northern rivers pork industry strategic plan may...

Strategic Plan for Development of the Pork Industry

Within the Northern Rivers Region NSW

Prepared by:

Stephen Fletcher & Associates Pty. Ltd. Environmental planning

for

NSW Trade and Investment

Regional Development Australia Northern Rivers & the Northern Co-operative Meat Company Ltd.

May 2015

TABLE OF CONTENTS

1 Executive Summary 1

2 Introduction 2

3 Objective and Key Outcomes 3

3.1 Objective 3 3.2 Outcomes 3 3.3 Area to which this strategic plan applies 3

4 Preparation of the Strategic Plan 4

5 Market Placement 5

5.1 Introduction 5 5.2 Global Pork Production 5 5.3 National Pork Production 6

5.3.1 Trend in Producer Numbers within Australia 6 5.4 Distribution of Farms by State 7 5.5 Pig Meat Production by State 9 5.6 Production Within the Study Area 9 5.7 Export Trends 10 5.8 Domestic Consumption 10 5.9 Price Trends 12 5.10 Principal Production Costs 13 5.11 Summary 13

6 Industry Consultations 15

6.1 Initial Consultations 15 6.2 Industry Workshop 15

7 SWOT Analysis 16

8 Potential Impediments to Industry Growth Within the Region 19

9 Potential New Market Opportunities 20

10 Benchmarking 21

10.1 Comparative and Competitive Advantages 23 10.2 Critical Success Factors 23 10.3 Discussion 24

11 Supply Chain Development 25

11.1 Introduction 25 11.2 Discussion 25

12 Case Studies 30

13 Action Plan 33

13.1 Introduction 33 13.2 Discussion 33 13.3 Strategic Actions 41

14 Review and Implementation 52

15 Appendices 53

Disclaimer and Copyright

The information contained in this draft report including opinions, advice and representations (‘the

content’) has been formulated in good faith and with all due care, and is considered true and

correct at the time of publication. NSW Trade and Investment, Regional Development Australia,

Northern Co-operative Meat Company and Stephen Fletcher and Associates Pty Ltd do not

warrant or represent that the content is free from errors or omissions or that it is exhaustive. No

liability will be accepted in relation to the quality or accuracy of the content.

NSW Trade and Investment, Regional Development Australia, Northern Co-operative Meat

Company, their respective servants and agents accept no responsibility for any person acting on,

or relying on, or upon the content. To the extent permitted by law NSW Trade and Investment,

Regional Development Australia, Northern Co-operative Meat Company disclaim all liability for any

loss, damage, cost or expense incurred or arising by reason of any person using or relying on the

content or by reason or by any error, omission, defect or mis-statement (whether such error,

omission or mis-statement is caused by or arises from negligence, lack of care or otherwise).

Users of this report are reminded of the need to ensure that all information upon which they rely is

up to date. Clarification regarding the currency of the content can be obtained from NSW Trade

and Investment.

© NSW Trade and Investment, Northern Co-operative Meat Company - May 2015

Northern Rivers NSW Pork Industry Strategic Plan May 2015 Page 1

1 Executive Summary

The Strategic Plan for the Northern Rivers New South Wales region is an initiative of NSW Trade and Investment, Regional Development Australia (Northern Rivers) and the Northern Co-operative Meat Company Ltd. The area (region) to which this plan applies combines the local government areas (LGAs) of Tweed, Byron, Ballina, Lismore, Richmond Valley, Kyogle, Clarence Valley and Tenterfield. The Strategic Plan seeks to address current and identified future issues facing the pork industry within the region by providing a suite of strategic directions and actions serving to capitalise on the strengths and opportunities of the industry and addressing internal and external constraints and threats. Strategic actions within the Plan have been derived from agency and industry consultations, and have been formulated to address the following aspects: § Grain Supply and Prices; § Power Costs; § Pricing and Marketing/ Promotion including Co-operative Opportunities; § Training; § Succession Planning; § Northern Co-operative Meat Company; § Social and Environmental (regulatory) Pressures; § Governance and Compliance Risk Management; § Value Adding; § Animal Welfare and Quality Assurance; § Research and Statistics.

The region is not a major producer of pork within NSW and nationally, however is acknowledged as supplying quality product for the domestic and export markets. The pork industry is a significant contributor to the regional economy. Opportunities exist for the continued growth of the industry within the region and a key element of this relates to the effective branding and marketing of the premium regional product. Opportunities also exist for addressing the issues of input pricing and future infrastructure requirements. Improving supply chain linkages will further assist in the development of the industry. The Plan seeks to guide the industry over the next ten years. A working group comprising representatives from NSW Agriculture, Trade and Investment, Regional Development Australia, Northern Co-operative Meat Company Ltd, Local Council's and Australian Pork Limited will be formed to implement the actions within the Plan and to review and update the Plan.


2 Introduction

NSW Trade and Investment in conjunction with Regional Development Australia Northern Rivers and the Northern Co-operative Meat Company Ltd is undertaking the preparation of a strategic plan looking at future development options and scenarios for the pork industry within the Northern Rivers region of NSW. The study area combines the local government areas (LGAs) of Tweed, Byron, Ballina, Lismore, Richmond Valley, Kyogle, Clarence Valley and Tenterfield. Within the study area, the industry has faced decline over the last decade due to a number of factors including increased costs of production, domestic and international competition, and changes in environmental assessment and licence requirements. It is hoped that the development of this strategic plan will establish a clear direction for the future growth and development of the industry, identifying the key issues, which can be addressed at the regional and state level to foster the future development of the pork industry within the NSW Northern Rivers region.


3 Objective and Key Outcomes

This Strategic Plan has the following primary objective and desired outcomes

3.1 Objective

The primary objective of this plan is to address current and identified future issues facing the pork industry within the NSW Northern Rivers region by providing a suite of strategic directions and actions serving to capitalise on the strengths and opportunities of the industry and addressing internal and external constraints and threats.

3.2 Outcomes

§ Establish a co-ordinated process of strategic actions for the pork industry within the Northern Rivers region of NSW designed to enable retention, enhancement and value adding of product;

§ Address key logistical, production, regulatory and other such impediments to the growth of the industry within the region;

§ Develop over time new marketing, regional branding and investment opportunities for the industry;

§ Provide direction on training and progression planning opportunities to assist in labour retention and expansion;

§ Identify potential collaborative opportunities; § Assist with the industries' supply chain development within the NSW Northern

Rivers region. The strategic plan is intended to cover the period 2015 - 2025. The plan aims to build upon existing broader strategic plans within the industry including the NSW Agriculture Industry Action Plan 2014 (AIAP) and the Australia Pork Limited (APL) Strategic Plan and associated strategies.

3.3 Area to which this Strategic Plan Applies

The area to which this plan applies combines the local government areas (LGAs) of Tweed, Byron, Ballina, Lismore, Richmond Valley, Kyogle, Clarence Valley and Tenterfield.


4 Preparation of the Strategic Plan

The development of this strategic plan involved the following seven (7) steps: 1. Initial consultation with a number of pork producers, agencies and value adding businesses to discuss current activities, identified impediments and opportunities 2. Scenario analysis examining global, national and NSW industry trends, consideration of the supply and demands issues facing the industry, placement of the Northern Rivers pork industry within the wider context and examining sustainability issues and opportunities for the industry in the longer term. 3. Preparation of an issues paper detailing the results of the initial consultations and identifying the challenges facing the industry within the region and identifying the potential opportunities. 4. Industry assessment comprising: § Identifying associated costs of pig production in the Northern Rivers; § Assessing the market for pork nationally & internationally, and identifying the key market

opportunities; § Assessing the viability and opportunities for locally grown product; § Assessing the quality of local product and production methods when benchmarked

against other key pig production regions in Australia; § Identify the needs of producers to adopt current production methods, including training. 5. Industry workshop to discuss Stage 1, 2, and 4 findings. 6. Supply chain development comprising: § Identifying the opportunities for supply chain development; § Identifying potential supply chain partners; § Identifying and document infrastructure and other impediments to the development of

the supply chain; § Identifying further options for enhancing the supply chain; § Make recommendations to industry and Government on best ways to increase

investment in current operations and to attract investment in new operations; § Identify & make recommendations to industry and Government on current regulatory and

approvals processes that may assist to increase investment opportunities. 7. Development of the Strategic Plan


5 Market Placement

5.1 Introduction

This section identifies the placement of the pork industry with the NSW Northern Rivers within the global and national contexts.

5.2 Global Pork Production

On the global scene, Australia is not a significant pork producer with production at 343,352 tonnes for 2013. By comparison China produced 49,396,351 tonnes for the same period and the USA produced 10,330,808 tonnes. The following table identifies international production.

Australia imports approximately 152,000 tonnes of pork product annually and exports approximately 35,000 tonnes annually.


