Australian Pork Newspaper

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Vol 22. No. 8 August 2018 Australian Pork Newspaper PO Box 387 Cleveland 4163 Phone (07) 3286 1833 Fax (07) 3821 2637 Email ben@porknews.com.au
What the statistics tell us
WE all know why we have low pig prices at present – because we have way too many pigs in the market com- pared to how many the market needs.
But how did this come about and are there any clues looking backwards as to what led to this situation?
In this article, I’m go- ing to use the data we have to explain what I think happened leading up to our present pricing predicament.
If you’re not into numbers, you’re prob- ably not going to enjoy it much, but I know a lot of pig farmers are into numbers, so here goes.
Demand growth in the retail sector is the easi- est for us to measure, soittendstobehowwe report demand.
Figure 1 shows demand for a four-week period expressed as a percent- age of the demand for the same four-week pe-
Point of View
by ANDREW SPENCER CEO
riod a year earlier. Therefore, whenever
it was above 0 percent, pork demand grew for that four-week period.
It has also been cor- rected to ignore infla- tion and population growth.
As you can see, most of it is above 0 percent for most of the time be- cause demand for pork has been growing very healthily.
The graph shows a particular period of very strong demand growth between January 2014
and September 2015 – probably averaging be- tween 7 and 8 percent.
Figure 2 shows what would seem to be the consequence of this sus- tained period of strong demand growth.
In August 2015 – about 18 months after the high demand growth period referred to commenced – we see farm gate pig prices turn sharply up- wards.
These are the reported weighted average buyer prices for pigs of 60-
☛ continued P3
Figure 2 – Demand growth and farm gate pig price averages.
Figure 1 – Demand growth.
Country of origin labelling – what has been done?
COUNTRY of origin labelling is now manda- tory and many people have raised questions as to what the industry has done and is doing.
The short answer is we are working on getting broader distribution for Australian pork and not yet investing in CoOL.
This is because we be- lieve the public is not yet aware enough of the changes, as there has been no 2018 education adver- tising campaign from gov- ernment.
We are monitoring awareness (we will re- search in September), but spending producers’ money on educating about CoOL is unlikely to generate as
many Australian pork sales as advertising nutrition and versatility in fresh pork.
Right now, increasing pork sales and having dia- logue with our producers are our top two priorities. What did Australian Pork Limited do to prepare for country of origin labelling? Pre-July 2016
Australian Pork Limited Policy team worked to try to ensure the Govern- ment’s proposed CoOL requirements would deal with the issues important to our industry.
The treatment of brine and the use of the kanga- roo logo on imported ham and bacon did not get over the line.
That said, the new CoOL was extended to cover deli cabinet products, which was previously an omis- sion.
October 2017
APL Policy team cre- ated a tool to help produc- ers and butchers calculate CoOL requirements for each product.
November 8, 2017
The Pig Industry Mar- keting Committee agreed the CoOL program ought to be ready to start rolling out retailer communica- tions in March 2018 to en- sure all collaborators are ready by July 2018. February 9, 2018
APL representatives met with Australian Made, Australian Grown who
confirmed the ACCC will take over logo manage- ment and compliance do- mestically.
They also mentioned there was no budgeted government education campaign.
February 13, 2018
Pig Industry Marketing Committee asked APL to
develop consumer mes- saging.
This group also agreed APL should use public rela- tions and media interviews to support CoOL, as APL funding an Australian con- sumer education program was not the best return on investment to producers.
☛ continued P4
Marketing Matters
by PETER HAYDON General Manager Marketing
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