Australian pork industry

I depart tomorrow afternoon for Australia and New Zealand where I will be visiting producer farms and doing presentations on feeders and drinkers. It is spring down under and on the south island of New Zealand I expect to see some corn planting.

I’ve been to both countries already so I look forward to catching up with producers, allied industry and university researchers. Like the US, Australia is currently in the midst of a major debate regarding funding for the future of production research. There are approximately 2.5 million pigs in Australia which is somewhat less than in the state of Nebraska. However, they have several world renowned researchers at several research locations across the country.

Current funding is a combination of Federal dollars, regional monies and Australian Pork Limited investments. Australian Pork Limited is the checkoff equivalent to our National Pork Board. However, unlike our current rate of 0.4% on revenue, their rate is much higher, meaning a bigger pool of dollars for investment in research, education and promotion.

In light of their relatively small industry and the many research needs, the industry has formed a CRC project comprised of producers (APL), university and government research centres and allied industry. Every 3-5 years they formulate a research direction and pool funds to address the problem identified. Dr Roger Campbell, who many readers of this blog have met, heads up the CRC effort.

Total pork production is estimated to be around 347 thousand metric tonnes in 2010. At the same time, pork imports are forecast at 200 thousand metric tonnes carcass weight equivalent. American producers supply about 40% of the pork imports to Australia, a number that has been growing.

Australian producers would like to export more pork since export of ag products, just like in the US, helps offset a negative trade balance. Total exports are forecast to be only 40 thousand metric tonnes which is only 20% of the import number.

As you might expect, producers down under are very concerned about the growing demand for imported pork. The weak US dollar has helped our exports to Australia, as has our product quality.

In Australia, fresh pork is sold ‘rind’ on, meaning pork chops in the meat case have a layer of pig skin. Similar to the US, consumers have demanded leaner products in the meat case. In the US, we attain some of this ‘leanness’ by using a knife at the packing plant to trim loins to 0.25” or even 0.125” fat thickness. In Australia they achieve ‘lean’ by having severe marketing penalties for any pig sold that has more than 0.5 inches of fat. As you might expect, US pork tastes better to many consumers since it routinely has a higher level of intramuscular fat.

The producers in Australia really struggle with the consumers preference for US (and Canadian) origin pork since the consumer also won’t let them market pigs that lets them compete head-on in the meat case. An interesting dilemma that currently favors US producers.

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