Australian Production Challenges

I’m writing this week from a hotel room in Melbourne, Australia. My first week in Australia has been interesting and as in the US, I really enjoyed my conversations with pork producers.

My trip to Australia is sponsored by Australia Pork Limited (APL), which is their check off organization, just like our National Pork Board. In the US, our mandatory check off rate is $0.40 per $100 of value at sale. In Australia, they deduct $2.50 per sale, of which $2.35 goes to APL for education, promotion and research. It’s not clear to my yet if they are allowed to lobby or become politically involved with this money.

The big concern by producers in Australia is the future of their industry. Like the US, they are coming off of several years of tremendous losses that resulted in over a 50% decline in the number of producers. Their losses were due in part to extremely high grain prices associated with the 5-7 years of drought.

This year it is raining in Victoria (the south eastern most territory with Melbourne as its capital) and they are looking at a record harvest in a few weeks of winter wheat. Now their complaint is the strong Australian dollar. Currently, the US and Australian dollar are at par, meaning 1 for 1. This is only the second time in recent history this has happened, and their market is being flooded with American meat.

When I tell them about $5 corn and $145 per pig total production costs, they can’t understand why we would be complaining. Their estimated cost of production for a 100 kg pig (220 lb) is over $200. While the current slaughter price is sufficient to pay most or all costs, it is too high to compete with American pork in the meat case.

On Thursday, I spent the day with a producer in Victoria who has 2000 sows farrow-finish. All of his pigs are liquid fed, and he uses a very wide variety of ingredients to keep his feed cost relatively low. Right now a good share of his diet for all stages of pigs consisted of barley malt screenings and reject chocolate (70:30 mix). He blends this with a host of alternative ingredients and has very good pig performance.

Pigs are weaned at 28+ days of age and one of the largest grocery chains has announced it will not buy pork from farms where gestation sows are in crates beginning in a few years. Like the US, this has caused a lot of controversy and angst as producers and scientists both talk about the benefits and consequences of abandoning crates. Again the worry is that while Australian producers may not be allowed to use crates in gestation, American pork coming into the country and into this chain, will come from producers who use crates.

Plasma protein for weaned pig diets has been unavailable to the Australian industry due to import quarantine issues. However, a Chinese company has now constructed a plant that is producing porcine plasma protein. I am sharing the agenda at several sites with a young PhD candidate who worked with this product for her thesis. Similar to our experience, plasma protein in weaned pig diets has an immediate and positive impact on feed intake for the first week at weaning, along with potential immunological impacts on gut health. So far the producers I’ve talked with can’t wait to get their hands on it.

There are a limited number of swine veterinarians in the country. There appears to be only 2 practices devoted to swine only, and students in veterinary schools don’t get much exposure to pigs or pork production. During the farm visit on Thursday, the young veterinarian for the farm I visited was with me, and as I talked about some ventilation challenges the farm was having (too many inlets to the nursery rooms resulting in drafting of pigs, etc), she said it was the first time in her experience she had been exposed to any training or education regarding ventilation.

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