5.3 National Pork Production

The pork industry contributes approximately 2.13 per cent of total Australian farm production with around 1,500 pig farmers producing 4.7 million pigs annually. The Australian pork industry employs more than 20,000 people in Australia, contributes approximately A$2.8 billion in gross domestic product to the Australian economy, and more than A$1.3 billion in household income. This equates to 0.20 per cent of gross domestic product and 0.21 per cent of FTE jobs in Australia. (Australian Pork Ltd., 2014). The following table identifies the 2014 number of pigs slaughtered within Australia, the amount of product produced and the average slaughter weights.

Of pigs slaughtered the majority (90 per cent) are baconers with porkers comprising 7.2 per cent. The remainder is comprised of sows and other pigs. The number of pigs grown in Australia has steadily increased since 2009 (ABS, 2015).

5.3.1 Trend in Producer Numbers Within Australia

The following graph identifies the trend in the number of pig producers within Australia:


The graph shows a considerable decline in the number of producers, identifying the trend for closure of smaller piggeries and replacement with large-scale commercial operations. This trend has occurred within the NSW Northern Rivers region with a reduction in the number of small family-run operations, often those in conjunction with other agricultural activities such as dairying. A review of the herd sizes in the following graph confirms the significant increase in the average size of farms.

5.4 Distribution of Farms by State

The chart and table below identifies the distribution of sows by state and the number of pig farms per state as at 2011/12.


5.5 Pig Meat Production by State

The following table identifies the number of pigs slaughtered by state, the amount of product produced and the average slaughter weights in 2014.

5.6 Production within the Study Area

From initial consultation with a number of growers and the Northern Co-operative Meat Company Ltd, it is evident that the majority of pork produced within the study area is processed through the Booyong abattoir. The Northern Co-operative Meat Company has advised that the plant is licensed (and has a capacity) for 6,000 pigs per week, and is currently processing approximately 4,000 pigs per week, of which approximately 1,000 pigs are produced within the study area. The North Coast Local Land Services (LLS) maintains records of total pig numbers via farm stock returns at the end of each financial year. The area covered by the LLS includes the entire region that is the subject of this strategic plan, with the exception of Tenterfield. The following table identifies total recorded pig numbers within the region for 2009, 2011 and 2014:

Year of Records Total Number of Pigs in Northern Rivers Region Recorded

2009 20,062 2011 25,062 2014 22,157

Australia Bureau of Statistics (ABS) data shows the Richmond Tweed census collector region (which comprises part of the study area - Clarence and Tenterfield excluded) as having approximately 7 per cent of the total of NSW sows and gilts, placing it as the fourth lowest regional producer. Main producing ABS 'statistical regions' within NSW are the Murray, Central


West and Northern. The Northern region incorporates the Tamworth/New England region and the northwest including Moree. Accurate figures, other than those recorded by LLS, are not available. In respect of the Tenterfield local government area, there are two large piggeries.

5.7 Export Trends

As identified above, Australia is not a major producer of pork product globally. Despite this, the export from Australia of pork to other countries, particularly Singapore, New Zealand, the Philippines, Hong Kong, China and Papua New Guinea, is growing with a total export of 39,670 tonnes of product for 2014 with a value of A$117.6 million. The following table identifies the percentage exports by country for 2014.

Victoria is the largest exporter by volume, followed in order by Western Australia, New South Wales and Queensland.

5.8 Domestic Consumption

The domestic consumption of pork product per capita has increased moderately yet steadily since 1960, with a slight plateau during much of the 1990's at around 20kg per person per year. Consumption has increased per year since 2001 and forecasts based upon the current trend predict a gradual increase in consumption to approximately 27 kg per person per year by 2016. In 2014 a total of 362,192 tonnes of product was consumed domestically. The following graph shows the trend in pork consumption within Australia compared to other meat products:


Import of product has increased to accommodate demand more so than any increase in domestic supply. In 2014 a total of 147,185 tonnes of product was imported. Internationally, consumption is also increasing as shown in the following table (Note: the figures in this table refer to kg of carcass weight per capita).


5.9 Price Trends

Domestic prices for Australian pork carcasses (both baconers and porkers) have varied markedly over the last decade and are also seasonally dependent (with a notable anomaly in price increase during the second half of 2008). The following two tables (to July 2013) show that prices were highest during 2009.


5.10 Principal Production Costs

The principal recurrent cost of pork production is grain supply, followed by electricity costs, feed additives (vitamins, nutrients etc.) and transport. Based on grower consultations the cost of grain constitutes in the order of 50 to 60 per cent of production costs, with electricity approximately 5 to 10 per cent of cost (depending upon age and nature of infrastructure). Transport costs of product and additional inputs such as feed additives may contribute up to 10 per cent of costs. The average price of pigs versus grain prices for the eastern seaboard is shown in the graph below:

NSW Department of Primary Industries has produced a 'Primefacts' guideline for assessing the cost of pork production (http://www.dpi.nsw.gov.au/agriculture/livestock/pigs/management/pork-cost-of-production). The document has not been updated since its release in 2006, however it provides a general comparison for producers to assist in determining feed and non-feed production costs and in establishing efficient feed conversion ratios.

5.11 Summary

§ Pork is the most widely consumed form of animal protein, at around 40 per cent of world meat consumption;

§ International trade has increased at about 6 per cent per annum over the last 5 years. The main growth in world pork production is occurring in China, Brazil, USA and Canada;

§ The major importing countries of the world include Japan, Russia, USA, Mexico and Hong Kong;

§ The major pork exporters include the European Union, Canada, USA and Brazil; § Annual pig meat production in Australia is currently about 406,000 tonnes, which is

about 0.4 per cent of world production;


§ The total value of pork produced in Australia is about A$2.6 billion and it generates over A$1.1 billion in household income. In 2002 the pork industry directly generated approximately 6,000 full-time jobs, with a further 33,863 jobs generated indirectly in other sectors of the national economy;

§ According to the Aust. Pork Ltd, "during the next 10 years competitive pressures on the Australian pork industry are likely to intensify. World pork consumption is increasing, particularly in Central and South America, the Pacific Rim and in Central and Eastern Europe. Countries such as Canada, the United States and Brazil are increasing exports to meet this demand. The global trend is to use grain for human consumption and biofuel production rather than animal production. Increasing amounts of world grain production will be diverted to ethanol production as world oil supplies decline after 2010. This will cause higher grain prices and a cost-price squeeze on industrialised animal production (feedlot cattle, pigs and poultry)" (APL, 2014);

§ Pork production within the study area has fluctuated with current production less than in previous years. Over the last decade there has been a decline in pork production within the Northern Rivers NSW region;

§ The Booyong abattoir is currently processing fewer products than it has the capacity and license allowance for. Much of the product being processed is grown in Queensland and therefore out of the study area;

§ From a demand and local process capacity perspective, opportunities exist for strategic planning to increase the amount of pork produced within the Northern Rivers NSW region;

§ From the consultations undertaken there are a number of impediments to increasing pork production within the study area including rising costs for inputs particularly grain and electricity.


6 Industry Consultations

6.1 Initial Consultations

At the commencement of the project, meetings were held with a number of pork producers within the region. The purpose was to discuss what each producer saw as the key positive and negative issues influencing their operations, identify and quantify the main costs of production and to consider actions which could assist the industry in the future. In addition to producers, meetings were also held with: § Bangalow Sweet Pork § Booyong Abattoir § North Coast TAFE § NSW Department of Primary Industries § CEO and Manager Member Services Northern Co-operative Meat Company § Australian Pork Limited § Environmental Protection Authority

6.2 Industry Workshop

An industry workshop was held in Lismore on 24th February 2015, attended by thirteen (13) industry members. The results of the workshop are provided as Appendix 2 to this report. Amongst the participants there was general support for the preparation of the strategic plan and for the development of appropriate actions relating to: § Co-operative approach dealing with grain and potentially power costs; § Co-operative marketing and branding of product promoting the 'clean and green' image

for the region; § Succession planning; § Effective promotion of Booyong Abattoir and capitalising on its reputation; § Training; § Assistance with increasing export trade; § Assistance with planning approvals; § Developing additional domestic markets.


