Australian Pork Limited - STRATEGIC PLAN 2020-2025
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Australian Pork Limited S T R A T E G I C P L A N 2 0 2 0 –2 0 25
CONTENTS
At a glance 4 Strategic Theme 1:
Market and product differentiation 18
Message from the Board 6 Diversity of markets and products
Quality consumer eating experiences
Executive Summary 8
Valuable provenance of Australian pork
Who we are 10
Strategic Theme 2:
Strategic planning context and themes 12 Manage volatility for viable farms 20
Timely relevant through-the-chain information
The strategic themes 16 (Data Utilisation)
Reduce cost of production and processing
Diversified pig business extension opportunities
Strategic Theme 3:
Drive consumer demand 22
Maintain domestic fresh demand
Grow domestic demand
Grow targeted international demand
Strategic Theme 4:
Leading community social licence 24
Biosecurity leadership
Climate friendly farming
Leaders in animal care
Leaders in human nutrition
Industry visibility
Strategic Theme 5:
Building industry shared vision 26
Producer relations (shared values)
Technology adoption
Organisational effectiveness
Australian pork industry performance tracker 28
Appendices 30
A balanced R&D portfolio
Industry assumptions 2020-2025
Financial performance 2020-2025
Pork industry operating environment
and situational analysis
National and rural research
and development priorities
Collaboration
Corporate governance
and compliance statements
AT A
GLANCE Australian Pork Who we are
Limited Strategic our purpose Audacious vision and goal
Plan 2020-2025
is to enable Australia’s preferred choice protein;
a thriving Sustainably adding $1 billion
pork industry to farm gate value by 2025
Consultation Key industry our headline Culture
we are the • Human approach to producer relations
achievements to date progressive pork
organisation
• Proactive by nature, reactive by exception
• Whole of APL thinking
16 stakeholder
engagement
workshops
made fresh 35% what we do Values
pork more increase in domestic • Effective Marketing
popular pork consumption • Proactive Policy
• Results Driven
• Team Players
• Challengers
• Future Focused
• Impactful Research
APL staff
engagement
workshop
grown $5.3 billion
the
industry (from $3 billion in 2012)
through increased productivity Strategic Themes
APL Board
engagement
workshop
reduced piggeries now use 60%
environmental less carbon, as well as
impact many generating electricity
through on-farm waste
Key Priorities market and
product
manage
volatility for
drive
consumer
leading
community
building
industry
differentiation viable farms demand social licence shared vision
knowledge minimise cost of environment
management processing and and climate Diversity of Timely relevant Maintain domestic Biosecurity Producer relations
production change markets and through-the-chain fresh demand leadership (Shared Values)
products information (data
utilisation)
Grow domestic Climate friendly Technology
Quality demand farming adoption
market social licence reduced consumer eating Reduce cost of
diversification to operate volatility
experiences production and
processing Grow targeted Leaders in Organisational
international animal care effectiveness
Valuable demand
provenance of Diversified
Leaders in
Australian pork pig business
human nutrition
product industry innovation in extension
opportunities
diversification shared values health and Industry visibility
convenience
MESSAGE
FROM THE creating a
progressive
BOARD
THE BOARD HAS COMMITTED
pork
T O C R E AT I N G A P R O G R E S S I V E
O R G A N I S AT I O N T H AT PA R T N E R S
organisation
WITH FARM ERS AN D OTH ER KE Y
S TA K E H O L D E R S T O B E T T E R D E L I V E R A
T H R I V I N G P O R K I N D U S T R Y.
The strategic planning APL has been supporting activities to APL will contribute to the delivery of As we begin on the next five-year
advance the Australian pork industry a thriving pork industry by focusing path for our industry, we would like to
consultation approach for
for almost twenty years. on five strategic themes: thank our stakeholders – producers,
2020-2025 was loosely • Market and product differentiation processors, retailers, governments
During the last ten years, some of
inspired by the adage that the big industry achievements have • Manage volatility for viable farms
and other key stakeholders – for
if you do something the been: • Drive consumer demand
their active participation in the
consultation process.
same way as before, you’ll • Leading community social licence
get the same results. We look forward to continuing to
35%
• Building industry shared vision.
made fresh progress the future of pork with
As such, APL deliberately pork more The focus for the first year of this you all.
