Australia's pig farming and pork industry have experienced some tough conditions over the past five years.
On the other hand, strong meat prices have been a feature of the past 12 months as pork has benefitted from higher meat prices generally and in particular the flow on of high beef prices.
According to the latest pig farming report by IBISWorld, the industry has had to contend with cheap imported pig meat and rising costs of production.
Despite previous difficulties there are a number of indicators that show the potential for industry growth in coming years.
A major acquisition of one of Australia's biggest meat players was the first indicator that change is underway.
Brazil's JBS buys Primo Smallgoods
In November 2014 the Australian arm of Brazilian meat processing giant JBS acquired Primo Smallgoods for AUD$1.45 billion.
Primo Smallgoods not only includes the Primo brand but the Hans Continental Smallgoods and Beehive brands. The Company is Australia's largest producer of ham, bacon and smallgoods. Primo Smallgoods' operations include five processing plants operating across Australia as well as New Zealand, employing more than 4,000 people.
AUD$1bn revenue business
As reported by IBISWorld the Australian pig farming industry is worth $AUD$1 billion in revenue annually. Between 2010 – 2015 it experienced an average 1.4 per cent annual industry growth and it currently employs 2, 680 people. There are 532 businesses within the industry.
IBISWorld states that porker production and rising pig slaughtering have allowed for industry revenue to grow in the past few years. Over the ten years through to 2019 – 20 it is predicted that the industry's overall contribution to the economy (its "industry value added" or IVA) will have grown by 1.2 per cent annually. Comparatively, Australia's Gross Domestic Product (GDP) is expected to expand by 2.7 per cent annually over the same period. According to IBISWorld this typically means the industry is shrinking as a share of the national economy but is continuing to expand production.
Potential growth from a low base
Compared to much of the of the world, there is room for Australia's pig farming and pork industry to improve its efficiencies. As recently reported by PigProgress, Australia's pig farm productivity is at the lower end of the scale globally with approximately 20 pigs per sow in 2014.
Comparatively, in the US and Canada there was approximately 24 pigs per sow and in Europe, 26 - 27.
Australia's taste for pork
According to Australian Pork Australians already currently eat approximately 24.2 kg of pork per person annually. This consists of up to 9.2kg of fresh pork and 15kg of processed products (which includes bacon, ham and smallgoods).
Australian Pork: other important numbers ?
Australia produces approximately 360, 000 tonnes of pig meat every year A little over 8 per cent is exported overseas to countries including Singapore, New Zealand and Hong Kong During 2013-14, pork products accounted for around 10 per cent of Australia's total fresh meat retail consumption
Potential areas for growth
Exports to Asian markets Domestic pork consumption is growing Pork farming yields will increase.