7 SWOT Analysis

Based upon the consultations and research undertaken, the following SWOT (strengths, weaknesses, opportunities and threats) analysis was prepared. The analysis serves to provide a focus for the development of strategic actions which collectively seek to protect and expand upon the identified industry strengths, capitalise on the opportunities, and seek to mitigate where practical identified weaknesses and threats. STRENGTHS § Existing co-operative membership for majority of producers;

§ Proximity to domestic markets including within the region and south-east Queensland/Brisbane;

§ Availability of water generally within the region compared to other regions;

§ Transport links including Sydney-Brisbane rail line; § Existing regional abattoir at Booyong which is well regarded

for its operational regime (especially for the Singapore market);

§ Recognition of the region for its 'clean and green' image with respect to local produce;

§ Successful product marketing campaigns for other local producers such as macadamias, and regional campaigns such as Northern Rivers Food and Northern Rivers Food Links;

§ A number of local growers and value adders have established successful product markets at premium prices;

§ Availability of labour (although quality can be an issue); § Generally readily available supply of water compared to

other production districts. WEAKNESSES § General reliance upon a limited number of wholesale

buyers; § Need for upgrade of out dated piggeries and associated

planning approval and licensing issues; § Climate issues affecting growth and mortality (heat and

humidity) - cost of climate control measures; § Economies of scale for smaller producers; § Increasing road transport costs; § Demand for leaner (less weight pigs) by key purchasers,

which increases production rates (grain). Current demand is for pigs generally in the 65-70 kg range. By comparison some Queensland markets are receiving pigs averaging approximately 85 kg. The grain to meat conversion rate is higher for the more mature pigs;

§ Haulage road infrastructure in many areas is deteriorating and presents an impost for haulage. An example is the


Legume to Woodenbong road, which is used to haul grain to the region from Queensland.

POTENTIAL OPPORTUNITIES

§ Opportunity for co-operative marketing; § Regional branding to attract premium drawing upon the

region’s 'clean and green' image; § New and emerging markets for regional and premium

product; § New value adding businesses; § Emerging technological advancements; § Agri-tourism opportunities; § Co-operative options for seeking reduced grain and power

costs and potentially other costs such as insurances; § Grower assistance, possibly with extension services,

application/approval assistance (dealing with councils and state agencies, development of development guidelines etc.);

§ Capitalise on current increase in domestic pork consumption and expanding export market;

§ Continued growth and development of value adding businesses;

§ Meeting current under-met capacity at Booyong abattoir; § Increasing the capacity at Booyong abattoir; § State agency assistance for example assistance with

capital improvements via grants, investment packages, low interest rate loans;

§ Planned new rail freight terminal and gain handling facility at Casino;

§ Consumer trends towards boutique and premium product; § Increases in export trade and domestic consumption; § Growers to produce own electricity, biogas/methane; § Training for people wishing to enter the industry; § Value adding product locally including boning and

packaging of meat; § Potential for additional supply chain partners; § Assistance with regulatory requirements such as planning

approval; § Opportunity for the Northern Co-operative Meat Company

to market itself as a best practice processor nationally and internationally.

THREATS § Rising production costs, particularly grain and electricity; § Potential for other countries to be able to import fresh pork

into Australia; § Increased environmental and licensing requirements and

costs and affecting potential for expansion/ redevelopment; § Increased perceived or actual land use conflicts between

producers and residents;


§ Issues with succession planning as current producers seek to retire;

§ Medium and long term viability of Booyong abattoir; § Difficulties in obtaining consents and approval for new

piggeries within the region; § Increased competition from outside region and

internationally (for imported product) and cheaper import prices (particularly from countries with grower subsidies);

§ Lack of producer subsidies or tariff barriers (a national issue);

§ Increased animal welfare requirements adding to cost of production.


8 Potential Impediments to Industry Growth within the Region

Industry consultations have flagged the following actual or potential impediments to growth of the pork industry within the study area:

§ Difficulties in seeking approvals and licenses for the redevelopment of infrastructure and the costs of seeking such approvals. Increasing complexity of the consent and approvals process;

§ Costs and impediments associated with the perceived tightening of environmental licensing controls in particular for waste management;

§ Reluctance to invest in new capital given uncertainty of market forces, increased competition and predicted profit margins;

§ Changes to land use conflict buffer zone requirements; § Availability of sufficient unconstrained land for establishing new large scale

piggeries, and any physical or legislative constraints associated with expanding or redeveloping existing operations;

§ Rising recurrent costs particularly grain and electricity; § Limitations on sources of grain supplies given reliance on road transport for

delivery which relates to the distribution area within which grain can be economically sourced;

§ Lack of transition opportunities (succession planning) for producers intending to leave the industry.


9 Potential New Market Opportunities

Potential new market opportunities may comprise:

§ Developing a combined regional brand for locally produced pork; § Collaborative marketing to obtain additional buyers to reduce reliance upon

current limited number of buyers; § Expanding the value adding and retail product industry within the region

promoting the current 'clean and green' image; § Assistance packages for new and expanding value adding businesses; § Agri-tourism and food-based tourism.


10 Benchmarking

Australia pork is well regarded internationally as well as domestically. The Northern Rivers NSW region is not a significant producer of pork by quantity within the NSW and national context. It is however apparent that pork and its derived products produced within the region are of a recognised high quality by Australian standards. A number of producers and value adders have been successful in capitalising on this reputation and via quality control throughout the entire supply chain, effective branding and marketing, they have created niche markets and benefit from premium prices (returns). One key element of this marketing and promotion relates to the perceived clean nature of the regional environment (the 'clean and green' image). A number of producers promote the fact they produce hormone and antibiotic free pork. A small number of growers produce free-range pork, which is marketed as such. The 'clean and green' image of the region provides opportunity for establishing a co-operative approach to actively brand and market the majority of pork produced under this image. This approach has been supported by the majority of producers approached during the preparation of this draft plan. Within Australia there are no readily comparable regions seeking to brand and market pork product under the 'clean and green' image, although the Murraylands regional brand is a comparison. This provides added opportunity and incentive for regional branding of Northern Rivers NSW Pork. There are a number of individual companies or groups of growers which market pork as being a premium product with a regional focus. Examples include: Murraylands Regional Brand Regional Development Australia in South Australia (exporting the Murraylands project for businesses) has developed 'The Murraylands Regional Brand' in central eastern South Australia. The branding seeks to distinguish the region and promote producers and businesses that meet a third party fully accredited quality assurance level. Within the brand there is a consortium of 4 major Australian pork industry players, with state-of-the-art export pork processing facilities located at Murray Bridge, South Australia. The consortium states "quality is high because the ability exists to manage the product through each step of the 'Farm to Retail' production process. Proximity to grain, transport and major pig producers combined with state-of-the-art, high volume, processing facilities ensures that demands for pork locally and overseas are met." In 2012-13, the South Australian Research and Development Institute (SARDI) joined forces with the University of Adelaide School of Animal and Veterinary Sciences to form centres of


excellence in animal research, development, education and training in the poultry and pork sectors. The collaboration is known as 'The Southern Pork Alliance.’ Working with local producers, the alliance focuses on whole-of-value-chain innovations to ensure a more efficient, sustainable and profitable pork industry. Research programs at SARDI cover a wide range of capabilities, from animal nutrition, housing, hygiene, reproduction, health and welfare through to food safety and product development. Murray Valley Pork Murray Valley Pork is a 'regional' brand developed for a network of producers in southern NSW and northern Victoria. The brand promotes 'a premium range of hand-selected pork' and actively promotes an animal welfare policy, which includes staff competency in husbandry and pig welfare. The brand is endorsed by a celebrity chef who acts as an ambassador for the product. Otway Pork 'Naturally’

Otway Pork is a brand for the Pastoral Pork Company, which claims to be Australia’s largest outdoor pig producer.

The company has developed a free-range breeding herd to 'produce pigs in a natural, outdoor environment where the welfare of the pig is paramount.’

Otway Pork supplies pork products in selected butcher shops and supermarkets in Victoria, NSW, South Australia, Queensland and the ACT.

King Valley Pork King Valley Pork in Victoria is a brand for a free-range piggery which produces Large Black and Berkshire pigs and promotes the product as 'gourmet old-style pork' of premium quality. SunPork Fresh Foods SunPork Fresh Foods is a sales and marketing company formed by three producers in southeast Queensland (Darling Downs). The company markets its product as premium pork. Milne Agrigroup - Western Australia

Western Australia's largest agribusiness Milne AgriGroup (MAG) has secured a contract with Coles Supermarkets in a deal that will see farmers in the Great Southern Region of Western Australia as the only national suppliers of free range pork through more than 700 Coles supermarkets.

Under the new deal, MAG will treble its free range pork production with eight Great Southern pork businesses signing up to supply around 1,200 pigs for slaughter each week by mid-2015.


10.1 Comparative and Competitive Advantages

The Northern Rivers regional pork industry has a number of identified advantages that can be capitalised upon. Those identified are as per the strengths listed in the above SWOT analysis and include:

§ Recognised high quality of the product; § Our clean and green and sustainable production image with consumers; § A number of growers and value adders who are championing the production, marketing

and branding of premium product, providing a positive differentiation between product produced with the region and those from other regions within NSW and Australia;

§ Best practice recognition for Booyong abattoir; § Growing domestic market including south east Queensland; § Opportunity for linkages with other producers of local premium products; § Opportunity for co-operative marketing and promotion for the benefit of all regional

producers and suppliers.

