Cooperative Research Centre for an Internationally Competitive Pork Industry

1
Cooperative Research Centre for an
Internationally Competitive Pork Industry

• Investing in Australias industrial, commercial
  and economic growth

Dr Roger Campbell CEO Pork CRC
2
Summary

• Status of the Pork CRC
• Board focus Outcomes for the pork industry
• Industrial, commercial and economic benefits of
  the Pork CRC

3
Pork CRC Update

• Successfully funded November, 2004
• Pork CRC launched October 18, 2005
• Commonwealth agreement signed and funds available
  November, 2005

4
Core program areas

• More reliable and consistent protein and energy
  supply
• Herd feed conversion efficiency
• Functional pork products
• Education and training

5
Pork CRC evolution
Industry driven
6
Core Participants
Supporting Participants
Grainsearch Pty Ltd
WAAPC Pork Producers Committee
Bartlett Grains Pty Ltd
Australasian Pig Science Association
Massey University, NZ
7
Very significant end-user involvement

• 3 core end-user participants accounting for 30
  of production and 47 of exports
• RD will be a partnership between end-users (69
  FTEs) and public sector providers (143 FTEs)
• Research programmes industry led
• 2 core participants are peak bodies representing
  all producers
• End-users have majority representation on the
  Board

8
Pork CRC Management

• Dr Roger Campbell (CEO)
• Mr Michael Crowley (Finance and Business Manager)
• Mr Khalil Jamahl (Office Manager)
• Based at University of Adelaide, Roseworthy Campus

9
Pork CRC Ltd Board

• Dr John Keniry (Chair)
• Dr Robert van Barneveld (CHM)
• Mr Enzo Allara (APL)
• Mr Rod Hamann (APF)
• Prof Andris Stelbovics (Murdoch)
• Prof Shaun McColl (U of Adel.)
• Mr Angus Davidson (NZPIB)
• 2 x Specialist Directors

10
Pork CRC Structure
Pork CRC Ltd Board
Members

• RD Subcommittee
• Audit Committee
• Education Subcommittee
• Commercialisation Subcommittee

Chief Executive Officer
Office Manager
Finance and Business Manager
Project Manager
Program Leaders
Subprogram Leaders
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RD Sub-Committee

• Dr Roger Campbell (chair)
• Dr Rob van Barneveld
• Dr Rod Hamann
• Dr Brian Luxford
• Dr Mike Taverner
• Professor Frank Dunshea
• Dr Ian Johnson
• Mr David Henman

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Program Managers

• Program1 Dr Mike Taverner
• Program 2 Professor Frank Dunshea
• Program 3 -David Henman
• Program 4 Dr Ian Johnson

13
Sub-program managers
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81.4 million in funding
15
Vision
A Cooperative Research Centre to enhance the
INTERNATIONAL COMPETITIVENESS of the Australian
pork industry by providing and adopting NEW and
NOVEL technologies that

• Reduce FEED COSTS
• Improve HERD FEED CONVERSION EFFICIENCY, and
• Enhance the capacity to COST-EFFECTIVELY produce
  HEALTHY PORK PRODUCTS targeted at niche markets
  in Australia and overseas

16
Core program areas

• More reliable and consistent protein and energy
  supply
• Herd feed conversion efficiency
• Functional pork products
• Education and training

17
Research Investment Process

• Pork CRC Ltd is a company with clear corporate
  objectives
• Not a public sector funding body
• Outcomes must be achieved research will be
  commissioned to achieve these outcomes as
  efficiently as possible

18
Program Funding
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To reduce feed costs

• Dedicated feed grains (barley, triticale)
• Local supply
• Less variability in price and supply
• Enhanced utilisation
• Greater capacity to measure nutrient content
• Wider choice of ingredients (legumes, co-products)

20
Subprogram 1a Innovative grain production

• Commercial quantities of cereals that can grow
  closer to pig producing regions, that have a high
  yield, cost-effective agronomy and acceptable
  nutritional characteristics for pigs.
• Commercial quantities of pulses (peas, lupins,
  beans) that can grow closer to pig producing
  regions, that have a high yield and
  cost-effective agronomy.

21
Subprogram 1b Quality assessment of feed
ingredients

• Adopt, implement, enhance and maintain NIRS
  calibrations for nutritional quality of cereals
  developed within the Premium Grains for Livestock
  Program.
• A wider range of rapid and objective analytical
  methods for the nutritional quality of feed
  ingredients.
• Processing and interventions to increase nutrient
  yield from target grains.

