Cooperative Research Centre for an

Internationally Competitive Pork Industry

Investing in Australia’s industrial, commercial and

economic growth

Dr Roger Campbell

CEO Pork CRC

Pork CRC Update

• Successfully funded November, 2004

• Pork CRC launched October 18, 2005

• Commonwealth agreement signed and funds available November, 2005

Core program areas

1. More reliable and consistent protein and energy supply

2. Herd feed conversion efficiency

3. Functional pork products4. Education and training

Pork CRC evolution…

Industry driven

Core Participants

Supporting Participants

Bartlett Grains Pty Ltd

WAAPC – Pork Producers Committee

Grainsearch Pty Ltd

Australasian Pig Science AssociationMassey University, NZ

Pork CRC Management• Dr Roger Campbell (CEO)• Mr Michael Crowley (Finance and

Business Manager)• Mr Khalil Jamahl (Office

Manager)• Based at University of Adelaide,

Roseworthy Campus

Pork CRC Ltd Board

• Dr John Keniry (Chair)• Dr Robert van Barneveld (CHM)• Mr Enzo Allara (APL)• Mr Rod Hamann (APF)• Prof Andris Stelbovics

(Murdoch)• Prof Shaun McColl (U of Adel.)• Mr Angus Davidson (NZPIB)• 2 x Specialist Directors

Pork CRC Structure

Pork CRC Ltd Board

Chief Executive

Officer

R&D SubcommitteeAudit CommitteeEducation Subcommittee

Commercialisation Subcommittee Office Manager

Finance and Business Manager

Project Manager

Program Leaders

Subprogram Leaders

Members

R&D Sub-Committee

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

Program Managers

• Program1 – Dr Mike Taverner• Program 2 – Professor Frank

Dunshea• Program 3 -David Henman• Program 4 –Dr Ian Johnson

Sub-program managers

Sub-Program Manager

1a - Grains Dr Mike Taverner

1b – Enhancing nutrient availability

Dr John Black

1c – Alternative ingredients

Mr Andrew Philpotts

2a – Measuring Feed intake

Dr Bruce Mullan

2b - Manipulating Feed Intake

Dr John Pluske

2c - Health Dr Bill Hall

2d - Reproduction/efficiency

Mr Rob Smits

2e –Genetics Dr Mark Nottle

4 –Education Dr John Pluske

$81.4 million in funding

12% 2%

28%

26%

32%

Untied TiedIn-kind staff Other in-kindCRC contribution

Vision

• Reduce FEED COSTS;• Improve HERD FEED CONVERSION EFFICIENCY,

and;• Enhance the capacity to COST-EFFECTIVELY

produce HEALTHY PORK PRODUCTS targeted at niche markets in Australia and overseas

A Cooperative Research Centre to enhance the INTERNATIONAL COMPETITIVENESS of the Australian pork industry by providing and adopting NEW and NOVEL technologies that:

Core program areas

1. More reliable and consistent protein and energy supply

2. Herd feed conversion efficiency

3. Functional pork products4. Education and training

Research Investment Process

• Pork CRC Ltd is a company with clear corporate objectives

• Not a public sector funding body

• Outcomes must be achieved – research will be commissioned to achieve these outcomes as efficiently as possible

Program Funding

Program Proportional Funding ($ 3.6M)

Reducing feed costs. 33%

Improving HFC. 45%

Functional pork products.

12%

Education/Training 10%

To reduce feed costs…

• Dedicated feed grains (barley, triticale)– Local supply– Less variability in price and

supply– Enhanced utilisation

• Greater capacity to measure nutrient content

• Wider choice of ingredients (legumes, co-products)

Subprogram 1a: Innovative grain production

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

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

Subprogram 1b: Quality assessment of feed ingredients

• Adopt, implement, enhance and maintain NIRS calibrations for nutritional quality of cereals developed within the Premium Grains for Livestock Program.

• A wider range of rapid and objective analytical methods for the nutritional quality of feed ingredients.

• Processing and interventions to increase nutrient yield from target grains.

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

• Identification and development of new and novel protein and energy sources based on co-products and/or traditional sources

• Assessment of nutritional potential of candidate protein and energy sources

• Implementation of non-traditional and alternative protein and energy production.

Program 1-More and better grains/enhancing nutrient availability

More appropriate grains for pigs.