10.2 Critical Success Factors

Regional producers have identified a number of key constraints, which may affect the future viability of their operations. In essence these relate to:

§ Increased production costs, particularly grain and power prices; § Reliance upon road transport of grain which increases cost of supply and limits the grain

growing areas within which grain can be economically sourced; § Environmental and social matters affecting establishing new operations or redeveloping

existing ones. Within this context there is a recognition that the region by virtue of its general topography, climate, rainfall and average farm sizes presents challenges in meeting regulatory requirements such as buffer distances to avoid land use conflicts and separation distances from natural features such as drainage lines or environmentally sensitive areas;

§ Road infrastructure impediments; § Reliance upon sale of processed pigs through traditional buyers who dictate prices,

accepted carcass weights and fat layer levels.

Producers consulted realise that by addressing these constraints, opportunities for improving business viability will result and in turn the potential for expanding production through new or upgraded operations will increase. The developed strategic actions seek to address the constraints by assisting with the following critical success factors:

Production Costs

§ At the regional level, to reduce production costs associated with grain and power supply and potentially costs related to individual marketing and insurance coverage;


§ Address infrastructure impediments through supporting the upgrade of regional road transport links and the development of the Casino rail freight terminal and grain handling facility.

Product Pricing

§ A co-operative approach to regional branding and promotion aimed at developing expanded markets and new markets for premium and niche product, expanding upon the current positive image the region enjoys from domestic and international consumers.

Development Opportunities

§ Assist producers with redevelopment of operations or establishing new operations; § Address opportunities for expansion of the Booyong abattoir to cater for future increase

in local pork production.

10.3 Discussion

§ The Australian Farm Institute predicted in a study of twelve Asian nations that by 2020 pork consumption would increase by 17.7 million tonnes, of which 1.2 million metric tonnes will be imported and 16.5 million tonnes will be produced domestically. The forecasted additional import requirements of these nations would be equivalent to 260 per cent of Australia’s current total pork production;

§ Nationally and within NSW and the region, demand for pork product continues to increase whilst production within the region remains somewhat static. The majority of regionally produced product is processed through the Booyong abattoir, which is owned and operated by the Northern Co-operative Meat Company Limited. The majority of the regional growers are members of the co-operative;

§ The Booyong abattoir is currently processing pork numbers below its capacity. Additionally, the majority of pigs processed through the abattoir are produced from outside the study area/region;

§ Opportunity exists for the increase in pork production within the region within the capacity of the Booyong abattoir however the viability of this is subject to a number of economic, environmental and social considerations as identified above. Current costs of production and costs and legislative provisions associated with new developments and redevelopment of existing operations have been initially identified as key issues to be addressed;

§ Conversely there are a number of identified strategic initiatives which may potentially assist in reducing production costs or assist in providing additional marketing opportunities to attract a premium price;

§ The development of a strategic plan for the pork industry within the Northern Rivers NSW Region seeks to address the impediments and opportunities facing the industry and to provide appropriate recommendations and direction.


11 Supply Chain Development

11.1 Introduction

The production of pork and pork products involves a number of integrated regional and external growers, producers and businesses. A supply chain assessment identifies the flow of goods and services within the system and between the various input and output components and is used to develop an appreciation of the economic interactions between the various industries. The pork industry within the Northern Rivers region has only a limited number of inputs, the most significant being:

§ Feed and feed additives; § Veterinary support and supplies; § Power; § Water; § Housing and related infrastructure; § Labour; § Transport; § Other costs associated with production including insurances, certifications, licenses,

annual compliance audits (for EPA licensed piggeries), Australian Pork Limited (APL) levies etc.

Processing and value adding costs include:

§ Transport; § Abattoir fees; § Packaging and shipment; § Administrative costs; § Marketing costs.

Non-recurrent costs include the replacement of infrastructure, new plant and equipment, environmental management works (such as effluent pond de-sludging).

11.2 Discussion

Flow Outside the Region

The principal input into the supply chain from outside of the region is grain. Much of this is sourced from northwestern NSW districts and from southwest Queensland. Some grain is however produced within the region and is supplied to producers either directly or though grain handling and milling businesses within the region. The issues and potential options associated with grain supply are discussed further below. Growers consulted advise that the cost of grain constitutes approximately 50 to 60 per cent of total input costs. This accords with the national average of 55 per cent cost (APL 2015). Other inputs provided from outside the region include veterinary services, feed additives, packaging and other ancillary production items.


Grid power is considered to be an externally derived input. Grain Supply The majority of grain used by the pork industry within the region is supplied from northwestern NSW districts such as the Narrabri and Moree regions and from southwest Queensland (Darling Downs). This is due to the current reliance upon the road transport of grain into the region. The cost of road transport from other regions such as Wagga, Narromine and Ningan affects viability. Annual grain supply from the northwestern NSW and southwestern Queensland areas is less secure than other grain producing regions in NSW due to variances in rainfall. This leads to a situation whereby in a poor production season competition (demand) for supply of grain is high and can affect overall grain prices. When supply is reduced, the larger (out of region) purchasers of grain can dictate prices. Graincorp is the largest eastern Australian grain storage and transport network focusing on wheat, barley and canola. Riverina Stockfeeds at Casino is a major supplier of grain to producers within the region. Riverina currently supplies approximately 1,000 tonnes of complete feed to Northern Rivers piggeries monthly at an average cost of approximately A$450.00 per tonne (+ GST). There are plans to establish a regional rail freight facility and grain handling facility at Namoona, north of Casino. The proponents advise that once operational they intend to source grain from the southern regions of NSW and with savings in transport costs associated with rail, expect to be competitive within the Northern Rivers region marketplace. They are interested in supplying grain to pork producers and see potential benefit in having a co-operative approach to the bulk purchase of grain. Flow within the Region Additional to the pork produced, the principal inputs into the supply chain procured from within the region comprise labour, transport, fuel, gas, professional consulting services and building materials (for maintenance and redevelopment). The processors and value adders within the region purchase regional product and distribute the processed and value added product to consumers within the region as well as outside the region. Externally, product is generally sold to businesses within the major eastern seaboard cities as well as overseas. Options for Increasing Supply within the Region A key desired outcome of this strategic plan is to facilitate additional pork production from within the region, through providing actions relating to reduction of production costs, increases in value adding and attracting premium pricing, as well as various environmental, management and social initiatives. Aside from increased product supply and value adding there is limited identified scope for additional supply of inputs from within the region. Possible options include additional grain production and supply within the region, and sourcing supplementary inputs such as veterinary services, feed additives and the like. Options for Reducing Input Costs These have been discussed previously and principally involve co-operatively sourcing cheaper grain prices (and additives) and bulk pricing for power. The option for generating on-farm power using biogas could reduce power costs.


Options for Increasing Output Value The focus on increasing output value involves regional (co-operative) branding and marketing to the domestic and international markets, establishing niche markets to attract premium prices for pork and pork products produced within the region. Producing additional income via use of byproduct in particular effluent waste may provide additional farm income. Infrastructure Options A number of infrastructure impediments to supply chain development have been identified. These are:

§ Road infrastructure within parts of the region is sub-standard and presents a potential added cost for road based freight transport through necessitating reduced load weights and increased transport costs by weight. The Legume to Woodenbong road has been identified as a main transport route in poor condition;

§ There is no current rail handling facility for grain and other goods within the region. In terms of grain, this means that all grain supplied for out of the region is brought in by road;

§ Booyong abattoir has a current assessed capacity of up to 6,000 pigs per week. Expansion of the capacity of the abattoir would be required to accommodate any substantial increased pig production within the region, otherwise pigs would need to be transported out of region for slaughter.

Linkages The action plan identifies appropriate linkages between producers and value adders, input suppliers, support agencies and organisations. The following table identifies current and identified potential key linkages.

Product Linkages Opportunities Grain Majority sourced from out of region (North-west NSW

and South-west Queensland) and supplied by local grain mills, in particular Riverina Stockfeeds. Seasonal grain prices are largely determined externally and therefore not dictated by local producers. Prices are largely determined by organisations such as the Chicago Board of Trade (internationally and for export market) and Graincorp (Australia). Grain is supplied by road transport and is affected by the standard of road infrastructure. The Legume to Woodenbong road has been identified as having a negative impact upon transport movements given its poor condition which affects potential grain tonnage capacity for trucks delivering grain from South-east Queensland.

Future potential for sourcing grain from southern districts of NSW. Opportunity for purchasing bulk grain on a co-operative basis. Proposed rail freight and grain handling facility at Casino may provide for future opportunity for receiving and processing grain sourced from additional grain growing regions such as south-western NSW.