22
Subprogram 1c Wider range of feed ingredients
for use in pig diets

• Identification and development of new and novel
  protein and energy sources based on co-products
  and/or traditional sources
• Assessment of nutritional potential of candidate
  protein and energy sources
• Implementation of non-traditional and alternative
  protein and energy production.

23
Program 1-More and better grains/enhancing
nutrient availability
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To improve herd feed conversion

• More control over feed intake
• Increase metabolic efficiency
• Improve health status
• Raise reproductive efficiency
• Enhance viability of breeding females

25
Subprogram 2a Innovative products and strategies
for the measurement of feed intake.

• A method for the practical and continuous
  measurement of feed disappearance in groups (ie a
  pen of pigs at least daily).
• A method for practical and continuous measurement
  of feed wastage within groups.
• Novel methods for the measurement of individual
  feed intake within a group.
• Prediction of disease onset through the
  application of feed intake measurements.

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Subprogram 2b Innovative products and strategies
for the manipulation of feed intake.

• Novel molecules (eg. cytokines) and feed
  ingredients (eg. grains, inherent plant
  compounds, plant extracts) that can be used to
  manipulate feed intake.
• Elimination of post-weaning growth check and
  promotion of gut development through stimulation
  of feed intake.
• Improved carcase quality through manipulation of
  feed intake in growing pigs.

27
Subprogram 2c Alternative therapies, products or
strategies to improve pig production efficiency
and reduce mortality of all growth phases.

• Nutritional, genetic, immunological and
  management solutions for the control and/or
  reduction of disease and mortality as an adjunct
  or alternative to existing medication programs in
  all growth phases.
• Development of nutritional strategies and further
  enhancement of metabolic modifiers and their mode
  of application (eg. Paylean, pST) to improve lean
  tissue deposition.
• Implement novel genetic and reproductive tools
  and technologies to enhance production
  efficiency.

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Subprogram 2d Extend and enhance the productive
life of the breeding female through novel
management and system design.

• Nutritional, genetic and management strategies to
  improve the productive capacity of the gilt over
  her lifetime.
• Intervention strategies to reduce seasonal
  infertility.
• Practical system for the prediction of the time
  of ovulation.

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Program-2 Improving HFC
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Program 3 Improved market outcomes
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The Bottom Line

• Reduce COP from 2.05 to 1.50 per kg carcass
  weight.

32
Relative business indicators
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Comparative costs in USA dollars per kg carcass
weight
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HFC

• Currently averages 4.2 on a carcass weight basis
  for Australia (APL Pig check 2004).
• USA average closer to 3.7
• Rather scary when feed costs 27 cents/kg.

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Causes?

• Genetics?
• Wastage?
• Low energy diets?
• Light selling weights?
• Reproduction
• Poor health
• Tell me?

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Shorter term technical targets and changes for
Australia and their potential impacts.
37
Potential improvement in profit and flexibility
38
My RD priorities for the Australian Industry
(all linked with training/education)
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Programs/outcomes continued
40
Chances of success
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Board Focus Industry Outcomes
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Industry goals

• Grow exports
• Grow domestic demand
• Build human capital
• Be profitable
• Be sustainable

43
Industry challenges

• Fluctuating exchange rates
• Imports
• International competition
• Cost of production

44
Exchange rates and GVP
(Source ABARE)
45
Imports as of Australian pork consumption
46
Australian share of total pork imports
KOREA
JAPAN
CHINA
HONG KONG
PHILLIPINES
COMBINED TOTAL (2003) TOTAL IMPORTS 1,735,225
t AUSTRALIAN PORK 3.5 TOTAL VALUE A182
million
SINGAPORE
47
Cost of production (2002)
(Source Whole Hog)
48
Factors influencing profitability
(Source Pigstats 2003)
49
Australian pig meat exports
(Source ABS)
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Facts

• When cost of production is high, our capacity to
  export is low
• When cost of production is high, our capacity to
  compete with imports on the domestic market is
  diminished
• Cost of production is primarily influenced by
  feed costs and efficiency of feed use

51
Pigs are what they eat

• Healthy inputs healthy outputs
• Delivery of functional nutrients (selenium,
  omega-3, iron)
• Health benefits through consumption
• Domestic demand (volume)
• Export demand (volume)
• Value of product (revenue)