took a different approach popular increase in domestic
fresh pork consumption
strategic plan will be biosecurity
(particularly regarding an ASF
On behalf of the APL Board,
to the consultation, asking readiness plan), developing data
stakeholders to identify and analytical capability, a robust
R&D plan, ensuring structural fit and
possible futures and how people capability, clarity of industry-
those futures might be
created or avoided. grown $5.3 billion wide perspectives on key issues,
knowledge management, producer
the (from $3 billion in 2012) engagement, social licence, market
The conversations and feedback industry through increased productivity testing and clarification of the eating
ANDREW BAXTER
Chair
provided during the consultation experience.
phase drove the evolution of Above all, APL will continue to
APL’s vision for pork, from being “a develop a culture underpinned by
uniquely contemporary part of our values that will ensure sustainable
food industry” to pork becoming the piggeries now use 60% less
“preferred protein choice”. reduced carbon, as well as many
progress and delivery of valuable
and relevant industry outcomes.
As such, the Board has committed
environmental generating electricity through
to creating a progressive pork impact on-farm waste
organisation that partners with
farmers and other key stakeholders
to better deliver a thriving pork
industry.
improved encouraged and educated
animal industry to voluntarily phase
welfare out gestational sow stalls
6 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 7
These
a targeted priorities were
EXECUTIVE
SUMMARY
five-year determined
plan through
extensive
consultation
with
Australian Pork Limited APL operates on a five-year strategic
planning cycle. This plan is the key
This strategic plan outlines each
theme's supporting programs,
stakeholders
(APL) is the services
planning document that will guide key result areas and the enablers
body for Australian pig APL’s investments for the period required to deliver the strategic
producers, performing 2020–2025. This plan specifically plan. Delivery of the strategic plan
marketing activities to targets market and product will be enabled with increased
differentiation, better management use of technology, improved
improve the demand for
of market volatility, driving consumer communications and knowledge
Australian pork, research demand, social licence and enabling transfer initiatives; and constant
and development to viable productive farms. realignment of APL’s projects with
make the industry These priorities were determined
industry.
more competitive, and through extensive consultation with Annual operating plans will outline
representing industry to levy payers, the Commonwealth, the the annual levels of investment
supply chain, industry representative in projects designed to achieve
ensure that government bodies, other RDCs, and other key the outcomes for each program
and regulators have all of stakeholders. and annual reports will review and
the necessary information During the consultation process APL
monitor APL’s performance in the
for successful policy considered and sought feedback
specified key result areas and
delivery on APL’s revised purpose: to
outcomes readily available. on the strengths, weaknesses,
partner with farmers to better deliver
opportunities, threats and long-term
a thriving pork industry.
trends in the Australian pork industry.
This resulted in a new purpose for
APL – to enable a thriving pork
industry – and the development of
five Strategic Themes:
• Market and product differentiation
• Manage volatility for viable farms
• Drive consumer demand
• Leading community social licence
• Building industry shared vision.
8 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 9
our purpose
Australian
WHO
WE ARE is to enable
Pork
a thriving
pork industry
Limited
the progressive pork our vision and goal
organisation Australia's preferred choice protein;
sustainably adding $1 billion to
farm gate value by 2025
our our what
culture values we do
• whole-of-APL • results driven • effective marketing
thinking – say what we’ll do; – measured consumer insight,
do what we say; prove it creativity and collaboration
• proactive by which results in sales growth
nature, reactive by • challengers over time.
exception – courageously question
• proactive policy
to actively learn
• human approach to – shaping an environment that
• team players stays ahead of community
producer relations expectations whilst remaining
– one team, shared dreams
safe and practical for producers.
• future focused • impactful research
– position for tomorrow’s
– making a difference to all
needs today
Australians through learning
and sharing new ways to build
revenue and reduce costs
and risks.
