- This Industry Profile provides an overview of the location, structure and financial performance of Victoria's pig, goat and deer industries.
- The gross value of pig slaughterings across Australia in 2010-11 was $882.5 million.1
- At 30 June 2011 Australia had 2.34 million pigs, with the biggest herds in Queensland (667,000), Victoria (508,000), New South Wales (505,000) and South Australia (389,000)2.
- Deer farms are found in all Australian states, with production concentrated in Victoria, South Australia, New South Wales and Tasmania.
- The total area devoted to specialised deer farming in Victoria during 2008-09 was approximately 7,489.5 hectares holding 18,252 deer.
- Victoria has over 600 agricultural businesses involved in the goat industry, with the majority involved in goat meat production3.
- Victorian goat exports increased from $3.4 million in 1997 to more than $53 million in 2011.
- Australia is the world's largest goat meat exporter despite being a small producer compared with other countries. The United States of America is Australia's major goat meat export market.
Figure 1: Victoria’s pig production regions4
Location of Victoria's pig farms
Victoria's pig farms are concentrated in the Loddon, Goulburn, Wimmera and Mallee regions. Approximately 80 per cent of Victoria's pigs are found in these regions.
Structure of Victoria's other meats industryVictoria's 'Other Meat' industries predominantly involve the production of pigs, goats and deer, with some farming and harvesting of native animal species. The pork and goat industries are the largest in terms of value and volume.
While many of these livestock species are produced by commercial businesses, large numbers – particularly goats, alpacas and pigs – are kept on hobby farms. In 2010, an estimated 6,039 properties had goats, pigs, alpaca or deer5, but only about half of these were commercial operations.
The pork industry is an intensive animal industry and is generally located close to feed and water supplies, and domestic markets.
As of 30 June 2011, Victoria's pig farms carried 508,000 pigs.6 Although pig farm numbers decreased from 613 in 1998 to 366 businesses in 2009, the number of farms with breeding sows and all other pigs increased to 586 in 2010, a rise of 59 per cent. In 2010, there were approximately 415 pig herds in Victoria carrying 53,851 breeding sows.
Although Victorian pig herd sizes are relatively small, they have been growing. In 1975, 97 per cent of pig farms held breeding herds of less than 100 sows and gilts and 0.1 per cent of pig farms held herds of more than 600 sows and gilts. Currently 82.8 percent of breeding sow herds are found on farms with less than 100 sows and 3.6 per cent of breeding herds are found on pig farms with 1,000 or more sows. The large farms account for almost half of the Victorian herd. Pig farms holding less than 100 sows are sometimes referred to as 'opportunistic' producers, with herd sizes fluctuating, depending on prices for pigs relative to other commodities.7
Pig producers tend to also produce other commodities. In 2009 up to 20 per cent of Victorian pig farmers produced barley and 15 per cent produced wheat.
Simultaneously 25 per cent of Victoria's pig farmers also produced sheep and 22 per cent farmed beef cattle. During this time period 5,639 pigs were found on 118 dairy farms.8
Figure 2: Total Victorian Pig Numbers 1969-2011
Source: ABS, Historical Selected Agriculture Commodities, by State (1861 to Present) 2007-08, (Cat no. 7124.0); ABS, Agricultural Commodities, Australia (cat. no. 7121.0); and ABS, Principal Agricultural Commodities, Australia, Preliminary, 2010-11 (cat. No. 7111.0)
Victoria's goat industry is based on broad acre production systems. In 2010, 638 businesses were involved in the production of goats, holding 40,901 head. Around 50 per cent of Victoria’s goat production occurs in the Gippsland, East Gippsland and Goulburn regions. Farms are also located in Barwon and the peri urban regions of outer Melbourne which produce about 28.5 per cent of Victoria's goats.
Victoria's other meat productionThe supply of pig meat in Victoria is influenced by climatic conditions, grain availability and feed prices9, increased imports and the value of the Australian dollar. In 2011, Victoria produced 69,218 tonnes of pork, which was 41.2 per cent lower than the 117,789 tonnes produced in 1998. This decrease has been attributed to increased imports and larger numbers of Victorian pigs being processed by interstate operators due to declining numbers of Victorian abattoirs processing pigs.
