November 23, 2005

 

Australian pork industry battles to save itself; imports rise

 

 

Pork producers have been moving to save their beleaguered local industry in the face of stiff competition from imports, high input costs and downward pressure on selling prices, Andrew Spencer, chief executive of marketing/services Australian Pork Ltd., said Wednesday.

 

Other key challenges confronting the industry included a relatively strong Australian currency, which weighed on exports, and a need to better manage the impact of drought, which could sharply increase the price of feed grains, which accounted for about 50 percent of production costs, he said.

 

"It's not a particularly pretty picture," Spencer told the company's annual conference, the theme of which was "Driving Our Own Destiny."

 

Pork exports fell to 49,176 tonnes valued at A$163 million the previous fiscal year ending Jun 30, from 62,900 tonnes in fiscal 2002-03.

 

At the same time, imports of 78,624 tonnes valued at A$311 million the previous fiscal year were up from 47,400 tonnes in fiscal 2002-03, according to industry and official data.

 

Major sources of imports included Canada, Denmark and the US.

 

Bone-free pork imports were almost equivalent to about 20 percent of total Australian pork production.

 

Spencer said the industry's survival strategy included taking responsibility for its own success or failure.

 

The industry could no longer rely on banks, the courts or the government "to deal up success on a platter," with this representing a significant shift of attitude, he said.

 

"Time is short, we need to act now."

 

Spencer said a key element of the survival strategy included boosting demand for fresh pork, a market only supplied by domestic producers, he said.

 

The industry must reduce supply chain costs, where it was not competitive by world standards, he said.

 

This included lifting feed conversion rates through better pig genetics, and improving the security of feed supplies for longer into the future, such as looking at the potential of importing grains to reduce costs, he said.

 

In August, Agriculture Minister Peter McGauran opened a Pork Cooperative Research Center at Adelaide University, and some of its programmes would be aimed at reducing industry feed costs.

 

The industry, universities and the government would provide A$81.5 million in resources over seven years to the research center.

 

On Friday, the High Court dismissed an application by Australian Pork Ltd. for special leave to appeal against the government's new quarantine protocols for imported pork.

 

In August, McGauran indicated the government would not provide further industry-specific assistance measures for the industry.