Despite Australian pork producers achieving commendable productivity gains and consistently good herd feed conversion rates, it might not be enough to offset the downside of an internationally uncompetitive cost of production.
This was the blunt warning delivered by Pork CRC chief executive officer Roger Campbell in his opening address at the 2017 South Australia Pig Industry Day.
‘‘The marked decline in our global competitiveness compared to 2014 is due to our feed costs going down slightly and those of all other countries going down substantially, resulting in the biggest differences in COP (cost of production) we’ve seen for 10 years,’’ Dr Campbell said.
‘‘The recent disparity in grain prices and feed costs is unusual and may only be a blip in the usual pattern, which is generally consistent across the globe.
‘‘With a bumper 2015-16 grain harvest in Australia, our grain costs will fall in 2017, but all other countries will also enjoy price falls.
‘‘While actual feed costs remain unknown, they might not be as low as some anticipate, especially considering that while grain prices have fallen substantially they only make up half of our pig diets, so the decline in feed costs will not be as large.’’
Dr Campbell suggested this could potentially make the Australian pork sector more vulnerable to imports and price falls, something that was being backed up by significant increases in investment in Pork CRC grower-finisher research and development.
‘‘I think 2017 will be a challenging and potentially uncertain year, with evidence emerging of unexpected pressure on price and this is clearly a concern to producers, as was clearly evident at the South Australian Pig Day.
‘‘On an optimistic note, given the quality of pork we produce and the providence behind it, processors and retailers recognise the inherent value of high integrity Australian pork.
‘‘I therefore hope buyers and ultimately consumers, will acknowledge the higher COP in Australia and continue to support the industry, as they’ve done for the past several years while our pork producers initiated and delivered a globally recognised and quite remarkable industry transition.’’