However, between 2009 and 2011, the number of pigs slaughtered in Victoria increased by 28.7 per cent, with a corresponding increase of 31.6 per cent in pork meat production.
Victorian pork production in 2011 was 20.1 per cent of the total Australian production of 344,266 tonnes.10 Australia about 50 per cent of pigs are produced by 15 companies with one company (Rivalea Australia) - (formerly QAF Meat Industries) supplying approximately 20 per cent of the domestic market and up to 40 per cent of Australian exports.11 Australia's production is comparatively small in global terms, with international pig meat production of 104.5 million tonnes in 2011.
The Victorian goat meat industry experienced significant growth in the last decade in response to strong export demand. Domestic demand has also increased slightly. The number of goats slaughtered in Victoria increased from 849 in 1996 to approximately 626,797 in 2011 with Victoria also processing a significant amount of rangeland goats from New South Wales and Queensland. Victorian goat meat production in 2011 was 9,951 tonnes (carcase weight), up from 1,100 tonnes in 1998. From 2010 to 2011 Victorian goat meat production and slaughter increased by 9 and 4.7 per cent respectively.
The majority of Australian goat meat production comes from wild (rangeland) goats, in New South Wales and Queensland. In Victoria, most goat meat production comes from specialist meat (Boer goat) producers. Historically, goat production was run in conjunction with sheep and/or cattle, with limited investment in improving infrastructure to manage goats, or upgraded handling facilities.
The Victorian deer industry produces a range of products including felt and meat. However, meat production is limited and most businesses focus on felt production. Deer production has declined in recent years in response to drought and lower farm gate prices for venison and velvet. In summary, deer slaughter in Victoria has fallen from 8,646 in 2007-08 to just 2,246 in 2010-11.12
The last available estimate for the value of production from the 'other livestock' industries, including goats, donkeys, buffaloes, deer, alpaca and horses, in 2009 was $14.1 million at the farm gate.
Figure 3: Australian goat meat production 2011
Source: ABS, Livestock and Meat, Australia, (7218.0.55.001) Series (Unpublished) and Personal Communication with MLA's Blair Brice.
Figure 4: Australian goat slaughterings 2011
Source: ABS Livestock and Meat Series (Unpublished)
Figure 5: Destination of Victorian goat meat exports 2010-11
Source: ABS International Merchandise Export Statistics (Unpublished)
Domestic demand, imports and exports of Victoria's other meat
Domestic interest in meats such as pork, chevron (goat meat) and venison has increased in recent years. This has been linked to changes in the ethnic composition of Australia's population and an expansion in the tastes and preferences of consumers.13
The domestic demand and international supply of goat and pig meat are influenced by various factors such as pig and goat meat availability, grain prices, the relative prices of other meats (such as mutton), and seasonal conditions. In the pork industry, the most recent drivers of supply and demand have been fluctuating world grain prices, changing sow herd sizes, herd productivity and domestic consumption of fresh pork.14
Although Australians have increased their per capita consumption of pork over a number of years, imported processed pork products have taken an increasing share of the Australian pork market. The increased volumes of processed pork imports from Europe and North America have imposed cost price pressures on farm gate returns in Victoria.15 Pork consumption in Australia increased from 21.3 kilograms per capita carcase weight in 2002-03 to 24.1 kilograms per capita carcase weight in 2010-11.16
Victoria imports a significant amount of frozen pork legs from Canada and the U.S. and frozen pork middles from Denmark for processing and it is estimated that around 70 to 80 per cent of ham and bacon consumed in Australia is made from imported pig meat. This equates to around 2.6 million kilograms of frozen pork coming into the country every week, worth approximately $10 million. As a result the Victorian pork industry is increasingly focused on the production of fresh pork for the domestic market. Fresh pork consumption grew by 37 per cent between 2006 and 2011. All fresh pork in supermarkets and butchers is Australian grown.The Moving Annual Total (MAT) volume of pork exports from Victoria in March 2012 was approximately 8,600 tonnes shipped weight (SW)17 a decline of 9.5 per cent compared with March 2003 when MAT exports were 9,504 tonnes SW. Over the same time period, the MAT volume of pork imports into Victoria has increased from approximately 9,268 tonnes SW to 55,615 tonnes SW, an increase of 500 per cent in less than 10 years. Although imports have increased significantly over the past decade, imports since August 2010 have increased by only 4.9 per cent mainly due to an oversupply of local pigs and a fall in prices.
