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Pork

GVP $236 million est. Down 4% yoy.
Production for 2020-21 increased 2.9% to 65 thousand tonnes (cwt).^w
Pork exports decreased 7% in volume terms to 6,127 tonnes (swt).^x

Production for 2020-21 increased 2.9% year-on-year to 64,700 thousand tonnes (cwt)^w from 880,800 head slaughtered, a 4.6% increase over 2019-20. Production was moderated by a 1.6% decrease in average carcase weight over the previous year, to 73.4 kg/head. Feed grain prices eased 17% in 2020-21 from the previous year’s drought impacted grain crop, with feed inputs the major cost for pig producers. Prices for porkers and baconers averaged 6% and 8% lower respectively in 2020-21 than on the previous year, while competitive retail prices for pork compared to beef and sheep meat supported domestic consumption. Consequently, the gross value of the industry is expected to be 4% lower year-on-year to be valued at $236 million in 2020-21.

African Swine Fever (ASF) remains a key factor in global pork and animal protein markets. China’s herd rebuilding from the ASF pandemic is continuing but with some volatile market impacts in China as new regional outbreaks are identified and managed. While global pork production is expected to increase 9% in 2021 compared to the previous year, production remains 7% lower than the pre-ASF production of 2018 and is limiting any price decreases that would otherwise be anticipated from increased supply. However, in the medium term, as global supply of pork continues to build this is expected to cap pork prices.

Domestically, improved grain growing conditions in Australia will continue to moderate feed costs for producers compared with the previous drought years. While domestic demand for pork products is further supported by the comparative price advantage of pork over beef and sheep meat in the retail market.

A new line of defence to protect the pork industry from fatal disease

Minister for Agriculture Adam Marshall has unveiled a new suite of tools to help safeguard the pork industry from the devastating threats posed by African Swine Fever (ASF).

Mr Marshall said after collaboration between government and industry, the state’s pig producers – large and small-scale – would now have access to a comprehensive toolkit to help with biosecurity practices, crisis planning and record keeping.

“This initiative used social research to better understand biosecurity planning and how we can help implement low-cost but effective strategies,” Mr Marshall said.

“African Swine Fever has a near 100 per cent mortality rate in infected pigs, with no vaccine available. If it reached our shores, an outbreak would decimate our $2 billion industry".

Media release

NSW Government infographic - Protect your pigs from pests and disease

International Engagement and Australian Pork Limited – First Collaboration in Export/Market Development

NSW DPI’s International Engagement team worked with Australian Pork Limited (APL) to support their export development, providing market, consumer and industry intelligence and network. The first collaborative webinar specifically targeting the Japanese market was held on Wednesday 23 June 2021, in cooperation with an Agriculture Counsellor in Tokyo.

The webinar assisted industry’s future market development strategies, by providing APL and their members with an opportunity to better understand a competitive and complicated environment in the Japanese market, including the Gate Price System under the CP TPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Australia takes part in with Japan.

Production

Production for 2020-21 increased by 2.9% over the previous year to reach 64,700 thousand tonnes (cwt)^w. While the number of pigs slaughtered increased 4.6% year-on-year to 880,800 head in 2020-21. At the same time, an average lighter carcase weight of 73.4 kg /head in 2020-21, 1.6% lower than the prior year, accounts for the overall smaller increase total tonnes produced in 2020-21.²⁰

The size of the sow herd had decreased to 48,834 head in 2019-20, marginally lower by 1.5% than in 2018-19, consistent with the national trend in sow herd slaughter.²⁵ ³⁵ The majority of commercial production continues to consolidate in the central and southern parts of the state, with Murray, Riverina and Capital regions accounting for 58%, 15% and 18% of total pig numbers respectively in 2019-20.¹⁸

Feed costs, the major production cost for producers, have generally decreased during 2020-21 with the drought conditions for eastern Australia easing. Feed grain prices for 2020-21 averaged 17% lower than in 2019-20.⁸² However, continued low Australian carcase weights, a response to domestic retailer demand, and which are typically 20-25% lower than comparable production systems in other countries, effectively increases the cost of production for producers relative to international peers.⁵⁷

Price

Producer prices for pigs in 2020-21, based on the average eastern porker and baconer slaughter prices, declined year-on-year by 6% and 8%.³⁶ The additional supply of pork in 2020-21, along with some abattoir capacity disruptions, contributed to an easing of domestic pig prices ³⁸, however these prices remain above the recent cycle low experienced in 2017-18 which was associated with a cyclical peak in pig production.

