WA piggery on hold leaving 50 regional jobs in the balance as pork prices hit decade low
Updated earlier today at 04:26 May 30 2018
Pork prices at a decade low have forced Western Australia’s largest pig producer, Westpork, to shelve its plans for a $21 million, 68,000-head piggery near Moora, north of Perth.
In March last year Westpork revealed its plans for the piggery, located in the Shire of Dandaragan and 32 kilometres from Moora, saying it was to meet rising demand from the domestic market and would create 50 jobs in the region.
However pork spot prices have reduced in that time to now sit at a level below the cost of production for some farmers.
Westpork CEO Neil Ferguson said that given current market conditions, the company had made the decision in conjunction its with key customers.
“There are some producers doing it tough at the present time in terms of having difficulty finding a home for their pigs, and in that environment that’s the reason we have put the project on hold.”
“The majority of our pigs are sold on long-term arrangements,” Mr Ferguson said.
“Our key customers, including the retailers, have been very supportive of the arrangements that we have in place.
“From that point of view, Westpork is somewhat isolated — but we’re not immune to the downturn because we do have some pigs above contract.”
Mr Ferguson said the market and contracts from customers would dictate when the Moora piggery plans would be reactivated, which would be built on a 1,500 hectare farm.
“We’ve done some preliminary work there,” Mr Ferguson said.
“We’ve secured a water resource and put some infrastructure in there, but the balance of the project is really just sitting there waiting for us to pull the trigger.
More export markets needed
About 20 per cent of pork produced in WA is exported to Singapore, but the majority is used as fresh pork in the domestic market.
Mr Ferguson said increasing export markets would provide a short term solution to the oversupply problem, but would also help create a more stable market in the longer term.
“Ideally the industry would like access to the China market, I know APL (Australian Pork Limited) have been doing some work there,” he said.
West Australian Agriculture minister Alannah MacTiernan said she was deeply concerned that WA pig producers could not access China, one of the biggest pork consumers in the world.
“This is very disappointing for the Dandaragan region,” she said.
“This is, I would suspect, in part affected by the fact that we have not been able to develop an export protocol with China — and that is directly referrable to the behaviour of the Federal Government and using China as a political football.
“The way the Federal Government has been behaving towards China has had serious consequences for primary producers here in this state, and that there has been, not withstanding the free trade agreement, basically work on the pig meat protocol has virtually stopped.”
Understandable but disappointing
Westpork’s Neil Ferguson said that while the longer term outlook for the pork industry was strong, he expected prices would start to improve towards the end of 2019.
“The underlying demand for pork is good and the fundamentals behind the industry are sound in that consumption at consumer level is rising at three to four per cent per annum and has been consistently, from a demand perspective the industry has a bright future,” he said.
“In the short term, what’s happened is producers were seeing record prices back in 2015–2016, and across the country producers expanded their production base in response to that price signal, and we’ve overshot the supply side of the equation.”
Moora shire president Ken Seymour said it was disappointing news for his community, which is still fighting the State Government’s plans to close its local residential college.
“Country towns, there is always room for employment, considering we will lose up to 11 employees with the Moora college if it closes, to have an extra 50 jobs in a shire such as Moora, would be a great opportunity.”
