Australia / Analyst Insights
Pig farmers are shifting focus to beat cheap imports

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by Brooke Tonkin
Jul 06 2016

Although the beef cattle farming industry has enjoyed strong revenue growth and widespread media attention over the past five years, few have noticed the pig farming industry. Over the past five years, the pig farming industry has, in fact, quietly outperformed the beef cattle farming industry in terms of revenue growth. Over the period, mounting competition from imports has forced pig farmers to alter production to survive. These changes have revived the industry, with production volumes and average pig meat prices rising strongly over the period.

Pig farmers typically focus on either porker production, which is raising pigs for fresh meat, or baconer production, which is raising pigs for processed meats such as bacon and smallgoods. Meat from these two types of production have a distinct price difference, due to competition from imported meats. Due to health regulations, only processed pig meats can be imported into Australia. This means that baconer farmers face more competition than their porker farmer counterparts.

Australian pig farmers have faced intense competition from imported pig meat over the past decade. Many other nations subsidise pig production, which artificially lowers their production costs. This makes Australian processed pig meat uncompetitive in price terms compared with imported pig meats from these countries. This has encouraged Australian pig farmers to become porker producers, which allows them to achieve higher prices for their livestock. At the same time, pig meat consumption has increased, with fresh pork consumption growing at a faster rate than processed pig meat consumption.

In response to increasing consumer concerns about the treatment of livestock, Australian pig farmers have agreed to phase out sow stall production by 2017. With this deadline fast approaching, pig farmers have been forced to invest in new farming layouts and facilities, replacing stalls with open pens that give pigs room to roam. This conversion requires substantial capital investment, and has further encouraged pig farmers to shift towards higher value porker production over the past five years.

The increasing shift towards porker production is anticipated to contribute to strong growth over the five years through 2015-16. In comparison, the beef cattle farming industry, which has been an agricultural powerhouse over the past five years, is forecast to grow at a slower rate.

Pig farmers are expected to continue reaping the benefits of shifting production over the next five years.  Per capita domestic pig meat consumption is forecast to grow modestly over the period, with fresh pork continuing to expand its share of total pig meat consumed. However, growth opportunities in export markets will be limited, due to ongoing subsidisation in many countries. This is expected to cause revenue growth for the pig farming industry to slow slightly over the next five years.


Relevant industries:

Pig Farming

Beef Cattle Farming