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Opportunities

• Cost-effective production of high quality,
  nutritious pork
• Additional health benefits arising from the
  consumption of pork through incorporation of
  functional nutrients
• Increased consumption of pork relative to other
  meats

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Performance indicators

• Reduction in on-farm cost of production from
  2.05/kg carcase to 1.50/kg carcase (2004
  currency values)
• Capture of new niche markets for value added pork
  products by 2012

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Can we get there?
10/kg feed 0.04/kg carcase 0.1 feed
conversion 0.04/kg carcase
Program 1a,b,c
Local supply (0.12), more accurate diet
formulation (0.04), greater energy yield
(0.08), alternative ingredients (0.12)
0.36
Program 2 a,b
Reduced feed wastage (0.06), strategic
medication(0.04), better summer growth (0.05),
reduced autumn fat (0.03), reduced weaning
growth check (0.05)
0.22
Program 2 c,d
Reduced medication costs (0.02), improved growth
and feed conversion (0.15), increased lifetime
productivity (0.07), reduced seasonal
infertility (0.05), measurement of ovulation
time (0.03)
0.32
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QAF - Realisation of outcomes

• 50 increase in production
• 500 increase in Japanese exports
• 10 reduction in imports
• 500 extra regional jobs

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Industrial, Commercial and Economic Benefits of
the Pork CRC
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Industrial

• Increased exports
• Increased domestic supply
• Reduced impact from drought, exchange rate
  fluctuations and imports
• Industry expansion
• Job creation
• Improved return on existing investment
• Strengthened rural sector

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Comparative growth
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Growth potential of key Asian pork markets
(2004-2012)
Australias 2003 exports 62,000t worth
221m (FAPRI, 2003)
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Commercial

• Product/process focussed RD programme
• High commercial relevance
• Applications extend beyond the pork industry
• Plant varieties
• Measurement of ovulation
• Measurement of feed intake
• Delivery of functional nutrients

61
Economic

• Conservative estimate of economic benefit
• AUD235 million per annum
• Additional economic benefits
• Grains industry
• Other livestock industries
• Commercialisation of products
• Health/nutrition sectors

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Key strengths

• Most consumed meat in the world
• Capacity for growth
• Bid based on industry need
• Cohesive industry
• Competitors collaborating
• Contributes to three national research priorities
• Component of industry restructure plan
• Significant investment in the CRC (11.2 million)
  at a time of poor returns

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Conclusions

• Pork CRC operational and ready to deliver
• Strong support from government and industry
• Outcomes will have a significant impact on the
  competitiveness of the Australian pork industry

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Supporting Information(if required)
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Core participants

• Australian Pork Farms Group (50k/100k)
• Australian Pork Ltd (750k/88k)
• QAF Meat Industries Pty Ltd (70k/2m)
• The CHM Alliance (50k/300k)
• NZ Pork Industry Board (50k/100k)
• Murdoch University (50k/400k)
• University of Adelaide (100k/450k)
• University of Sydney (200k/1m)

66
Supporting participants

• NSW Agriculture
• DPI Victoria
• Agriculture WA
• QDPI
• SARDI
• Alltech Biotechnology Pty Ltd
• Feedworks Pty Ltd
• GRDC
• Bartlett Grains Pty Ltd
• WA APC Pork Producers Committee

• Grainsearch Pty Ltd
• Elanco Animal Health Pty Ltd
• Ridley Agriproducts Pty Ltd
• APSA
• University of Queensland
• Betterblend Stockfeeds Pty Ltd
• Kemin Industries (Asia) Pte Ltd.

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Program 3 Implement nutritional and genetic
strategies to produce pork and pork products with
functional food properties.

• Fresh pork products ready for retail with
  specific human health benefit properties.
• Omega 3, CLA, Selenium
• Discovery within raw materials.
• Genetic strategy to change fatty acids.
• Value added pork products with increased
  functionality benefits
• Asian-style functionality benefits
• Incorporation of well-recognised or demonstrated
  functional food ingredients
• Assessment of pork and pork products for
  functionality using accepted models.

68
Program 4 Capacity Building

• Training of PhD students
• Honours/summer scholarship programs/course work
  programs
• Short courses
• Post-doctoral programs
• Technology transfer via existing APL channels and
  APSA