10 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 11
S T R AT E G I C
PLANNING the
CONTEXT AND
THEMES consultation The key findings from
process
stakeholders were that the
investment areas of most
benefit to industry were:
knowledge minimise cost of environment and
management processing and climate change
The development of this Producers want a single source of production
truth for innovation in marketing and
Strategic Plan involved
research, leadership, advocacy and
an extensive stakeholder information regarding industry trends
consultation process, in animal welfare, biosecurity and
starting from first principles markets. Producers want accurate
market social licence reduced
and involving stakeholders whole-of-industry data to inform
their business decisions. They diversification to operate volatility
along the entire supply want a representative body which
chain, as well as industry delivers on its promises and uses
stakeholders such as its resources to increase demand
government. and production opportunities for
the industry and ensure funding is
product industry innovation in
As levy payers, Australian pig available to help the industry.
diversification shared values health and
producers are APL’s primary The consultation process also convenience
stakeholders. As the industry grows confirmed that Commonwealth
and evolves over time, so do the and State governments both have
needs of these stakeholders, vested interests in the Australian
although – through this consultation pork industry, due to the varied
process – it has been shown that contributions the industry makes to
their core requirements remain the the community, whether through job
same. creation, food security, environmental
Producers expect responsiveness, impact or the economy. Government
honesty and realistic expectations stakeholder needs have remained
from their industry body. For many relatively constant over time, valuing
producers, their assets are their consistency in issues management,
superannuation, so they want to transparent and proactive
ensure their industry is stable and communications, a unified industry
sustainable, and can deliver a voice, cross-sectoral collaboration
consistent profit to their business. and to maximise their investment
Producers want an industry body to in the industry for returns against
create positive change on a level social, economic and environmental
which individual farms cannot. measures.
12 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 13
S T R AT E G I C
strong
foundations to
PLANNING
CONTEXT AND Australia’s preferred choice protein;
shape the future
THEMES
Sustainably adding $1 billion
to farm gate value by 2025
As a company, APL Knowing what our
exists to fulfil obligations organisation has already
under the Pig Industry achieved provides a strong Market and
Act 2001, which are direction and encourages product
to deliver marketing, a future-focused approach differentiation
promotion, strategic to the next five years, with
policy development and the intent to break new
research and development ground and identify step-
outcomes for the benefit of change opportunities for
the Australian pig industry.
made 35% the industry. Manage
fresh pork volatility for
APL has been delivering these
more increase in domestic pork
To enable this vision, the strategic viable farms
benefits since 2000, when, at popular consumption, from fourth to
second most popular meat planning consultation process
the direction of industry, APL involved levy payers, the
was established to combine the Commonwealth, the supply chain,
functions of the Pig Research industry representative bodies, other
$5.3 billion
and Development Corporation, RDCs, and other key stakeholders.
Pork Council of Australia and the grown Drive
Australian Pork Corporation into the
The consultation considered and
consumer
one company.
industry
(from $3 billion in 2012) through
increased productivity
sought feedback on the strengths,
weaknesses, opportunities, demand
threats and long-term trends in the
Australian pork industry. This helped
identify priority areas for investment
for the period 2020–2025, distilled
reduced
piggeries now use 60% less into the five Strategic Themes,
described in detail throughout this Leading
environmental
carbon, as well as many
generating electricity through document and summarised on the community
impact on-farm waste next page. social licence
This process also shaped our
sustainability goals: climate friendly
farming; carbon positive and zero
waste by 2025; recognition as
improved encouraged and educated
animal welfare leaders and an
industry which develops its people. Building
animal industry to voluntarily phase industry
welfare out gestational sow stalls shared vision.
14 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 15
T H E S T R AT E G I C
differentiate
manage
T H E M E S AT
A GLANCE
drive
lead
Industry consultation resulted in five
Strategic Themes that will govern the
build
specific programs under each of those
objectives for APL and the wider pork
industry in order to deliver against the
targeted outcome statements. These are
outlined below and will be supplemented
with an Annual Operating Plan and
reported against in Annual Reports. The
Annual Operating Plan is implemented
through a multi-disciplinary and cross
divisional approach designed to maximise
internal and external collaboration.
market and manage drive leading building
product volatility for consumer community industry
differentiation viable farms demand social licence shared vision
Price realisation. Better anticipate Increased volume Blazing a trail for Building
We add value and market fluctuations demanded; getting Australian agriculture relationships and
increase the price and flatten the more Australian to be sustainably a narrative of being
premium customers peaks and troughs, pork on forks, be celebrated and a progressive,
are prepared to pay making the industry they at home, eating making our informed,
versus other similar more stable. out or overseas. Australian investors informative and
APL will continue
products or markets proud of what unified industry.
domestically and they do.
internationally.
to develop a culture
Diversity of Timely relevant Maintain domestic Biosecurity Producer relations underpinned by
values that will
markets and through-the-chain fresh demand leadership (shared values)
products information (data
utilisation)
ensure sustainable
Grow domestic Climate friendly Technology
Quality demand farming adoption
consumer eating Reduce cost of
experiences production and
processing Grow targeted Leaders in Organisational progress and
delivery of valuable
international animal care effectiveness
Valuable demand
provenance of Diversified
and relevant industry
Australian pork pig business Leaders in
extension human nutrition
outcomes
opportunities
Industry visibility
16 AUSTRALIAN PORK LIMITED
The true
stories we
can tell of
where, how
and why our
provenance
is valuable.
