INCREASING carcase weight represents the greatest opportunity for productivity improvement for Australian pork producers, even though the industry is struggling with prices declined due to over supply.
Addressing pork producers in Western Australia’s annual Pig Day Out, Pork CRC chief executive officer Roger Campbell said that if a business model was developed where $2.70/kg could sustain producers, he was optimistic producers would have a positive future.
“Also, if buyers, including supermarkets, processors and others in the meat chain, could create markets for heavier pigs, producers would respond positively and reap rewards,” Dr Campbell said.
“Even grain prices, which are largely beyond a producer’s control and which have the heaviest impact on the bottom line, can be mitigated if, for example, other factors affecting cost of production can be better aligned.
“While it’s difficult to do much about grain and feed costs, except use the feed more efficiently, the greatest opportunity for reducing cost of production lies in volume and this is independent of grain price and hence more under producer control.
“Busting the $2.50 cost of production barrier and getting that down to, say, $2.30, would help.”
Dr Campbell had recently noted quite large increases in born alive and this too would help improve productivity, volume and, potentially, profitability.
“In Pork CRC’s benchmarking group we’re seeing consistent improvements in sow productivity, with better herds weaning 11 piglets per litter and 26 per sow per year,” Dr Campbell said.
Even grain prices can be mitigated if other factors affecting cost of production can be better aligned.
- Dr Roger Campbell
“If we get our average to this, we will take nearly 20c off other costs, independent of feed cost or carcass weight and if we get carcass weight up 5kg, we could reduce other costs by another eight to 10c.
"Global competitiveness is within our reach, but 2018 is likely to be volatile for the global pork industry.”
Australian producers were not alone in receiving less for their pork, with EU prices down 7.6pc on 2017; US down 22pc in the past month; China down 23pc in the past five weeks and UK down 2.5pc on 2017.