Figure 6: Pork (moving annual total) – Import and Export volumes - Victoria
The goat meat industry of Victoria is currently experiencing unprecedented growth with strong demand in many overseas markets. In 2010-11 the industry exported 10,758 tonnes worth $49.95 million, mainly in the form of whole carcases. The key export markets for goat meat in 2010-11 were the US (48 per cent), Trinidad and Tobago (11 per cent) Canada (10 per cent), and Jamaica (5 per cent).18
Despite the high Australian dollar over the past year, the US market for goat meat has remained strong with demand increasing over the past three years.
Australian goat meat and live goat exports were worth approximately $136.3 million during the calendar year 2011. In that year 63,663 live goats were exported, worth approximately $8.5 million - a decrease of 17.7 per cent from the 77,414 goats exported in 2011.19 Of the 63,663 live goats exported, Victoria supplied 22.6 per cent or 14,390 goats worth $945,730, with most being air freighted out of Melbourne.
With the exceptions of the pig and deer industries, the 'other meat' industries face little competition from imports mainly due to quarantine restrictions on livestock products and low demand for these products.
Historically pig prices increase in the lead up to Christmas and decline during winter. Un-seasonal increases in pig prices usually occur when domestic consumption increases and total supply (including imports) is limited.
One of the major factors affecting the profitability of Victorian piggeries is the price of feed, which is predominantly made up of grain and which accounts for approximately 80 per cent of total feed cost. Grain prices account for around 60-65 per cent of the total cost of production. However, during drought or when international grain prices are high, this can move to 70 per cent. Historically when the price of feed in Australia is high, farmers produce less pig meat and imports increase.
Monthly average feed grain prices have remained competitive over the last six months with prices for feed wheat and barley fluctuating between $180 and $230 per tonne. The combination of consistent selling prices with smaller seasonal fluctuations and competitive feed prices has helped to underpin good producer margins amongst many pork producers in the state.
The Eastern States price for over the hooks 12.1 - 16 kilogram and above goat carcases averaged around 228c/kg cwt and reached a high of 240c/kg cwt in the week ending 1 June 2012.20
Over the past year, ample supply, high storage stocks, low market demand from key export markets such as Canada and Jamaica, and the high and volatile Australian dollar, have resulted in a gradual decline in prices for most of the year.
Total factor productivity
No total factor productivity data exists for the industries discussed in this industry profile.
Employment on Victoria's pig and goat farms
The last census of population and housing shows that in 2006, the number of Victorians employed on pig farms, deer farms and farms producing 'other livestock' were approximately 1,115 persons. Of those, 818 were employed in the pig farming industry.19 Employment in the pig industry has averaged around 3 per cent of the total workforce where it is most concentrated.22
Financial performance of other meats
The small size of the pig and goat industries in Victoria relative to the rest of the world, mean they are influenced strongly by international markets and prices. Local seasonal conditions also impact on their financial performance. As such, their financial performance depends on their ability to keep costs down and increase revenues.
The financial performance of the Victorian pig industry for much of the last decade has been affected by competition with processed pork imports from North America and Europe, increased domestic feed costs, drought conditions and a volatile Australian dollar. This led to a reduction in the size of the industry as producers left the industry.23
Although profitability in the pig industry declined during the early months of the 2010-11 financial year, industry profitability has improved over the rest of the year. Profitability has increased due to more competitive feed grain prices, and marginally improved porker and baconer prices
Government policy/regulation influences
The Department of Primary Industries' (DPI) main role in the pig industry in Victoria is disease surveillance which involves screening of herds for emergency animal diseases such as foot and mouth disease.
