Domestic market demand to grow for SA pork

SA pork could meet demand created by African swine fever


Beef Week News 2018
LOCAL ADVANTAGE: PorkSA chair Mark McLean says reduced supply of imported pork products could make locally-raised pigs more cost-competitive in retail shops.

LOCAL ADVANTAGE: PorkSA chair Mark McLean says reduced supply of imported pork products could make locally-raised pigs more cost-competitive in retail shops.

Aa

Pork industry leaders have forecast products from Europe and the United States destined for Australia could be diverted to China to cover a supply shortfall

Aa

Pork industry leaders have forecast products from Europe and the United States destined for Australia could be diverted to China to cover a supply shortfall caused by the African swine fever epidemic, resulting in reduced access for local retailers.

In recent years, about three-quarters of pork products used in manufacturing bacon and hams sold in Australia has been imported.

Pork SA chair Mark McLean said reduced pork imports would result in less competition for SA producers.

"In the long-term we would expect the price of imported pork to increase, making locally-produced products a lot more cost-competitive," he said.

"Smallgoods manufacturers are already looking to top up their supply with locally-sourced products instead of imports because of price rises."

Mr McLean said in the past nine months, local pork prices had increased by 10 per cent, while in the past three years, they had risen from $2 a kilogram to $3.30/kg.

"We are coming out of an oversupply situation as an industry," he said.

"But, although we are experiencing moderate price rises in the past 12 months, our feed costs have increased by 15pc."

RELATED READING:Pork industry looks forward

Impact of African swine fever exposed

Mr McLean said most of the state's pork producers have had three years of deficit and "a basket of markets", including China, was required to help producers regain confidence in the industry and increase production.

"We would love access to such a large market in China, but the reality is our cost structure in Australia is very high compared with other countries," he said.

"As it stands, we would only be able to supply higher-value cuts or value-added products."

Smallgoods manufacturers are already looking to top up their supply with locally-sourced products instead of imports because of price rises. - MARK McLEAN

Australian Pork marketing general manager Peter Haydon visited China last week to discuss furthering Australia's ability to export and capitalise on the effects of ASF on China's ability to produce pork.

"I believe access to China directly is a big opportunity. But we still have to compete on a global scale for quality and cost," he said.

"Cost of production and processing is very high, our labour and electricity costs do not compete with other countries."

Mr Haydon said eight million tonnes of pork was traded globally each year and since ASF had affected about 200m pigs overseas, there would be a 15mt deficit in pork to fulfil.

"There is not enough pork supply worldwide to meet that demand - it will take Australia's entire pig industry to adjust to it," he said.

Mr Haydon said Australia and China did not have a "protocol", a set of rules agreed by each government, to decide how pork would be treated before it was exported or in transit between the two countries.

"We have the best herd health in the world so if we had a protocol, there could be a potential to produce breeding stock for China, similar to how the dairy industry does," he said.

"Global prices will also determine if imported pork to Australia remained viable and opened up a larger domestic market."

Serious disease spreads rapidly

MORE than 20,000 pork products have been seized at Australian airports since a ban was placed on visitors bringing products into the country after China's African swine fever outbreak in August.

About 15,000 packages sent via mail from overseas were also seized and six products have tested positive for the virus.

Mr Haydon said since the outbreak, it had covered "a lot of ground, very rapidly".

"The latest detection was in Hong Kong last week and it appears the transporting of pigs has been the main cause of it spreading so quickly," he said.

Mr Haydon said global supply shortages lay ahead after more than 200 million pigs had been slaughtered overseas since the outbreak.

"There will be 4 per cent less meat on the global market and if global meat demand increased by about 2pc a year, there will be greater demand than supply," he said.

"This should make Australian pork more competitive on the market."

  • Start the day with all the big news in agriculture. Click here to sign up to receive our daily Stock Journal newsletter.
Aa

From the front page

Sponsored by