annual report 09/10 - Apri.com.au

Pork CRC LimitedCEO’s reportWith prices remaining at sustainable levels andfeed costs at or just above longer term trendlevels for the first three quarters, producersachieved reasonable margins in 2009-10.However, marked increases in the levels ofimported pork and increased domestic supplycombined to reduce prices and producermargins in the last three to four months of theyear. Margins will remain vulnerable to furtherincreases in imported pork, increasing domesticsupply and volatility in global grains markets.Globally, the situation was not as positive,with the majority of pork producing countriesexperiencing continued losses and, in the caseof Canada and the USA, large losses, duemainly to oversupply of pig meat. Prices in bothcountries, but especially in the USA, exhibitedstrong improvement late in 2009-2010 and arepredicted to reach near record levels throughthe first and second quarters of 2010-2011.Domestic demand for pork in the USA (andAustralia) remains flat and improvements inprice experienced in Australia in the last 18months and in the USA more recently, havebeen largely due to a decline in the supply ofpork. However, the USA situation has beenassisted by their impressive export effortswhich, in the last two years, have exceeded 2billion kg annually, or 16-18% of production.In the longer term, the profitability of theAustralian pork industry will depend on betterunderstanding the sensitivity of price toseemingly small changes in supply, increasingdemand and continuing to produce porkefficiently and sustainably. The Pork CRCprograms are designed to reduce the cost ofproduction and enhance productive efficiency.Program 3 also aims to increase demand bydefining and promoting the natural humanhealth attributes of Australian pork.Grain supply and costs are likely to remainunstable and developing alternative feedstuffs,specific feed grains and improving feedefficiency will continue to be central to thelonger term viability of the Australian porkindustry.The Pork CRC programs and projects in thefeed grain and feed efficiency areas have hadsome important commercial and researchoutcomes during the reporting period.From Program 1 (grains) the new triticale,Berkshire, which was released last year,performed well in producer-grower systemsin NSW, Victoria and WA and will be grownin closed loop systems this season. The fieldpea, Maki continues to yield well and a numberof new pea varieties with even higher yieldpotential will be released this year.4