Reduce average cost of pig diets by 10%.

Measurement and enhancement of nutrient availability

Increase DE of grains by 1MJ/kg.

To improve herd feed conversion…

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

females

Subprogram 2a: Innovative products and strategies for the measurement of feed

intake.

• A method for the practical and continuous measurement of feed disappearance in groups (ie a pen of pigs at least daily).

• A method for practical and continuous measurement of feed wastage within groups.

• Novel methods for the measurement of individual feed intake within a group.

• Prediction of disease onset through the application of feed intake measurements.

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

intake.

• Novel molecules (eg. cytokines) and feed ingredients (eg. grains, inherent plant compounds, plant extracts) that can be used to manipulate feed intake.

• Elimination of post-weaning growth check and promotion of gut development through stimulation of feed intake.

• Improved carcase quality through manipulation of feed intake in growing pigs.

Subprogram 2c: Alternative therapies, products or strategies to improve pig

production efficiency and reduce mortality of all growth phases.

• Nutritional, genetic, immunological and management solutions for the control and/or reduction of disease and mortality as an adjunct or alternative to existing medication programs in all growth phases.

• Development of nutritional strategies and further enhancement of metabolic modifiers and their mode of application (eg. Paylean, pST) to improve lean tissue deposition.

• Implement novel genetic and reproductive tools and technologies to enhance production efficiency.

Subprogram 2d: Extend and enhance the productive life of the breeding female

through novel management and system design.

• Nutritional, genetic and management strategies to improve the productive capacity of the gilt over her lifetime.

• Intervention strategies to reduce seasonal infertility.

• Practical system for the prediction of the time of ovulation.

Program-2 Improving HFC

Sub-programs Target for HFC

Health

Growth enhancement

Genetics Reduce from 4.2 to 3.6

Reproduction

Measure/manipulate feed intake

Nutrition/management

Other ?

Program 3 –Improved market outcomes

Outcomes Targets

Increased domestic consumption.

Increase by 10%

Increased export of innovative products

Increase exports by 10%

Higher prices (demand) for pork products

Increase price by $1.0/kg.

The Bottom Line

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

Relative business indicators

Business indicator

USA Canada Brazil Australia

COP (A$/kg)

1.48 1.55 1.10 2.20

HFC- CW 3.68 3.80 3.75

4.20

Carcass Wt./sow/yr (kg)

1700 1650 1550 1450

Feed ($/tonne)

200 210 220 270

Comparative costs in USA dollars per kg carcass

weightCountry US

ACanada Braz

ilAustralia

COP$/kg

1.25

1.48 1.00 1.63

Exchange rate

1.0

0.87 0.33

0.73

HFC

• Currently averages 4.2 on a carcass weight basis for Australia (APL Pig check 2004).

• USA average closer to 3.7• Rather scary when feed costs 27

cents/kg.

Causes?

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

Shorter term technical targets and changes for

Australia and their potential impacts.

Potential improvement in profit and flexibility

Current Targets

Price ($/kg) 2.4 2.4

HFC (Carcass) 4.2 3.6

Feed ($/kg) .27 .25

Total feed($/kg) 1.13 .90

Other ($/kg) 0.95 .82

COP ($/kg cwt) 2.20 1.72

Pigs /sow/yr 19 22

Weight (kg) 75 76

Profit/sow ($/yr) 285 1140

My R&D priorities for the Australian Industry (all linked with

training/education)

Priority OutcomesReproduction KPI=wt/sow/year and/or simplify the process

(remove the human).

Grains More feed grains,identify variation in nutrient availability and enhance nutrient availability.

Nutrition Quantify effects of fibre and fat on performance. Lower cost higher income.

Genetics Much more efficient pigs and high reproductive (weaning) capacity.

Health/growth manipulation Health improvement within current systems and enhanced performance.

Feed Intake Ability to measure/predict and manipulate.

Programs/outcomes continued

Priority Outcomes

Functional Pork Products

Products with scientifically supported benefits for humans.Increased national and global demand.

Chances of success

Category Chances of success

Reproduction Low ? without different approaches

Grains and nutrient availability High if coordinated properly.