Feed additives Generally supplied from Queensland. Additives have not been identified as a significant cost and opportunity for reducing these costs on a regional basis is limited.

There may be limited opportunity for feed additives to be produced locally

Power Currently all producers rely upon standard grid power the majority or all of power needs. Grid power is not produced within the region.

Opportunity for exploring potential use of solar power given the relatively large roof areas of most farm operations. Option for seeking


The viability of harnessing biogas form farms for power generation is being explored and is considered potentially viable for medium and larger regional producers. Identified linkages are the Pork Co-operative research centre (CRC) and Australian Pork Limited (APL).

government rebate assistance for installation of on-farm solar power should be examined. With assistance from the Pork CRC and APL, producers should evaluate the viability of biogas production for their operations. Potential industry project partners for biogas generation should be sourced. Opportunity for seeking bulk power discount on co-operative basis from regional power suppliers.

Transport Currently all feed supplies for the region are supplied to feed mills and producers by road. All pigs are delivered to Booyong abattoir by road. Various road freight transport companies are utilised. Regional road infrastructure is identified as a potential impediment affecting haulage prices. Linkages for transport include regional and non regional transport companies, NSW Roads and Maritime Services, QLD Department of Transport and Main Roads, local councils within the region, Australian Rail Track Corporation Ltd (ARTC) and Casino Rail Freight Terminal Pty Ltd

Potential for sourcing feed supplies by rail once the Casino rail terminal is established. Seek upgrade of regional main haulage roads from NSW Roads and Maritime Services, QLD Department of Transport and Main Roads where necessary.

Labour Labour for the industry is sourced locally and producers advise that availability is not a significant issue. Quality of labour can be an issue. Linkages include local employment agencies and training service providers.

The need for additional training services for farm workers within the region has been identified.

Fuel and gas Produced outside of the region and supplied locally by various companies

Some bulk discounting of fuel and gas supplies may be available on a co-operative basis.

Professional services e.g. Veterinary services

Supplied by a number of regional and non-regional service providers.

Advertising and marketing/ promotion

Producers and value adders provide own advertising and marketing/promotion via various regional and non-regional businesses. APL receives a levy from growers which is used for marketing and promotion. NCMC undertakes marketing and promotion on behalf of it's members Northern Rivers Food Links promotes local product within the region.

In collaboration with existing linkage groups establish a regional branding and marketing/promotion campaign to develop a premium brand and pricing for pork produced within the region. Opportunity for APL marketing levy generated within the region to be used for direct marketing of regional product produced

Packaging and ancillary production items

Supplied via a number of regional and non-regional businesses.

Abattoir fees Regionally produced pigs are processed through Booyong abattoir operated by NCMC. There are no other linkages identified.

Continuation of Booyong abattoir to service regional producers is supported.

Regional produce value adders

There are a number of regional value adders which receive processed pork from the Booyong abattoir and produce quality pork products for regional and non-regional consumers. Product is exported out of the region throughout Australia and internationally. Business and industry support linkages include NSW

Promote regional product and support expansion of existing value adders and new businesses.


Trade & Investment, Small Biz Connect, Department of Industry & Science and Regional Development Australia.

Non-regional value adders

Processed pork product from Booyong abattoir is supplied to a number of main buyers, in particular Campbells in Sydney. A number of producers supply product directly to butchers and restaurants outside of the region.

Opportunity for expanding the produce buyer network.


12 Case Studies

CASE STUDY NO. 1 BYRON BAY PORK Byron Bay Pork is a regional pork producer with breeding and grower operations in the Byron Bay hinterland and at Tenterfield with four (4) farms in total. The company is owned and operated by the Singh family and has been in production for over 35 years. The company has specialised in breeding rare breeds of Berkshire and Berkshire-cross pigs specifically to enhance the marbling characteristics of the meat, producing a superior and premium product. All meat produced is hormone and antibiotic free. The pigs are hand raised in Eco Pens incorporating best work practices and animal health standards so to guarantee hormone and antibiotic free, premium quality and taste. All pigs produced are slaughtered through the Booyong abattoir. In addition to the selective breeding and growing of premium pigs, Byron Bay Pork has been extremely successful in establishing its own niche markets whereby it retails the premium product to specialty butchers and directly into restaurants within the region and in Sydney, Brisbane and Melbourne. A key component of the company's marketing strategy has been the promotion of the positive image the region has, with consumers who identify the region as being 'clean and green' with associated superior product. This has assisted the company in obtaining premium prices for its products and reducing reliance on more generic markets. Promotion of the work practices employed and the animal welfare standards employed is another key marketing strategy. In line with industry standards, Byron Bay Pork has recently refurbished its main breeding facility to sow free stalls. Byron Bay Pork supports a co-operative branding and marketing approach for regionally produced pork so as to further promote the premium products produced within the region coupled with the recognition of the 'clean and green' sustainable status the region enjoys amongst consumers.


CASE STUDY NO. 2 LINTON FARM, NIMBIN Matthew and Tracy Linton operate a medium sized piggery (550 pigs) near Nimbin NSW. The operation originally consisted of a single grower shed approximately 30 years of age. In 2013 the Lintons sought to redevelop the piggery with the construction of a new piggery shed incorporating state of the art automatic feeding systems and animal husbandry technology. A development application (DA) for the proposed upgrade was prepared and lodged with the Lismore City Council. During the public exhibition process for the DA neighbours complained to Council that the 30 year-old piggery was notorious in the area for its smell, and also cited reports of contamination to a local waterway. Council was satisfied that the proposed upgrade was positive, not only in terms of improving animal welfare and production techniques, but also in terms of improving the general amenity of the area and reducing any potential for environmental impacts. The application was approved and the new facility has been constructed and is now fully operational. The development application process was involved and the Lintons are happy with the end result. They stress the importance of having the development application and supporting assessments appropriately prepared and submitted. They are confident that the upgraded facility will assist them in terms of increasing productivity and product quality. The upgraded effluent management system ensures that the environment of the locality is protected. Since the redevelopment there have been no complaints made by residents of the locality.


CASE STUDY NO. 3 SMITH'S ALL NATURAL MEAT COMPANY, TWEED VALLEY Lee and Peter Smith own and operate the All Natural Meat Company within the Tweed Valley. They specialise in producing premium free-range pork from specialist breeds, including Berkshires, and they have established niche markets for their product. Their business model incorporates direct marketing of their product to consumers and their business has grown as a result to the extent whereby demand exceeds supply. Their breeding regime includes rearing in natural pens and they have no piglet mortality as a result. They incorporate custom-made grain feed with no added meat meal. In addition to the free-range nature of their operation the Smiths have incorporated two (2) additional niche markets being agri-tourism and the operation of the processing and direct sale of their products. The agri-tourism side of the business originated from the growing demand for purchasers to be able to view the farming operation and be satisfied of the best practice sustainable animal husbandry and animal welfare being employed leading to the superior product. They enjoy attracting significant premium prices which justify the costs associated with free-range production and their control of production from breeding, through growing and to the point of sale. As such they have total control of their premium product from paddock to plate. Consumers benefit from the ability to purchase direct from the 'farm gate' and through various farmers markets. The combined operation is an excellent example of the potential for environmentally sustainable farming within the region and the marketing and promotion of the positive image the region benefits from consumers.


13 Action Plan

13.1 Introduction

The Strategic Action Plan is divided into the following sections: 1. Grain Supply and Prices; 2. Power Costs; 3. Pricing and Marketing/ Promotion including Co-operative Opportunities; 4. Training; 5. Succession Planning; 6. Northern Co-operative Meat Company; 7. Social and Environmental (regulatory) Pressures; 8. Governance and Compliance Risk Management; 9. Value Adding; 10. Animal Welfare and Quality Assurance; 11. Research and Statistics. It is acknowledged that these sections are interrelated and as such each cannot be considered in isolation. Within each section, a number of initiatives (strategic actions) have been identified. Each of these includes identified target timeframes (within the 10 year life of the Plan) as well as lead and support agencies and groups best positioned to undertake the actions. Timing for each action is shown as either: Short Term - Within 12 Months of Adoption of this Plan Medium Term - Between 12 months and 3 years of adoption of this Plan Long Term - Between 3 years and 10 years of adoption of this Plan

