SECRETS TO SUCCESS -AUSTRALIA Continue to enhance efficiency of production and address grain volatility Take lead in the welfare issue and use to differentiate Australian production and product (have retail ,community and consumer support) – reduce imports Improve quality of product –demand Tap into higher end Asian markets Better understand feed costs (go way beyond cost of grain) Cost plus supply contracts
2011 Big harvest and weather damaged grain in 2010-2011.Feed cost will average $320-$360/tonne and vary across states Price is less predictable but could return towards longer term average - $2.50/kg over 2011. COP $2.26 to $ 2.32/kg. Margin $ 0.18 to $ 0.24/kg carcass weight ($13 to $17.50/pig) with little room for mistake.
SECRETS TO SUCCESS -GLOBAL Continue to enhance efficiency of production and actively address likelihood of increasing and volatile feed costs Exploit growing global demand for pork and cost advantages – more exports and better understanding global customer demands Develop risk polices and other means of ensuring export markets are maintained Be aware of growing welfare and environmental concerns – they are likely to affect all countries directly and indirectly Cost plus supply contracts
2011-GLOBAL Europe likely to remain under pressure on prices and grain/feed costs but the global price cycle is currently on an upward trend . USA and Canada looking at reasonable but tighter margins than 2010 with price being affected by exports and domestic supply – but futures are positive. Likely to be a slight further global consolidation of pork industries in 2011 Many unknowns remain with grain prices likely to remain volatile and domestic demand in Europe and N America (globally ) remaining flat
Beyond Technology? At an industry level need to ensure plans in place to address ‘emergency” situations (HIV2,food contamination etc) and prevent or minimise consequent price declines Attempt to get ahead of social and welfare issues likely to affect community and consumer perceptions of the industry and demand for pork ( sow housing , pig management , environmental issues, general welfare) –innovation lacking and sorely needed needed. The issue in Australia and offers real opportunities – don’t get caught out. Innovation in product quality and variety –increase demand. What do national and international consumers want?