Nutrition High

Genetics Questionable based on history but definitely a more global solution to constraints

Health/Growth manipulation Low based on history/high

Feed Intake Medium to high

Functional foods Medium

Performance indicators…

• Reduction in on-farm cost of production from $2.05/kg carcase to $1.50/kg carcase (2004 currency values)

• Capture of new niche markets for value added pork products by 2012

Can we get there?…

Program 1a,b,c

$10/kg feed = $0.04/kg carcase0.1 feed conversion = $0.04/kg carcase

Local supply ($0.12), more accurate diet formulation ($0.04), greater energy yield ($0.08), alternative ingredients ($0.12)

Program 2 a,b

Reduced feed wastage ($0.06), strategic medication($0.04), better summer growth ($0.05), reduced autumn fat ($0.03), reduced weaning growth check ($0.05)Program 2 c,d

Reduced medication costs ($0.02), improved growth and feed conversion ($0.15), increased lifetime productivity ($0.07), reduced seasonal infertility ($0.05), measurement of ovulation time ($0.03)

$0.36

$0.22

$0.32

QAF - Realisation of outcomes…

• 50% increase in production

• 500% increase in Japanese exports

• 10% reduction in imports

• 500 extra regional jobs

Industrial, Commercial and

Economic Benefits of the Pork CRC

Industrial• Increased exports• Increased domestic supply• Reduced impact from drought,

exchange rate fluctuations and imports• Industry expansion• Job creation• Improved return on existing investment• Strengthened rural sector

(Source: ABS)

60

80

100

120

140

160

180

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

Indexed G

VP (%

95/9

6)

Poultry Dairy Pork

Comparative growth…

Growth potential of key Asian pork markets (2004-2012)

Country Predicted increase in net imports

(tonnes)

% Change

Japan 173,000 15

China 406,000 222

Philippines 107,000 357

Australia’s 2003 exports = 62,000t worth $221m

(FAPRI, 2003)

Commercial• Product/process focussed

R&D programme• High commercial relevance• Applications extend beyond

the pork industry– Plant varieties– Measurement of ovulation– Measurement of feed intake– Delivery of functional

nutrients

Economic• Conservative estimate of

economic benefit– $AUD235 million per annum

• Additional economic benefits:– Grains industry– Other livestock industries– Commercialisation of products – Health/nutrition sectors

Key strengths…

• Most consumed meat in the world• Capacity for growth• Bid based on industry need• Cohesive industry• Competitors collaborating• Contributes to three national research

priorities• Component of industry restructure plan• Significant investment in the CRC

($11.2 million) at a time of poor returns

Conclusions

• Pork CRC operational and ready to deliver

• Strong support from government and industry

• Outcomes will have a significant impact on the competitiveness of the Australian pork industry

Supporting Information(if required)

Core participants

• Australian Pork Farms Group ($50k/$100k)

• Australian Pork Ltd ($750k/$88k)• QAF Meat Industries Pty Ltd

($70k/$2m)• The CHM Alliance ($50k/$300k)• NZ Pork Industry Board

($50k/$100k)• Murdoch University ($50k/$400k)• University of Adelaide ($100k/$450k)• University of Sydney ($200k/$1m)

Supporting participants

• NSW Agriculture• DPI Victoria• Agriculture WA• QDPI• SARDI• Alltech Biotechnology

Pty Ltd• Feedworks Pty Ltd• GRDC• Bartlett Grains Pty Ltd• WA APC Pork

Producers Committee

• Grainsearch Pty Ltd• Elanco Animal Health

Pty Ltd• Ridley Agriproducts Pty

Ltd• APSA• University of

Queensland• Betterblend Stockfeeds

Pty Ltd• Kemin Industries (Asia)

Pte Ltd.

Program 3: Implement nutritional and genetic strategies to produce pork and pork

products with functional food properties.

• Fresh pork products ready for retail with specific human health benefit properties.

• Omega 3, CLA, Selenium• Discovery within raw materials.• Genetic strategy to change fatty acids.

• Value added pork products with increased functionality benefits

• Asian-style functionality benefits• Incorporation of well-recognised or

demonstrated functional food ingredients

• Assessment of pork and pork products for functionality using accepted models.

Program 4: Capacity Building

• Training of PhD students• Honour’s/summer scholarship

programs/course work programs

• Short courses• Post-doctoral programs• Technology transfer via

existing APL channels and APSA