PIG producers are enjoying a profitable year, with returns remaining stable and input costs low.
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Australian Pork Limited chief executive officer Andrew Spencer said there had been a change in pricing trends.
“We used to have a big dip in the middle of the year and a spike at the end of the year in the lead-up to Christmas,” he said.
“But with the structural changes and consolidation within the industry, the mid-year dip has disappeared.
“It’s a great outcome for producers because it means more security, knowing where prices are going.
“It’s driven by the longer-term contracts that are in place.”
Mr Spencer said producers were generally making about $3.70 a kilogram carcaseweight.
“If you look back across the last 10 years, that’s a very good number,” he said.
“It’s driven by very good demand for our product.
“With grain prices being where they are, it’s a bonus for producers.”
While demand for Australian pork was high, imports were still coming in at high levels.
“It’s good that the Australian dollar has been weaker,” Mr Spencer said.
“But the demand for our product in the fresh pork market is so high, it’s pulled in a lot of the product that would have gone into processed meats.
“So, that’s had to be replaced by imports. The imports coming in are still pretty high, but the good thing is, they’re not growing.
“There’s still been about 170,000 tonnes shippedweight imported pork come in across the past 12 months.”
Mr Spencer said imports were likely to remain fairly high until Australian production ramped up further.
“In volume terms our production has risen about 3 per cent in the past year, which is well above population growth,” he said.
“But, until production catches up with the demand, I can’t see import numbers coming off.”
The low $A has helped in a major export market.
“Since the $A came back, the Singapore market has picked up and we’re much more competitive there,” Mr Spencer said.
“Singapore is a really good market for us, we can air-freight boxed pork and half carcases into the higher end of the market.
“While export volumes to Singapore are stable, the value has been growing.”
Mr Spencer said with New Zealand accepting fresh pork imports from other countries, it meant stronger competition for the Australian product.
“Our export markets include Hong Kong, the Philippines and Papua New Guinea, but it’s really only small exports we send there, Singapore is the major market,” he said.