Domestic consumption of pork products has been supported by stable consumer prices, with the consumer price index for pork decreasing marginally by -0.4% between June 2020 to June 2021. This followed increased prices during 2020 in response to high global meat prices as African Swine Fever and the Covid-19 pandemic caused major disruptions to animal protein supply and consumer demand. Price moderation during 2020-21 and especially relative to other red meats, has resulted in pork being price competitive against other animal proteins. For example, over 2020-21 the consumer price index for beef increased by 14% to June 2021 while consumer price index for poultry meat increased marginally by just under 1% over 2020-21.¹⁹

Consumption of pork was estimated to be stable at 27.7 kg (cwt)^w per capita in 2020-21 from the previous year and down marginally by 3% since 2018-19. In contrast higher prices for beef and sheep meat over recent years has contributed to domestic consumption per capita for these meats decreasing by 13% each since 2018-19.¹⁰

Pig production and prices

Pig production ('000 head)
Monthly Average Porker (Eastern)
Monthly Average Baconer (Eastern)

Download data (.XLSX)

Source: APL (2021) , ABARES (2021)

Trade

Pork exports decreased by 7% in volume terms to 6,127 tonnes.^x Similarly, the value of pork exports, totalling $21.5 million in 2020-21, represented a decrease of 7.6% from the previous year. Major export markets included Singapore, New Zealand and Vietnam. The value of exports to Singapore, a traditionally higher value product market for pork exports, increased by 20% year-on-year to $8.8 million despite volumes actually decreasing by 9.3% to 1,352 tonnes.¹²⁸ Exports were influenced by the ongoing covid pandemic impacts on trade and consumer consumption patterns, while the stronger Australian dollar in 2020-21, which averaged 0.747 ($A:$US) compared to an average value of 0.671 ($A:$US) in 2019-20, also influenced the competitiveness of Australian pork exports.²²¹

Nationally, Australian imports of pork products decreased by 21% in value terms in 2020-21 compared to 2019-20 and by 19% in volume terms. Pork products valued at $174.5 million were imported in 2020-21 to New South Wales, a decrease of 24% by value compared to the previous year. Similarly, the quantity of pork imports decreased by 20% in 2020-21 to 36,891 tonnes ^x, compared to 2019-20. Denmark, the major source of pork imports in value terms, totalled $57.8 million in 2020-21 representing a decrease of 10% year-on-year and in volume terms decreased by 13%. Imports from United States the largest source of imports by volume since 2019, decreased by 23% to 14,377 tonnes ^x, representing a decrease of 35% in volume terms. Similarly imports from the Netherlands during 2020-21 decreased substantially by 42% in value terms, compared with 2019-20.¹²⁸

Value

Volume

Pork export markets by value & volume, 2020-21

Singapore
New Zealand
Vietnam
South
Rest of World

Download data (.XLSX)

Source: GTA (2021)

Pork export markets by value & volume, 2020-21

Singapore
New Zealand
Vietnam
South
Rest of World

Download data (.XLSX)

Source: GTA (2021)

Value

Volume

Pork imports by value & volume, 2020-21

Denmark
United States
Netherlands
Ireland
Rest of World

Download data (.XLSX)

Source: GTA (2021)

Pork imports by value & volume, 2020-21

Denmark
United States
Netherlands
Ireland
Rest of World

Download data (.XLSX)

Source: GTA (2021)

Macroeconomic Conditions

While fresh pork cannot be imported under national biosecurity rules, global pork and animal protein markets impact Australian pork markets through competition from imported prepared pork products, as well as the broader impact on animal protein prices. Global animal protein markets continue to recover from the impact of ASF in China, other Asian countries, and some key European countries such as Germany.¹⁵³ ⁷¹

China, as the major producer and consumer of pork and significantly impacted by ASF over the last two years, appears to be emerging from the outbreak with expectations of a continued recovery in the national pig herd. However the recovery in the Chinese pig industry in the first half of 2021 has suffered some setbacks, with new outbreaks of ASF in some regions. This has resulted in rapid selling of pigs from affected regions and oversupply, resulting in significant price decreases, in the order of up to 65% in Chinese live pig prices since January 2021.²¹²

Despite these challenges, global pork production is expected to increase 9% in 2021 compared to the previous year. However, this level of production remains 7% lower than the pre-ASF production of 2018 210 and so generally supportive of pork prices. It is expected though, that as global supply of pork returns to pre-ASF levels supply will constrain pork prices.¹⁷³

Outlook

For pig producers, improved grain growing conditions in eastern Australia are anticipated to moderate feed costs compared with the prices experienced by producers during the recent extended drought. At the same time the comparative price advantage over beef and sheep meat in the domestic market will support demand for pork.³⁷ However, while the price advantage over beef and sheep meat in the domestic market supports underlying demand for pork, consumption per capita remains relatively stable. Therefore, increases in domestic production of fresh pork combined with relatively small export markets, potentially limit producer price increase.

Global pork markets will continue to be influenced by China as the major producer and consumer of pork. With China’s sow herd rebuild resulting in increasing domestic supply, their demand for pork imports will contract. Consequently, global pork prices would be expected to ease and lead on to a reduction in supply amongst pork producing countries, typical of pork price cycle behaviour.