S T R AT E G I C
market and
product
THEME ONE Diversity of markets Quality consumer Valuable provenance
and products eating experiences of Australian pork
differentiation “Nothing else in the world…
not all the armies… is so
powerful as an idea whose
time has come.” —Victor Hugo
“We are what we repeatedly
do. Excellence then, is not an
act, but a habit.” —Will Durant
“Storytelling is the most
powerful way to put ideas into
the world.” —Robert McKee
Most Australian pork is bought Different customers value
Pigs are already used in a for human food. People are different benefits slightly
remarkable array of products, learning organisms. As such, differently. However, there is
Building a broader portfolio to pay more for our product or
from soap, to bread, to people repeat experiences an opportunity to add value at
service than they previously were
of points of difference margarine, road building and they and their loved ones enjoy. every step of the value chain
or they are prepared to pay more
that are more valuable to than other available options. This ammunition manufacture. These truisms mean that people from how that grain grower
some customers than other theme covers market diversification, However, this versatility is not have a “core repertoire” of rotated crops to how the
fully understood and the value meals that they cook at home. supermarket packaged the
competing products or eating experience (the single most
not completely captured by These account for the vast product sustainably, with easy to
important factor in Australian pork’s
services. the producers of this versatile majority of the meals they eat. follow cooking instructions that
biggest market) and the true stories
we can tell of where, how and why raw material. The purpose This repertoire changes slowly any consumer can convert to
Specifically, the points of difference our provenance is valuable. of this program is to uncover however, meals with consistently success. This program is focused
are market driven and we can new opportunities, prioritise good eating experiences are on creating the options for
demonstrate that they add value. existing opportunities and build more likely to arrive in the telling industry’s stories, market
We measure added value through significant businesses in a core-repertoire. The building by market, product by product,
target customers being prepared broader array of markets than popularity of pork recipes in producer by producer and
food. people’s favourite meals is the most importantly, consumer by
goal of this program. consumer.
18 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 19Flattening the extremes
S T R AT E G I C
manage and providing a great
volatility for
THEME TWO
variety of business options
viable farms to select from.
The uncertainty that The intention here is to provide a
great variety of business options
goes with all markets is
for individual commercial entities to
particularly intense with select from. These options include
agriculture. timing in terms of anticipation. They
also include a broader array of
The large numbers of individuals available markets by being more
who get similar commercial prompts cost-competitive globally as well as
at the same time tends to create building on existing capabilities to
booms and busts. This theme is both build revenue and drive social
about flattening those extremes. benefits.
Timely relevant Reduce cost of Diversified pig
through-the-chain production and business extension
information processing opportunities
(data utilisation)
“Time is the wisest of all “Sometimes it's more difficult “Spend each day trying
things that are; for it brings to achieve a 10% cost to be a little wiser than you
everything to light.” —Thales reduction than it is to tell were when you woke up.”
people they have to achieve —Charlie Munge
Our recent history has taught
50%. Small incremental steps
us that understanding “through This program seeks to provide
block your view of doing
the chain” supply and demand alternate pork business
something fundamentally
can help all industry players options for pork producers’
different.” —Eckhard Pfeiffer
plan, evaluate and decide consideration. In general,
more effectively. This program Australia has many natural when pork production is
focuses on improving the strengths. We also have profitable there comes a point
timeliness, flexibility and expensive labour, high feed where decisions get made on
availability of information to prices and a relatively small how to invest the proceeds.
support individual decision number of people distributed Historically, a common choice
making. Markets operate most over almost 7.7 million square has been to increase the
efficiently where there is perfect kilometres. This program volume of production. This
data immediately available to is focused on those cost will remain a valid option, as
all participants. In multi-stage measures that individual is investing in margin, climate
value chains data will not be producers cannot afford friendly sustainability or
perfect, however that does not alone, including big, high risk valuable product or market
diminish the value of targeting opportunities – with everyone differentiation.
perfection. sharing a small part of the risk.
