November 24, 2008

Australia's pork industry is playing catch up with imports, as many domestic pig farmers exit the sector due to rising feed costs and high volumes of subsidised pork imported from the US, Canada, and Denmark.

Emily Mackintosh, GM of communications for Australian Pork Ltd, said imported pork have pushed down prices and the meat comes from countries that heavily subsidise their pork sector.

Australian pork producers have to sell a whole pig, while the meat portions imported from foreign markets are identified as the least profitable cuts for those particular markets, said Mackintosh, adding that the exporting countries are selling the unwanted cuts to Australia at suitable prices.

"In the deli cabinet, there are three labelling categories. There is 'Product of Australia' which is grown in Australia, there is 'Made in Australia' and around 70 percent of that market is from imported products, and then you've got 'Made from Local and Imported ingredients' and that's also about 70 percent, maybe more, imported product," Mackintosh said.

Mackintosh said producers had either cut back on production costs or left the industry entirely, which left a gap in the supply chain, for the past 12 months. 

"The big processors rolled out the last of their hams on October 31 so there hasn't been a great impact on those prices as there will be on the fresh pork market which is starting to come through now," Mackintosh said.

During this time last year, the Australian pork industry lost between US$3-4 million per week, Mackintosh said.

Mackintosh added that the situation may have been better if Australia had a more competitive retail market.