THE Australian pork industry is a “victim of its own success”, according to Australia Pork Limited (APL) general manager – marketing Peter Haydon.
Mr Haydon said pig producers across the country were experiencing “undoubtedly very tough” conditions which have been brought on by a profitable 2015-16 period that saw producers increase investment and improve productivity.
That increased productivity has seen an oversupply of fresh pork meat in the domestic market, which has put downward pressure on prices.
Mr Haydon said despite the difficult time producers were experiencing, demand for pork meat wasn’t decreasing, with figures showing that exports increased 16.5 per cent for the past 12 months, with a 30pc increase in the month of June compared with last year.
He said that was largely due to existing markets taking more product.
Mr Haydon said if the domestic oversupply wasn’t so big it would be a different story because domestic demand had been up, with one third more pork being consumed than it was 15 months ago.
“Demand is growing everywhere,” Mr Haydon said.
“The production growth has been so fast we are still catching up with it.”
Mr Haydon said it was “anybody’s guess” how long the industry would have to struggle through the issue but historically a profitability crisis would last about two and a half years.
“We are about 1.5 years in so hopefully next year we will start seeing improvement I suggest,” Mr Haydon said
“But it is not easy to tell.”
He said the level of imported pork hadn’t changed since 2015 and while that had impacted “significantly” on ham and bacon sales, it was a separate issue to fresh meat.
“The majority of fresh meat sales is from Australian pork,” he said.
“This over supply of fresh meat has caused the domestic price crash.”
Mr Haydon said the national average price required for a producer to cover costs was 270c/kg, however that could be impacted by the rising costs of grain.
He said APL would do its best to help producers by continuing to invest $450,000 a year in the marketing campaign ‘Get more pork on your fork’, as well as “providing the best possible information for producers to make the best decisions”.
The WA pig industry has been tight-lipped about the issues despite their concerns.
While everyone in the industry is feeling the impacts of a downturn in prices and oversupply from the Eastern States, some smaller pig producers have been shooting stock because they were not worth the cost of production.
Farm Weekly has been investigating claims of producers shooting their stock for months but very few people within the industry have been willing to go on the record due to the nature of the WA industry – being so small and with only a few processors to supply to.
Some producers however, have managed to survive the current crisis by supplying small butchers in Perth and said without this demand, they would be forced out of the industry.
There are also rumours circulating that Linley Valley Pork has lost one or two contracts in Singapore and as a result its freezers are at full capacity, leading to cancelled or reduced supply from some of its long standing suppliers.
Linley Valley Pork has not responded to questions nor confirmed or denied the rumours.
East Victoria Park, Perth, butcher Helen Goddard-Borger from Swansea Street Markets, said she had concerns for small producers.
“The market is a little ridiculous at the moment, pork is so cheap,” Ms Goddard-Borger said.
“There is an oversupply of pigs and small pig farmers are shooting pigs.
“Small pig farmers are really hurting.”
Ms Goddard-Borger said pig producers were trying to sell direct to butchers due to the penalties placed on them from processors and the lack of sustainable prices being offered.
She questioned the whole industry, asking “where is Australian Pork Limited in its advertising of local product and its encouragement to buy Australian pork?”
Ms Goddard-Borger said she was concerned about the long-term impact on the industry.
“It’s not a good thing,” she said.
“Lamb is too expensive for ordinary people.
“My average customer is not better off and so it’s harder to sell.
“It’s great to sell cheap pork but I’m worried about the future – it’s not a good thing.”
Ms Goddard-Borger said she was selling pork legs for 350c/kg and they would be cheap at Christmas.
One producer who didn’t want to be named said he shot 40 pigs a few weeks ago because they weren’t worth the cost of production.
Another producer, Ron Burro, Southern Cross, who has about 25 sows, said some larger producers had been told there was no need for their pigs as there was an oversupply at the processor.
Mr Burro said the industry would see producers cut back their production and stop breeding to minimise their costs in order to stay viable into the future.
He said he was fortunate to have direct supply to a Perth butcher, which was keeping him in operation.
The WA Pork Producers Association (WAPPA) has also come under fire from small producers for not standing up for them enough and for being to closely aligned to the processors.
WAPPA president Dawson Bradford said the bigger producers in the State were working with the processors to find a way forward and he had heard talk about small producers having to shoot their stock, but wasn’t sure if it was accurate.
“Small producers are in and out of the industry and they can’t expect processors to look after them when they only supply one or two pigs at a time,” Mr Bradford said.
