Bringing home the bacon

But it’s a battle they are starting to gain ground on, following some painful years of industry rationalisation.

While getting Australians to buy Australian pork – and more of it – has been gradually improving, another bright light is the emerging export markets which could offer producers a strong alternative to the domestic market.

This comes during a period when pig production, slaughter and prices for porkers and baconers have all consecutively lifted.

Pig production rose 5.1 per cent to 30,855 tonnes (for October 2014 compared with October 2013), slaughter rose 4.4pc to 407,000 head and prices lifted 13pc to 590 cents a kilogram, well ahead of the December rolling average of 522c/kg.

Australian ham and bacon holds a meagre 30pc of the domestic market, with imports from countries such as the US, Denmark and Canada taking the lion’s share.

The domestic market makes up about 90pc of Aussie pig meat sales.

However, Australian Pork Limited (APL) chief executive Andrew Spencer said export volumes were up about 12pc for the year to the end of May 2014.

All up, Mr Spencer said the export/import mix had worked in a positive direction for the Australian pork industry during the past year.

Traditionally the main market for pork exports was Singapore, but recently there had been noticeable growth in what Mr Spencer referred to as “the second tier destinations”, such as Hong Kong, the Philippines and Papua New Guinea.

Currently these markets each contribute between 11pc and 12pc of the volumes exported, but to put this into perspective they were opportunity sales that offered Australia consistent trade of small volumes.

The Hong Kong market was mainly taking high-end product for the hotel and restaurant trade, while the Philippines was buying mostly offal.

Much of the Papua New Guinea buying was for defence contracts.

The only drawback with these markets was value growth was lower, reflecting the lower value per kilogram for product going to these countries.

Markets such as China and Korea were also on APL’s radar for high quality and high-end trade.

The calendar year to date export figures from Department of Agriculture peg shipments at 165,075t, while at the same time last year exports were at 152,430t.

On the other hand, imports declined about 20,000t (shipped weight) in the past financial year.

Mr Spencer said the imports to the end of May were down to about 134,000t compared with levels consistently above 150,000t a year ago.

“At the moment about 80 per cent of Australians buy fresh pork in any one year according to APL, but on average (and unlike other popular meat cuts and species), consumers are yet to eat it weekly,” he explained.

APL views this as a big domestic opportunity for the Australian consumption of fresh pork.

APL chairman Enzo Allara said both sow numbers and slaughter figures had been relatively stable with the growth in carcase weights increasing the availability of supply.

A cursory look at the figures shows an industry with roughly constant production numbers of about 4.75 million pigs during 2013-14.

“This has enabled the supply of fresh pork to meet the growing consumer demand which has also resulted in an increase in the per capita consumption of fresh pork,” he said.

“This, together with the increased number of fixed price contracts between buyer and seller, has underpinned the relative stability in pig prices.”

In the lead up to Christmas wholesale pork prices were steady on about 560 cents a kilogram according to the National Livestock Reporting Service.

Mr Spencer added that ex-farm gate pig pricing during the past 12 months had reflected a supply-demand relationship slightly more in favour of the producer through incremental price increases.

“Given comments about expanding export volumes, the supply situation for pork on a per capita basis seems even tighter,” he said.

He said the limits of supply were brought about by a hesitation within the industry to expand production, even with slowly increasing demand.

“This seems to be driven by risk aversion still lingering in the industry since the producer profitability crisis of 2007-08 and the higher than average grain prices during the past couple of years limiting profitability,” he said.

“While present producer profitability seems to be positive, it is not at a high enough level to initiate reinvestment into the industry at rates required.”