency • Growth and sustainability of the Society • Additional Income Streams • Commitment to ESG

• Member retention and improvements in value to members.

• Member satisfaction

SHELLY HAWKINS, HERBERTVALE STATION

SIMON GLEESON Chief Executive Officer