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The rise and fall of the virus impact

Editorial by APL CEO, Margo Andrae, for Australian Pork Newspaper

Recent weeks have tested the strength and agility of Australia’s pork producers and our markets in unprecedented ways.

For our industry, the significant social and economic disruption caused by COVID-19 will have long lasting impacts, many of which be difficult to predict. For now, our supply chains are adapting to the loss of foodservice sales which normally absorb about a quarter of all Australian pork, particularly popular restaurant cuts like ribs and bellies.

An additional challenge has been navigating freight difficulties for exports, which usually accounts for 10 per cent of our production. APL, exporters, government and importing countries have worked together to ensure flights have been secured for chilled consignments to Singapore and new markets like Hong Kong and Vietnam, helping to meet strong import demand and offsetting local surpluses here in Australia. At the same time, all indications are that imports have levelled off.

The two-paced impact of COVID-19 has seen fresh pork retail sales grow by 26.8 percent in volume and 35.7 percent in value compared to 12 months ago. Indeed, overall grocery sales in March surged and were 18 percent higher than Christmas 2019.

Driving the increase has been demand for cook-at-home meals like pork roast, pork mince, ribs and rashers. An initial spike in sales, as consumers raided retail shelf space for meat to freeze, has now normalised and a key focus of APL’s marketing response has been providing accessible information to assist consumers who have been preparing pork meals at home.

Nonetheless, and somewhat inevitably, domestic wholesale inventories have mounted in recent weeks and overall carcase values have fallen. This is undermining producer confidence and creating uncertainty for the individuals and families whose livelihoods depend on a profitable pig industry.

APL will continue to support all supply chain stakeholders to find innovative ways to market and promote Australian pork during this volatile period. With this in mind, I want to thank everyone who is participating in the Hospo4Hospo initiative, an ongoing partnership between the pork industry and a number of restaurants, which has already served up more than 1,000 free meals to hospitality staff who are now unemployed due to foodservice closures.

All of our retail and foodservice outlets are important, but I’m particularly proud of the role we’ve played in supporting butchers through the COVID-19 pandemic. These mostly small, family owned, independent businesses have remained open for trade and, not surprisingly, have increased their market share in recent weeks.

From the outset, industry ensured that Australian butchers were deemed as ‘essential services’, in contrast to New Zealand where butchers were forced to close. This not only reduced competition and consumer choice, it played havoc with pork production systems and supply chains geared specifically to service the butcher trade.

Even the serious disruptions in NZ have seemed relatively minor compared to problems being faced in North America, where producers are grappling to manage the turn-off of large volumes of prime pigs when major US processors have closed due to COVID-19 infections.

In Australia, I’m pleased to say our producers have stayed focused on supplying consistent volumes of high quality, locally grown pork which has continued to add so much economic value to our national economy at this crucial time. As an affordable and versatile meat, Australian pork is favourably placed to emerge in the post COVID-19 world in a stronger position in both domestic and export marketplaces.

Much of this will depend on how quickly impact supply chain businesses can resume normal trading operations and overcome the legacy of the extended shut-down period. Government support for businesses in the form of payroll tax relief and JobKeeper rebates will prove crucial to helping this recovery. Reports that some foodservice businesses are starting to re-instate staff and choosing to use this period for training, maintenance and renovation shows there is genuine optimism about the coming months. For now, any producer and related businesses in need of assistance of information related to COVID-19 can contact APL directly or visit www.agriculture.gov.au/coronavirus/industry

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Australian Pork Limited

The producer owned organisation supporting and promoting the Australian pork industry. Australian Pork Limited (APL) is caring for the future of Australian pork.