13.2 Discussion

1. Grain Supply and Prices The majority of growers interviewed during the preparation of this draft plan identified grain costs as a significant issue. In terms of percentage, grain and feed additives account for 50 to 60 per cent of all production costs. The majority of growers purchase bulk grain through regional suppliers. Additives are sourced generally from the Brisbane region. There are limited local bulk grain suppliers


which can affect the ability for competitive purchasing and makes producers susceptible to variable grain prices. There are proposals for additional regional suppliers including the Casino Rail Freight Terminal due for construction 2015/2016, which could lead to additional competition within the region. At the producer workshop options for seeking a co-operative approach to achieving a bulk discount in grain prices, perhaps fixed for a period (e.g. 12 months) was discussed. Support for meat meal discounts provided by NCMC to members was also raised. It is recommended that NCMC be proactive in seeking a bulk discount in grain prices for regional pork producers through the regional grain suppliers. It is also recommended that NCMC hold discussions with the proponents of the proposed Casino Rail Freight Terminal to discuss future options for bulk grain purchases and handling on behalf of the regional producers. The industry may also be in a position to support grain production within the region with a preference for supply from within the region where prices are comparable to externally produced grain. 2. Power Costs Power costs for producers within the region amounts to approximately 8 per cent of total production costs. Options for reducing the costs of power supply should be examined. Options considered and discussed with producers include: a) Seeking a bulk discount by forming a buyer group b) Exploring the viability of on-site renewable energy (biogas) The Pork Co-operative Research Centre (CRC) has published a paper on the Bioenergy Support Program 2013. The paper evaluates a number of 'real piggery scenarios' within different states to determine the viability of incorporating biogas retention and use. The following table from the CRC paper identifies potential biogas energy production for various sized piggeries:


Australian Pork Limited (APL) has advised that it can assist producers with information on potential bioenergy including free advice and initial feasibility work. APL has developed a Code of Practice for On-Farm Biogas Production and Use in Piggeries (April 2015). Solar power provision may provide another alternative, however short-medium term viability may depend upon government support to assist producers with initial installation and start up costs. 3. Pricing and Marketing/ Promotion including Co-operative Opportunities Australian pork already has a positive (green) image with other countries, especially the growing Singaporean market. The Booyong abattoir is seen as a premium facility for pork processing by Asian buyers. Building upon this reputation presents an opportunity for developing a regional brand for Northern Rivers Pork, similar to other successful regional brands. The brand should promote the 'clean and green' image of the region and the pork product. A marketing strategy should be developed around the brand targeting the domestic and international markets with a key focus being to attract premium pricing for the product and to increase market share options. There is also opportunity to build upon the local brand by assuring consumers that producers follow 'good agricultural practice.’ Linkages with existing regional producer groups such as NSW Sugar Milling Co-op, NORCO, Macadamia Society, Clarence River Fishermen's Co-op and the Ballina River Fishermen’s Co-op should be explored. NSW Department of Primary Industries has developed a relationship with the Governor of NSW regarding the serving of NSW produce at Government House. There is opportunity to explore the supply and promotion of regional pork products through this relationship.


4. Training Increased training opportunities for growers and farm employees within the region have been identified as a key requirement for ongoing development of the pork industry. Growers specifically identified the benefits in having courses available in Pork Production Certificate III, quality assurance, succession planning, product branding and marketing and environmental regulations. With the exception of the Certificate III course, the above listed subjects could be run as short courses provided by a regional training provider such as North Coast TAFE. The co-ordinator for the agricultural courses at North Coast TAFE Wollongbar was consulted. Advice received is that TAFE currently delivers a Certificate III course in Pork Production as well as a Statement of Attainment in Pork Industry Course. Both of these have been offered through the Wollongbar campus but have not been well promoted resulting in sporadic running of the courses. The practical component for the Certificate III course has been run from Sydney, as a suitable property for practical teaching hadn't been identified within the region. TAFE would be interested in considering opportunities for specialist courses such as quality assurance and environmental regulations. Tocal College (NSW Department of Primary Industries) provides training in various aspects including skills recognition, farm business and management skills and a Diploma of Agriculture. The NSW Department of Primary Industries employs a Development Officer Pigs who assists producers with expert advice including advice on skills needs. A number of strategic actions aimed at increasing the availability of training within the region have been developed. 5. Succession Planning A number of growers interviewed advised that they are considering exiting the industry in the short term. Other growers advised that they would like assistance in developing a succession plan either for family members or for employees. NSW Sugar has developed a model for succession planning for cane farms including options for buying farms and leasing back and co-operative farming. It is recommended that succession planning be addressed via traineeships for beginning farmers, provision of planning advice including farm management and ownership options, delivery of a suitable course in succession planning and by development of a mentoring program to assist beginning farmers. 6. Northern Co-operative Meat Company The Northern Co-operative Meat Company is a major component of the regional pork industry. The Booyong abattoir receives and processes the vast majority of pigs grown within the region.


The abattoir also receives and processes pigs from outside of the region in particular from southeast Queensland. Annual pig throughput at the abattoir is approximately 200,000 per year (i.e. approximately 4,000 per week). The abattoir has the assessed potential for processing up to 6,000 pigs per week based upon plant capacity and the NSW Environmental Protection Authority (EPA) licence requirements. Of the pork produced through the abattoir, approximately 10 per cent is boned for the domestic trade, 20 per cent exported as carcasses with the remaining 70 per cent sold domestically as carcasses. Growers have advised that the Booyong abattoir is well respected by growers and buyers, and has a high reputation for quality pork processing. The Northern Co-operative Meat Company has a lead role in the supply chain for product and in providing support for member growers. It has, through its membership base, strong buying and pricing powers. There is an opportunity for increased regional pork supply to be processed at Booyong under the current EPA license production limit. There may be opportunity for the future expansion of the abattoir at Booyong should this be commercially appropriate in the future. In the event that pork production increases within the region and that demand for processing at the abattoir exceeds capacity, it is recommended that the Co-operative consider the option of priority provisioning of regionally produced pigs through the abattoir. A number of strategic actions for the Northern Co-operative Meat Company to consider have been provided including promotion and product branding, labeling, and evaluation of opportunities for increased throughput at the abattoir. 7. Social and Environmental (regulatory) Pressures The Northern Rivers region has a number of environmental issues, which can present challenges for pork producers. In particular, the high rainfall, relatively warm conditions with high humidity, the sloping topography and drainage networks upon many of the farms combine to create the potential for environmental degradation, particularly water degradation. Growers manage this by maintaining good standards of environmental care with respect to the various farm practices in particular effluent management, treatment and irrigation. The region has a relatively high population density and there is increasing community awareness within the region of the need for maintaining environmental standards. There is strong community concern when the environment is adversely affected. Residents within proximity to a farm can be subjected to a number of impacts including noise, dust, traffic and odour. Effectively managed, these impacts can be minimised and lead to an absence of complaints against a farming operation.


At the national level, Australian Pork Limited has developed a National Environmental Sustainability Strategy for the Pork Industry (2010 - 2015). This Strategy seeks to ensure that "the Australian pork industry is dedicated to producing environmentally sustainable pork, which involves fostering a long-term competitive pork industry in Australia while maintaining our natural resources and the environment for future generations.” Growers can address increasing community expectations and regulatory requirements regarding social and environmental issues through continued adoption of 'best practice' environmental management of their activities. Adoption of best practice animal welfare is also important. Promotion of the 'clean and green' image for pork production within the regional community can assist in raising awareness of the environmental standards being adopted by growers. APIQ Certification requires and verifies that producers follow 'good agricultural practice' (best practice) for management, food safety, animal welfare, biosecurity, and traceability and will be revised as on 1 July 2015 to include environment and transport standards. Requiring all producers to be certified gives assurance to all stakeholders that appropriate systems are in place on-farm. Best practice guidelines have been developed for the pork industry including the National Environmental Guidelines for Piggeries (2010), Second Edition (revised) and the National Environmental Guidelines for Rotational Outdoor Piggeries, 2013. A number of fact sheets and booklets have also been prepared to complement the guidelines. It is recommended that producers with high level of environmental control become 'best practice' demonstration sites. A number of producers have raised the potential benefit of having environmental management guidelines developed specifically for the region. It is therefore recommended that the existing environmental guidelines for the industry be reviewed and if deemed beneficial, be used to as the basis to develop best practice guidelines for environmental management for piggeries for the region. 8. Governance and Compliance Risk Management From industry consultations it is evident that there is concern regarding the planning and regulatory provisions, which affect the redevelopment of an existing farm or the establishment of a new farm. Planning controls relating to piggeries are complex and the process of obtaining development consent and associated licenses is usually a lengthy and potentially expensive process. Various NSW State agencies, in particular the NSW Department of Primary Industries and the Environmental Protection Authority, have a role in assessing development applications for piggeries and in providing advice to Councils. Australian Pork Limited (APL) has advised that it also provides advice and guidance for intending developers and including aspects such as the preparation of environmental management plans.


