Industry background and challenges

1.1 Australian pork industry Overview

Australian Pork Limited (APL) has estimated that the Australian pork industry contributed $2.9 billion to the national economy in 2006-07. Globally, pork is the most popular meat with one and a half times more pork consumed than beef. The Australian industry is relatively small in the world market, accounting for only 0.4 per cent of the world’s production and around 1 per cent of world exports.

According to the Australian Bureau of Statistics (ABS) and the Australian Bureau of Agricultural and Resource Economics (ABARE) the industry is estimated to have in 2007-08:

• Produced approximately 5.4 million pigs
• produced 385,000 tonnes (carcase weight) of pork and
• had a gross value of production (GVP) of $880 million.

This decrease from the 2006-07 figure of $944 million occurred as a result of a lower number of pigs being produced stemming from the high cost of feed grain, and continuing drought, combined with low pig prices and record imports of frozen pork for processed pork manufacturing.

Pig producers are located throughout all states and are generally located in grain growing regions. The industry has the largest concentration in New South Wales (25.2 per cent) and Queensland (25.1 per cent), followed by South Australia (21.6 per cent), Victoria (15.8 per cent), Western Australia (11.8 per cent) and Tasmania (0.7 per cent). According to the ABARE data, just under 85 per cent of Australia’s pork production is consumed domestically. APL estimates that approximately 75 per cent of that amount goes to the domestic fresh pork market, with the remaining 25 per cent contributing to processed pork products. The export market is important for the Australian pork industry, in some years accounting for more than 20 per cent of Australia’s production. APL’s priority export markets are Singapore, New Zealand and Hong Kong. Pork imports, which began in 1995, have continued to rise sharply since 2000 and in 2008 were approximately 110 000 T. Major exporters to Australia include Canada, Denmark and the United States. These three countries account for 99 per cent of imports.

1.2 Pork R,D&E Challenges

The Australian pork industry, like a number of other agricultural industries, is facing a number of R,D&E challenges. These include:

• Many state government and university research facilities with insufficient funding and resourcing
• closure or rationalisation of a number of university and state government R,D&E providers
• lack of succession plans for a number of experienced scientists and advisors rapidly approaching retirement age and
• inability to attract sufficient skilled resources leading to an acute decline in employment opportunities in government research organisations for young agricultural science graduates.

On a more positive note, the revitalisation of pork R,D&E by the existence of the Pork CRC has seen an increased level of undergraduate and postgraduate students funded by the Pork CRC and APL. However, it is envisaged that a large proportion of these students are likely to go into private industry roles (technical sales, technical sales support, product managers etc) rather than research based positions.

There has been an increase in the number of private companies conducting pork R,D&E in-house, with private research based organisations now accounting for a significant proportion of pork R, D&E personnel. The loss of some key state government R&D facilities has also seen an increase in the use of private industry facilities to conduct public R,D&E, as well as an increase in the number of private companies building R,D&E facilities. Many of the State government R,D&E facilities are also in urgent need of funding to maintain them so that they can not only deliver valuable outcomes but also be seen as a showcase opportunity for pork R,D&E.

APL R,D&E funding has fluctuated mainly downward (over the last three years) in keeping with industry herd decline and consequently the decline in the industry-generated levies. The Pork CRC has helped reinvigorate pork R,D&E by providing additional funding to scientists enabling many to continue pig research rather than moving on to other career paths. APL funding to State government research organisations has declined over the last 5 years. State government funding of pork R,D&E has also declined and there has been a shift towards the conduct of contract research for pharmaceutical and feed additive companies at these State government R&D facilities.

The decline in R,D&E funds has seen a shift from managing large long-term R,D&E programs to smaller short-term projects resulting in an increase in smaller amounts of R,D&E funds allocated to a large number of individual groups or projects. There has also been an increase in the proportion of funds provided by private industry players to supplement State government R,D&E programs. The lack of pork R,D&E funds has occurred in parallel with an increase in the cross-sector R&D projects/programs to share R,D&E resources on common priority areas such as animal welfare, biosecurity, climate change and feed grains.

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