THE WA pork industry has taken a major blow after the third biggest producer, GD Pork, was put into administration.
High grain prices and an oversupply of local pork has taken its toll on the industry with some producers having to scale back their breeding programs or destock.
GD Pork, which produced more than five per cent of the State’s herd is expected to be a huge loss to the industry, although there is the possibility of a take-over or lease arrangement with other companies who want to improve their herd genetics.
The company turned off about 1400 pigs a week from its 75,000 head capacity pig production system in the Kojonup shire.
There has also been talk that Linley Valley Pork has dropped some of its contract suppliers due to the market conditions and a reshaping of its business strategy – and that GD Pork was one of these.
Martin Jones, of Ferrier Hodgson, has been appointed the administrator.
WA Pork Producers Association president Dawson Bradford, Hillcroft Farms, Popanyinning, said he couldn’t comment about the reasons why GD Pork had become insolvent but there had been “a few smaller pork producers that had left the industry” in recent months due to the financial pressure from high grain prices and from the oversupply.
“Some of them have also destocked for other reasons,” Mr Bradford said.
“We might see some come back at a later date when things turn around in the industry.”
Mr Bradford said the market situation “hadn’t changed yet” after being put under pressure since April, although there was positive signs that things could be improving.
Outgoing Australia Pork Limited chief executive officer Andrew Spencer said GD Pork was “clearly a significant player in the West”, with about 2500 sows, and it was likely that someone would take over the operation because of the significant investments the business had made in recent years and its quality genetics program.
GD Pork started its operation in 2007 with backing from Danish investors and had spent millions of dollars on state-of-the-art facilities to increase carrying capacity and improve animal welfare outcomes.
GD Pork was in the spotlight recently with its managing director Torben Soerensen and internal consultant and technical expert Henning Laue facing charges under the Biosecurity Act and Quarantine Act in the Mandurah Magistrates Court, involving the illegal importation of pig semen.
A plea was not entered for GD Pork for 12 charges of aggravated illegal importation and four charges of bringing or importing conditionally non-prohibited goods into Australia.
Mr Soerensen did not enter a plea to 11 charges of aiding, abetting, counselling or procuring the commissioning of an offence and Mr Laue did not enter a plea to seven charges of the same.
The maximum penalty for an illegal importation to obtain a commercial advantage is 10 years jail and a $420,000 fine, or for a corporation the maximum penalty is $2.1 million.
The case has been the subject of an ongoing investigation by the Department of Agriculture and Water Resources (DAWR) since January 2017.
DAWR said the charges related to the alleged “deliberate illegal imports of pig semen over a number of years”.
DAWR said the were no food safety or ongoing biosecurity concerns associated with the case.
“The biosecurity risks have been effectively managed and there is no impact on the safety of Australian pork or our animal health,” it said.
DAWR said illegal imports of pig genetics could carry significant risks including porcine reproduction and respiratory syndrome and Foot-and-Mouth Disease (FMD).
“It has been estimated that FMD could cost Australia about $50 billion over a decade if it was to arrive here,” DAWR said.
“These imports can also increase the risk of African swine fever arriving in Australia.
“This disease has no known cure and is another major threat to our $5.3b pork industry.”
DAWR said there were specific conditions for the import of animal genetic material and breaches of these conditions would not be tolerated.
Mr Bradford said this was “the first time a charge has been laid for importing genetic material into the Australian pig industry”.
“It’s a huge risk to the biosecurity of the WA pork industry.
“Anyone who breaches the biosecurity laws must be dealt with accordingly.
“We cannot afford to have the health status of the Australian pig herd jeopardised.”
APL said the incident had the potential to damage Australia’s pork industry, as well as the livelihoods of more than 2500 pig farmers and 36,000 supply chain workers.
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Mr Spencer said that since authorities uncovered the alleged breach APL had worked closely to support investigations.
“Australia is one of the few countries to remain free from African swine fever, and porcine reproduction and respiratory syndrome, which could devastate Australia’s pork production systems and cause significant pain and suffering for affected animals,” Mr Spencer said.
“Additionally, if foot and mouth disease were to get into the country, it would also be catastrophic for Australia’s broader livestock production system.
“The alleged actions of this business therefore could have put Australia’s’ rigorous biosecurity measures at risk, and threatened the integrity, safety and value of Australian food production.
“While we are fortunate the breach was contained, it reinforces the need for vigilance, and sends a message to Australian producers and the broader public that any biosecurity breaches will simply not be tolerated.
“Australian pork is of the highest quality, produced under stringent, world-leading animal welfare standards and biosecurity systems.
“This cannot and will not be compromised.”