Within NSW there are a number of agricultural, forestry and mining sectors which benefit from planning guidelines aimed to assist intending developers in preparing and lodging applications and to also assist Councils and State agencies in assessing and determining such applications. It is recommended that:

§ NSW Department of Primary Industries to provide technical assistance with undertaking environmental audits;

§ NSW Department of Primary Industries to prepare planning guidelines for producers interested in redeveloping or upgrading infrastructure to assist with preparing development applications, assisting councils in assessing applications and issuing planning approvals. This can be done through specialising the existing DPI document 'Preparing a Development Applications for Intensive Agriculture in NSW (2006);

§ NSW Department of Primary Industries to offer assistance to local councils in assessing development applications for new or redeveloped/expanded piggeries.

9. Value Adding Within the region there are a number of value adding businesses which receive local pork and provide a range of commodities such as smallgoods, hams, bacon and the like. These businesses tend to produce premium products and promote the fact that they use quality pork from the 'clean and green' North Coast region, Byron Bay area etc. This is positive and establishes consumer awareness of the quality of product within the region. There is opportunity to facilitate growth and development within the allied industries of pork processing. These opportunities should be identified as part of the development of a marketing strategy. A number of strategic actions have been proposed to assist with regional branding and promotion and development of niche markets. 10. Animal Welfare and Quality Assurance Producers are required to meet industry and consumer demands relating to animal welfare and quality assurance. The requirement for growers to operate with sow free stalls from 2017 is a significant issue with the majority of sow sheds requiring retrofitting to meet the standards. Growers consulted who have undertaken the modifications advised of considerable costs, not only as a capital cost but also lost production during the shed fit outs and the reduction in shed capacity. One grower consulted has recently retrofitted an existing sow shed for sow free stalls at a cost of approximately A$15,000 per stall. Another grower has increased the size of stalls by removing every second one (thereby doubling the size of the stalls). This reduces the capacity of the sheds. Substantial cost will be incurred in the event that new shed(s) are proposed in order to regain lost capacity. Industry and Investment NSW has prepared an Animal Welfare Code of Practice for Commercial Pig Production (Dec 2009) and the adoption of this by growers is recommended.


A number of growers have indicated a desire for training in relation to animal welfare and quality assurance. This is addressed within the training section of this report. The Pork Co-operative Research Centre (CRC) is involved in research regarding animal welfare with the aim of maintaining local production of high quality food for a reasonable price and return on production capital invested, without negatively impacting pig welfare, the environment or the health of the consumer.

In addition to establishing additional training options within the region, it is recommended that Australian Pork Limited be requested to develop an information package for growers promoting best practice in animal welfare and quality assurance. Australian Pork Limited should also be approached to hold information sessions relating to animal welfare and quality assurance within the region. 11. Research and Statistics In developing this draft strategic plan it became evident that there is a lack of currently available data on the industry specifically related to the region. Details on all growers were difficult to obtain, as was data relating to pig numbers, the breakdown of numbers via classification, breeds per farm. It is recommended that Local Land Services be requested to maintain statistics on all pork production within the region including producer numbers, types of farming operations and divisions of pig registrations based upon pig age/classifications.


13.3 Strategic Actions

Grain Supply and Price Issues

§ Growers are currently responsible for purchasing their own grain through regional or external suppliers;

§ There are proposals for additional regional suppliers including the Casino Rail Freight Terminal due for construction 2015/2016, leading to additional competition within the region;

§ There is potential for a co-operative approach to securing a bulk grain discount; § NCMC is well placed to act on behalf of regional growers in brokering a bulk supply

arrangement. Strategic Actions

1. Investigate using co-operative buying power a bulk discount in grain purchase price. 2. Support meat meal discounts for NCMC members.

Timing Short term Lead Organisation

§ NCMC

Support Organisations § NSW Trade and Investment


Power Costs Issues

§ Power supply has been identified as a significant production cost for individual growers; § There is potential for a co-operative approach to securing a power discount for growers.

Strategic Actions 3. Investigate using co-operative buying power a bulk discount in power purchase price. 4. Growers to form a collective group under an existing auspice e.g. NCMC or as a

separate buyers group. 5. Investigate on-site renewable energy (biogas) options for producers as a means to

reduce power consumption.

Timing Short term Lead Organisations

§ NCMC



Product Pricing and Marketing/ Promotion Issues

• Australian pork already has a clean and green image with other countries particularly the growing Singapore market;

• Booyong has high reputation in Singapore.

Strategic Actions 6. Establish through NCMC, Northern River Food Co-op or as a separate group a

marketing co-operative aimed at promoting the image of Northern Rivers Pork. 7. Develop a Regional Brand for Northern Rivers Pork to attract premium pricing. 8. Actively promote the 'clean and green' status of NC Pork for the domestic and overseas

market. 9. Investigate strategic co-operative branding alliances with other regional producers

including NSW Sugar Milling Co-op, NORCO, Macadamia Society, Clarence River Fishermen's Co-op, Ballina River Fishermen's Co-op.

10. Request Australian Pork Limited (APL) to allocate marketing levy received within this region to the regional branding/promotion (clean and green image).

11. Build upon existing 'clean and green' image from successful regional companies such as Bangalow Sweet Pork, Byron Bay Pork and Salumi Meats.

12. Promote local product through all regional restaurants and resorts - increase market share.

13. Develop a regional marketing strategy capitalising on the regional brand. 14. Investigate opportunities and benefits of developing food tourism and agri-tourism

promoting local growers, processors and value adders. 15. Promotion of regional pork product at suitable trade shows and events. 16. NSW Department of Primary Industries to liaise with the Governor of NSW to explore the

opportunity for the serving of Northern Rivers pork product at Government House, building upon the current initiative to serve NSW regional product at Government House.

Timing Short - Medium term Lead Organisations

§ NCMC § Regional Development Australia § NSW Department of Primary Industries

Support Organisations § NSW Trade and Investment § Northern Rivers Food


Training Issues

§ Need to encourage new farmers (beginning farmers) to enter the industry; § Ensure appropriate training opportunities for people entering the industry.

Strategic Actions 17. Approach North Coast TAFE to run Certificate III in Pork Production course from

Wollongbar campus. 18. Approach North Coast TAFE to run Statement of Attainment in Pork Industry

Stockperson Skill Set course from Wollongbar campus. 19. Advertise and promote relevant training courses to increase awareness within the

regional industry. 20. Investigate possibility of additional courses such as environmental regulations, product

branding and marketing and liquid waste management. 21. Develop through regional training providers a separate short course in quality assurance

for pork producers. 22. Seek industry involvement in identifying Regional traineeship opportunities. 23. Gain support from a regional grower(s) for the holding of the TAFE Certificate III

practical component within the region (currently held in Sydney). 24. Seek support from local councils and Department of Primary Industries for the

preparation and conducting of a training course for council development planners and assessing officers to assist in their understanding of issues associated with establishing new piggeries or redeveloping existing piggeries.

Timing Short Term Lead Organisations

§ NCMC § North Coast TAFE § State Training Services

Support Organisations § NSW Trade and Investment § NSW Department of Primary Industries


Succession Planning Issues

§ Need to provide succession planning advice and assistance for regional growers planning to exit the industry;

§ As the industry grows within the region and long-term security of profitability increases there will be increased incentives for family members or beginning farmers to take over existing farms.

Strategic Actions 25. Explore the opportunity for traineeships for beginning farmers. 26. Provide government assistance in succession planning through the provision of advice in

business planning, transition in ownership options, farm management contracts etc. 27. Seek State Training Services to develop an on-line course in succession planning. 28. Establish a mentoring program to assist beginning farmers. 29. NCMC to Investigate Co-Op farming for pork, based on the 'Promoting Share and Lease

Farming Model' as developed by NSW Sugar and within the macadamia industry.


§ NCMC § North Coast TAFE § State Training Services

Support Organisations § NSW Trade and Investment § NSW Department of Primary Industries


Northern Co-operative Meat Company Issues

§ Opportunity to build upon the high reputation which Booyong abattoir has for quality pork processing particularly for the growing Asian market;

§ Lead role in the supply chain and grower support; § Strong buying and pricing powers; § Opportunity for increased regional supply to Booyong abattoir capacity; § Potential for expansion of Booyong abattoir to increase throughput capacity; § Potential for Co-op to operate grower facility.

Strategic Actions 30. Promote 'Booyong Brand' for pork in conjunction with regional brand and actively market

to domestic and international market. 31. Evaluate opportunities for increase in production license quota; consider environmental

and regulatory issues in doing this. 32. Actively assist in developing regional brand for Northern Rivers Pork. 33. Investigate the need/demand for on-farm extension officer assistance, perhaps costs

shared between NSW DPI and industry. 34. NCMC, in considering its own succession plan to take into consideration the

opportunities and benefits of expanding the production capacity at Booyong abattoir. 35. Evaluate opportunities for Co-Op owned or operated farms to increase investment and

scale in the Northern Rivers pork industry.


