Pork producers starting to see light at end of tough tunnel
Pork producers are starting to recover from one of the industry’s toughest downturns.
South Australia’s pig industry has turned a corner after some very tough years, but consumers are being urged to keep putting more pork on their fork.
For some farm businesses, pork price rises have come too late and they have had to exit the industry following two years of trying conditions.
Pork SA chairman Mark McLean said that for some producers the downturn had simply gone on too long, after beginning early in 2017.
The prices farmers were receiving dipped below $2kg, well below most producers’ cost of production.
“A number of people have shut their doors,” Mr McLean said.
“While we’re now entering a different and more positive cycle price-wise, we still have high grain costs, which is a big problem.
“Most pork producers are receiving nearly $4kg now, but feed prices have also risen by 50c a kilogram, compared to 12 months ago.”
Australia-wide pig slaughters in the past month have dropped by nearly 10,000 pigs a week.
“It’s driving a shortage of pork in a number of markets, and that’s been the driver behind such strong price increases” Mr McLean said.
He estimates the pork industry has contracted by about 10 per cent in the past two years.
“That’s resulting from a combination of people closing their farms due to not being able to make a return, through to people who have reduced sow numbers as a way of managing their costs and remaining in business,” he said.
“Some producers made a deliberate decision to reduce their breeding numbers so they could make some savings on feed and labour costs.”
Australian Pork Limited’s general manager of marketing, Peter Haydon, said it had been a hard road for producers.
“It’s clear that the last couple of years have been really tough,” he said.
The downturn in pork prices was driven by a production lift, which led to an oversupply in the market. It came after prices went over $4kg three years ago.
“While we’re not quite at the price peak we saw in 2016, we’re getting close,” Mr Haydon said.
“The situation has turned around a bit faster than most of us anticipated.
“While grain prices are still high, it’s getting into a profitable environment again and prices are at a much more sustainable level.”
Mr Haydon said one of the few positives to come from the industry downturn was a change in consumer habits.
“While the downturn was horrible, it did lead people to eat a lot more pork, and it’s likely to remain in people’s buying habits,” he said.
“Retail prices for beef and lamb have been going up, and while pork has gone up a little bit, it’s still sitting somewhere between lamb and chicken, price-wise. So, pork is increasing seen as a good alternative to chicken by consumers.”
Of all the pork products consumed in Australia, only about 55 per cent comes from pigs farmed on Australian soil.
While all fresh pork is Australian-grown, Mr Haydon said when it came to ham, bacon and smallgoods, most consumers didn’t realise about 80 per cent of these products were made from imported pork.
This is despite Australian pork offering a fresher product, as some of the imported pork products can be ultra-heat treated and sit on a shelf for up to five years.
“Australian Pork Limited will be running a trial in Adelaide in early 2020, on how consumers can actually recognise what is an Australian product,” Mr Haydon said.
“The vast majority of consumers want to buy Australian, but they either don’t think about it while shopping or find Australian product hard to recognise.
“That’s why we’ll be launching a campaign involving television, radio, Facebook and Instagram, so regardless of the media you’re using, you’ll find the message.”
Food labelling can be hard to interpret, as even the well-known green and gold kangaroo logo only indicates that a product has been made in Australia – it can still contain imported pork and use the label.
Mr Haydon said an easier way to tell was looking for at least 60 per cent Australian ingredients on a product’s written statement. To make it easier for consumers to choose local product, Australian Pork Limited created a registered pink square logo – the PorkMark – that guarantees pork is 100 per cent Australia.