Australia / Analyst Insights
Pig farmers are benefiting from rising health consciousness

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by Sam Johnson
Apr 04 2017

fullstory_pigsPig farmers have performed strongly over the past five years, largely due to growing demand for fresh pork meat. While demand for processed pork has stagnated, consumers have increasingly opted to purchase fresh pork products, which typically attract higher prices than processed pork products. Australian Pork Limited, the industry’s main representative body, has undertaken marketing campaigns promoting the healthiness of lean pork meat. Advertisements have focused on presenting trimmed pork as a nutrient-dense source of protein.

While rising health consciousness has positively affected pork consumption, it has had the opposite effect on the Beef Cattle Farming industry. Health concerns regarding red meat consumption have constrained beef consumption in Australia over recent years. Beef cattle farmers have responded by investing in the production of beef with lower fat and cholesterol content.

Pig farmers have faced rising feed prices over the past five years, which have driven up input costs. However, most farmers have managed to pass these input cost increases on to customers by raising pork meat prices. Pig meat consumption has also increased over the period, further supporting price growth. As a result, the domestic price of pig meat is expected to grow strongly at an annualised 6.9% over the five years through 2016-17. The industry has increased pig slaughter rates over the past five years to take advantage of these high prices.

The domestic price of beef has also risen over the same period, growing by an annualised 5.0% over the five years through 2016-17. This has helped boost revenue for beef cattle farmers, despite rising health consciousness constraining red meat consumption among Australian consumers. Export markets have also supported demand for beef, particularly as a low Australian dollar has made Australian beef relatively cheaper in overseas markets. This has supported revenue and ensured growth for beef cattle farmers.

Recently, pig farmers have had to address increasing consumer concerns regarding animal welfare. Sow stalls have traditionally been used in pig farming to segregate pregnant sows and confine them to an area roughly the size of the pig. Animal rights groups have argued that these stalls are inhumane because they restrict sows from moving naturally. In response to these concerns, the industry has begun to voluntarily phase out sow stalls. This process is likely to increase costs, which are anticipated to be passed on to consumers. As pork consumption is rising, this is expected to support revenue growth for pig farmers.

Health consciousness among Australian consumers is anticipated to continue rising over the next five years, likely maintaining current meat consumption trends. Despite this boosting revenue for pig farmers and constraining revenue for beef cattle farmers, operators in both industries are forecast to continue growing due to a variety of positive factors.

Related industries:

Pig farming

Beef cattle farming