§ NCMC



Social and Environmental Pressures Issues

§ The Northern Rivers region has a number of environmental issues which require proper on-farm management;

§ There is increasing community awareness with the region of the need for maintaining environmental standards. There is strong community concern when the environment is adversely affected;

§ Need to ensure compliance with all environmental controls and regulations.

Strategic Actions 36. Encourage 'best practice' on farm management for environmental care. 37. Promote the 'clean and green' image for production within the regional community. 38. Encourage producers with high level of environmental control to become 'best practice'

demonstration site. 39. The existing environmental guidelines for the pork industry be reviewed and if deemed

beneficial, be used to as the basis to develop best practice guidelines for environmental management for piggeries for the region.

40. APL to investigate the viability of re-use of effluent as a commercial product.


§ NSW Department of Primary Industries § NSW Environment Protection Authority § Australian Pork Limited § Local Councils

Support Organisations § Southern Cross University § NSW Trade and Investment


Governance and Compliance Issues

§ Increasing regulatory controls and audit/licensing requirements need to be complied with;

§ Planning controls relating to new piggeries or redevelopment/expansion of existing piggeries are complex. Gaining development consent is usually a lengthy and expensive process;

§ Need to effectively manage environmental impacts and comply with all approval requirements.

Strategic Actions 41. NSW Department of Primary Industries to prepare planning guidelines for producers

interested in redeveloping or upgrading infrastructure to assist with preparing development applications, assisting councils in assessing applications and issuing planning approvals. This can be done through specialising the existing DPI document 'Preparing a Development Applications for Intensive Agriculture in NSW (2006).

42. NSW Department of Primary Industries to offer assistance to local councils in assessing development applications for new or redeveloped/ expanded piggeries.

Timing Medium Term Lead Organisations

§ NSW Department of Primary Industries § Local Councils



Value Adding Issues

§ Opportunity to facilitate growth in the allied industries of pork processing within the region.

Strategic Actions 43. NCMC to assess capacity at Booyong Abattoir to engage more in value adding (increase

the current 10 per cent boned for domestic consumption). 44. Seek processors to adopt regional brand once developed. 45. Develop niche markets to attract premium prices. 46. NCMC to hold regular (1/2 yearly) 'after hours' forums for producers and processors to

increase networking and cohesiveness within the region.

Timing Medium Term Lead Organisations

§ NSW Trade and Investment § NCMC

Support Organisations § Northern Rivers Food


Animal Welfare and Quality Assurance Issues

§ Need to meet industry and consumer demands relating to animal welfare and quality assurance;

§ Need for operation of sow free stalls from 2017.

Strategic Actions 47. Australian Pork Limited to develop information package for growers promoting best

practice in animal welfare and quality assurance. 48. Australian Pork Limited to hold information sessions relating to animal welfare and

quality assurance within the region.


§ Australian Pork Limited

Support Organisations § NCMC


Research and Statistics Issues

§ Lack of currently available data on the industry specifically related to the region.

Strategic Actions 49. Local Land Services to maintain statistics on all pork production within the region

including divisions of pig registrations based upon pig age/classifications. 50. Local Land Services to maintain statics on production numbers, producer numbers,

types of farming operations etc.


§ Local Land Services

Support Organisations

§ NCMC § RDA


14 Review and Implementation

It is recommended that implementation of the Strategic Plan commence upon its adoption. Strategic actions have been divided up into short term (within 12 months), medium term (within 3 years) and long term (3 -10 years). The plan should be reviewed every 12 months to identify the status of each strategic action and to assess the success of each completed action in terms of positive impact upon the regional pork industry. It is recommended that a wholesale review of the strategy be undertaken after 5 years. To facilitate implementation of the Plan it is recommended that a working group be established comprising representatives from NSW Agriculture, Trade and Investment, Regional Development Australia, Northern Co-operative Meat Company Ltd, Local Councils and Australian Pork Limited. The working group should be tasked with progressing key actions and seek industry engagement via establishing regional forums within which specific projects and tasks are canvassed, collaborators identified and project outcomes reviewed.


15 Appendices


APPENDIX 1 LIST OF PEOPLE AND AGENCIES CONSULTED Craig Jenkins - NSW Trade and Investment Simon Stahl - CEO Northern Co-operative Meat Company (NCMC) Fiona Borello - Member Services (NCMC) Kristen Elliot - Manager Booyong Abattoir (NCMC) Stephen Penfold - NCMC - Booyong Abattoir (NCMC) Neil Short - Director NCMC Chris Dockrill - NCMC Rik Whitehead - NSW Department of Primary Industries Jayce Morgan - NSW Department of Primary Industries Tony Abel - Australian Pork Limited Gary Zohrab - North Coast TAFE Phillip Borrow - State Training Services Greg Denelzen - Mondoro Piggery Geoff and Noni Parker John Singh - Byron Bay Pork Damien Dougherty - Bangalow Sweet Pork Chris Magner Peter Smith Tracy Linton N Johnson N Roatz R Haig Wayne Cooke M Bruggy


APPENDIX 2 MINUTES OF STRATEGIC PLANNING WORKSHOP - NORTHERN RIVERS NSW PORK PROJECT HELD ON 24TH FEBRUARY 2015 ATTENDEES NAME ORGANISATION

ROXANNE SMITH NSW INDUSTRY AND INVESTMENT

NEIL SHORT DIRECTOR NCMC

FIONA BORELLO MEMBER SERVICES OFFICER NCMC

GEOFF AND NONI PARKER PRODUCERS

MARTIN DAVIES BEGINNER GROWER

DARRYL ELLIS PRODUCER

ROBERT NAKHLA PRODUCER

WAYNE COOKE PRODUCER

CHRIS DOKRILL PRODUCER

JOHN SINGH PRODUCER

GREG DENIELZEN PRODUCER

STEPHEN FLETCHER CONSULTANT

ISSUES RAISED AND DISCUSSED

§ Group discussion on percentage costs of key inputs for pork production. General agreement that grain cost is approximately 50 to 60 per cent, labour approximately 5 per cent, power approximately 8 per cent and transport approximately 5 per cent;

§ Costs associated with maintenance of aging infrastructure discussed and concern that current price returns for pork does not sustain infrastructure replacement costs;

§ The cost of retrofitting sheds to provide sow free stalls was discussed. A number of growers have already changed to sow free stalls with areas of between 1.8m2 per sow, up to 3m2 per sow;

§ Impediments to increased exports discussed. Without new and expanded markets there is reliance on existing wholesalers such as Campbells. This affords little scope for negotiating prices;

§ There is no protocol for export to large Asian countries;


§ China has a strong demand for Australian product marketed as 'clean and green'. China is only interested in high quality to superior quality meat. Some of the product is exported to China through Hong Kong;

§ One grower advised he cannot supply pigs to China direct and suggested that the NCMC take a lead role in pursuing the Chinese market. Discussion on the need to identify how much increase in supply is required to satisfy the Chinese market;

§ Concern raised that New Zealand can import fresh pork - what if Australia follows? § Recognition that Booyong abattoir has the best kill regime in Australia for the growing

Singapore market; § Growers suggested NCMC look at increasing the capacity at Booyong; § Support for promoting a 'clean and green' status for the region so as to increase the

domestic market as well as the export market; § Support for co-operative marketing and branding for port within the region; § Recommended to explore co-operative alliances with NSW Sugar, Norco and NCMC; § Explore option of co-operative deal for cheaper power and insurance costs; § Government should consider options for providing assistance with capital improvements

via grants, investment packages, low interest rate loans; § Government should provide assistance with producers seeking planning approvals; § The APL levy for marketing should be used on a region-by-region basis. In other words,

the levy money generated from our region should be spent on marketing our region - promote the 'clean and green; image. Change the APL strategic plan to reflect this;

§ Growers should be able to allocate an APL delegate for each region to represent the region;

§ NCMC has a role to market itself as a good processor of pork domestically and internationally;

§ NCMC at Booyong Abattoir is a preferred plant. We need to effectively capitalise in this status;

§ Overriding issue of future farm viability discussed. Possible to address through reducing key costs of grain and power whilst marketing premium product to attract increased prices;

§ QLD (Toowoomba) is able to put through heavier pigs averaging 85 kilograms, This gives growers a higher return as every Kg over normal weight is obtained from reduced feed input (feed to weight ratio). Most sold through Swickers;

§ One grower has a market through a Sydney butcher who will only buy pigs with a maximum weight of 70Kg dressed (whole carcass, head off);

§ Suggestion that the current Northern Rivers Food group would be a good co-operative partner;

§ Discussion on developing a Booyong abattoir brand selling group in addition to regional branding;

§ Suggestion for a short course in quality assurance as staff are being required to become qualified;

§ Labour is not seen as an issue. There is no problem getting labour from within the region;

§ Most grain supplied from outside region. Main grains sourced are wheat, barley and sorghum.

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