In 2017 Australian producers are due to phase out sow stalls for all but a maximum of six weeks of gestation. This change has been accepted by the industry, although there is concern about the costs.
But in recent months, several events make it likely that the phase-out could be completed by as early as 2014. First, one state – Tasmania – announced in June that it would be legislating to phase out stalls by 2014. Then in August, Coles, one of the country’s major retailers, announced that it would also require its producer suppliers of fresh pork to phase out stalls by 2014.
The high percentage of processed pork products that comes from overseas will be exempt from this requirement, but the activities of state producer organizations and industry representative body Australian Pork Limited (APL) suggest they are intensifying their fight to promote home-produced pork and combat a rising tide of imports.
It is reminiscent of the battle the U. K. has had since that country unilaterally banned sow stalls from 1999, which, along with a number of other factors, resulted in its industry being decimated. If the Australian industry is successful in mobilizing support for home-produced products from its consumers on the basis of its higher welfare standards, then imports from North America could be seriously affected.
Like their British counterparts, Australian producers are clearly wary of any changes that will increase their already high production costs. But, to add insult to injury, they see a huge share of their domestic market taken by countries with a lower cost of production, notably the U. S. and Canada. Denmark, the other large importer of pork products to Australia, can easily supply from farms with group sow housing.
Australia’s 300,000 sows produce 329,000 tonnes of pork per year, but over 50 per cent of domestic consumption – all processed products, is imported.
In the first half of 2010, the U. S. exported 27,000 tonnes of products to Australia, while Canada exports around 40,000 tonnes per year. During the last couple of years, the high value of the Australian dollar has stimulated an increase in imports. Despite producers currently receiving about A$3 (C$2.87) per kilo carcass weight, high production costs (mainly due to expensive feed) and moderate efficiency levels are a handicap, which has resulted in a decline in sow numbers over recent years.
Producers are incensed that Coles will not require the countries that provide Australia with 70 per cent of its processed pork, such as bacon and ham, to meet their new standards. They are asking Coles to apply its policy to all pork – fresh and processed, local and imported. “Coles’ policy favours overseas producers whose animal welfare practices are almost certainly at a lower level. This is not a level playing field for Aussie farmers,” said APL CEO, Andrew Spencer. “It’s very simple,” he adds. “Bacon, ham and fresh pork all come from the same pig. If Coles believes this move is about animal welfare, then they should ensure the same standards apply for all their suppliers, which includes overseas pig producers.”
Like the U. K. and other countries with low self-sufficiency in pork production, Australia is very sensitive about the impact of imported pork on its industry and has intensified its offensive against foreign product. Again, as in the U. K., the battle is focusing on clear country of origin labelling.
“Australian consumers are being misled through the lack of accurate country of origin labelling,” says Andrew Spencer. “At least 70 per cent of ham and bacon products consumed in Australia are made from overseas pork that is processed in Australia. By labelling these as ‘Product of Australia,’ ‘Made in Australia’ and ‘Made from imported and local ingredients,” consumers have no idea where the pork originates from.”
APL is getting more aggressive in its fight to win over domestic consumers, with a number of initiatives, including Australian Ham week in July. With its own Quality Assurance program, coupled with a quality mark – the pink Australian “PorkMark” – it is highlighting the benefits of home produced products.
What might be the implications for importers of this increasingly hard-fought battle by the Australian industry? If APL is effective in influencing consumers, it could, as it hopes, increase demand for domestic product. It could also be successful in bringing about changes to labelling legislation, making it easier for consumers to identify home-produced product. As the industry moves more and more towards group housing, it is certain to highlight its welfare credentials much more actively. Also, once one retailer has moved to eliminate stalls (in order to create a competitive advantage), it is highly likely that its competitors will follow the same direction.
If imports had to be produced in the same way as domestic product, the ability of Canada to supply significant amounts of pork from farms using group sow housing would be extremely limited as the industry has very little group housing. However, some of the large U. S. integrators such as Smithfield and Cargill, who already have substantial production capacity using group housing, could likely supply sufficient product to the required standard.
Whether the Australian industry’s ambitions will be realized in time remains to be seen, but recent events suggest that the battle is on and there could eventually be repercussions for the Canadian pork industry.
AUSTRALIAN PORK LIMITED