The practical aspects of this role are carried out primarily by DPI's Animal Health Field Services staff in Biosecurity Victoria. Field Services activities are supported by the Pig Health and Research Unit (PH&R), which provides diagnostic services and emergency responses. The PH&R Unit also provides specialist training to DPI Animal Health Field Services staff and pig industry employees to enhance the capability of DPI staff and industry employees on pig husbandry, welfare and management and to provide monitoring of endemic disease and passive surveillance for emergency animal diseases.
The PH&R Unit currently employs five full time equivalent staff and is based in Bendigo
Pig and goat farms are required to comply with a range of policies relating to food safety, animal welfare, biosecurity and the environment – for example, the various codes governing the accepted farming practices for the welfare of goats and pigs, the welfare of animals during transportation and the Prevention of Cruelty to Animals Act 1986.
New piggeries or substantial modifications to existing piggeries should comply with the Code of Practice – Piggeries.
All owners of livestock, including pigs, goats and deer in Victoria must register their property with DPI to receive a Property Identification Code (PIC).
1 ABS, Value of Principle Agricultural Commodities Produced, Australia, Preliminary, 2010-11 (Cat. No. 7501.0)
2ABS, Principal Agricultural Commodities, Australia, Preliminary, 2010-11 (Cat. No. 7111.0)
3ABS, Agricultural Commodities Australia, 2009-10 (Cat. No. 71210DO002)
4Australian Bureau of Statistics: Based on 2006 Mesh Block Boundaries. Number of pigs sourced from the 2006 Agricultural Census. This map was produced using coordinate system: Lat/Long GDA94, © Commonwealth of Australia, 2010.
5Animal Health in Victoria, 2010, DPI March 2011, p. 61.
6ABS, Principal Agricultural Commodities, Australia, Preliminary, 2010-11 (Cat. No. 7111.0)
7Productivity Commission 2008, Safeguards Inquiry into the Import of Pigmeat, Report no.44, Canberra, March.
8ABS, Agricultural Survey, agricultural Commodities by Australia, State/Territory and SD Estimates, 2008-09 (Cat. No. 7121.0) Unpublished data.
9Productivity Commission 2008, Safeguards Inquiry into the Import of Pigmeat, Report no.44, Canberra, March.
10ABS, Livestock and Meat, Australia, March 2012 (7218.0.55.001)
11The Australian Pork Industry: Understanding climate change impacts, Jackie Leuthi, Kathleen Plowman, Owen Cameron, Siwan Lovett, Timothy Flor, Land and Water. Australia, Australian Government, July 2009.
12National President’s Report 2010-11, Australian Deer Farming Magazine, The Deer Industry Association of Australia, February 2012.
13RIRDC, 2009, Emerging Animal and Plant Industries — Their value to Australia (Second edition).
14A snapshot of the Australian pig industry during 2005/06 David Dowling, Marketing Analyst, Australian Pork Limited (http://www.agrifood.info/connections/2006/Dowling. html) viewed 3/6/10 and Australian Pork Limited Submission to Productivity Commission Inquiry into Rural Research and Development Corporations 30 June 2010.
15Inquiry into Australia's Relationship with ASEAN, Foreign Affairs Sub-committee Joint Standing Committee on Foreign Affairs, Defence and Trade. APL, 2009.
16Meat and Livestock Australia Statistical Review Various Issues and Australian Pork Limited unpublished data.
17Shipped weight – is the actual weight of meat when it is loaded for shipment (including bones if they haven't been removed).
18Export statistics supplied by Australian Customs.
19Export statistics supplied by Australian Customs.
20Meat and Livestock Australia, Goats on the Move market report, 31 May 2012.
21ABS Census Data, (Cat. No.2604.0 – CDATA Online), Australian Bureau of Statistics.
22Economic assessment of the effects of pig meat imports on the Australian Industry, ABARE 04.15, 2004.
23Productivity Commission 2008, Safeguards Inquiry into the Import of Pigmeat, Report no.44, Canberra, March.