Australia pork output seen to increase until 2014-15

 

 

Pig production in Australia is expected to increase from the present 329,000 tonnes to 338,000 tonnes by 2014-15, according to James Fell in Australian Commodities report for March 2010 from ABARE.

 

The weighted average Australian sale-yard price of pigs is forecast to be 317 cents a kilogramme in 2010-11. While this represents a decline of 1% from the average price achieved in the previous year, this forecast remains around 33% higher in real terms than the average price over the five years to 2008-09.

 

Over the medium term, the weighted average sale-yard price of pigs (in 2009-10 dollars) is projected to fall gradually to 297 cents a kilogramme in 2014-15, which reflects increases in both domestic pork production and imports.

 

Under the assumption of a gradual depreciation of the Australian exchange rate toward 2015, growth in import demand could ease marginally over the outlook period.

 

Domestic pork production is forecast to remain largely unchanged at 329,000 tonnes in 2010-11. Production is projected to increase to 338,000 tonnes by 2014-15 as producers respond to relatively high real prices projected over the medium term and more favourable feed grain costs.

 

Feed costs account for approximately 55% of total production costs. Over the outlook period, the pig-to-feed grain price ratio, which is an indicator of returns from pig production, is expected to remain largely unchanged from current levels.

 

In 2010-11, pork imports are forecast to increase by 4% to 148,000 tonnes as a result of the relatively high value of the Australian dollar. Australian Pork Limited estimates that around 70% of processed pig meat consumed in Australia is currently sourced from imports.

 

The processed pork sector accounts for around 60% of total pig meat sales. As the domestic pig meat industry increasingly focuses on the fresh pig meat market, the scope to which imports can substitute domestic production or maintain downward pressure on domestic sale-yard prices will depend on the extent to which consumers will accept processed pig meat as a substitute to fresh pig meat. Australian pig meat imports are projected to increase only slightly over the medium term, to reach 151,000 tonnes by 2014-15.

 

Meanwhile, Australian pork export volumes consist of around 55% fresh pork, with exports to Singapore and New Zealand accounting for approximately 78% of all pig meat exports by volume.

 

Exports are forecast to remain stable at 27,500 tonnes in 2010-11. Towards 2014-15, exports are projected to increase to 29,500 tonnes, being supported by an assumed depreciation of the Australian dollar.