20 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 21Creative telling
of motivating
stories and
the consistent
delivery of
promises
S T R AT E G I C
drive
consumer
THEME THREE Maintain domestic Grow domestic Grow targeted
fresh demand demand international demand
demand “If you are persistent you will
get it. If you are consistent you
will keep it.” —Anonymous
“Logic will take you from A to
B. Imagination will take you
everywhere” —Albert Einstein
“Purity is the gatekeeper
for everything precious and
blissful.” —Eric Ludy
Sustainable growth is founded This is the extension program of This is also an extension
Ultimately, it is the person consumer is prepared to pay will
on a solid base. Australia has inspiring research that uncovers program of research that
continue to be one of the roles
with the gold who makes been increasingly falling in the needs of Australian uncovers the needs of
APL plays for our stakeholders. The
the choices. relentless search for factual truths, love with fresh pork. “Get some consumers both inside and consumers in other parts of the
the creative telling of motivating pork on your fork” has been outside the food category. world. Particularly, respecting
Influencing consumers as the stories and the consistent delivery of revived over the last decade Extension in this instance both the similarities and
source of product approval, industry promises remain the building blocks and transmitted consistently into means telling a story Australians differences of people based
appreciation and the enjoyment of a sustainable industry. homes, shops and the palms want to hear and engaging in a upon their cultural beliefs.
of eating is essential to increasing of Australian’s hands via their conversation about improving Extension in this context still
demand of pork. Understanding mobile phones. The investment lives, strengthening social means telling a story consumers
what the consumer wants and in positive momentum provides bonds and eating healthily. and customers want to hear.
providing that in a better way than both the time and confidence to Pork is already enjoyed in Our neighbours in Asia value
our competitors, and at a price the explore, experiment and enjoy more than 4 out of 5 Australian safety as well as taste, texture,
Australian pork. households, this program aroma and visual attractiveness.
seeks to extend the uses and Adding value at each stage of
occasions of that enjoyment. the supply chain will be key to
leveraging Australian pork’s
first-class quality systems.
22 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 23S T R AT E G I C
leading Leaders in
animal care
Biosecurity
leadership
Climate friendly
farming
community
THEME FOUR
social licence
“The love for all living “Commitment eats impossible “We cannot hold a torch to
creatures is the most noble for breakfast.” light another's path without
attribute of man.” —Honorée Corder brightening our own.”
—Charles Darwin —Ben Sweetland
With the sea as a natural
Australia’s pork industry has boundary and diligent The provision of tasty, high
Social license brings with it It does mean balancing the been a proactive leader in professionals in our ports, quality, sustainable food is a
major factors for sustainability; animal care for more than a Australia has managed to stay challenge for every country
the implication of societal decade. In 2011 the industry free of many of the animal on earth. Finding ways to do
affordable for shoppers, safe for
permission. workers, responsible to the planet, voted to voluntarily remove diseases experienced in other this that are friendly to the
considerate of the animals, nutritious gestation stalls and set a target parts of the world. The vast planet are not only possible
Often societal permission holds for consumers and viable for the of legislating this move in 2017. majority of Australia’s pork farms but already occurring. This
organisations to a higher standard farmer. It also means investing in When governmental priorities already have a biosecurity program seeks to build on the
than the law. This strategy is aiming research that provides opportunities delayed the review of pig care plan. This program seeks not extraordinary work of some
higher than both. The goal is societal for leadership. standards and guidelines, APL only to maintain our current Australian pork producers who
celebration. This does not mean that volunteered to help fund the biosecurity levels but also to already capture farm waste to
every special interest group will be process of review, in order to investigate ways in which we generate electricity to keep
automatically agreed with. deliver on our promise. This can “push back the borders” in piglets warm. Building on
proud tradition of proactivity space and time by extending research into real sustainability
continues with investment in our biosecurity on behalf of all (particularly responsible to the
research to further extend this Australians. planet) this program seeks
leadership tradition. to shape the narrative of
sustainable and farmed.
The goal
Leaders in Industry
human nutrition visibility
is societal
celebration “Let food be thy medicine and
medicine be thy food.”
“A basic tenet of a healthy
democracy is open dialogue.”
—Hippocrates —Peter Fenn.
Australian pork already offers Australian pork producers are
consumers a large number proud of their standards and
of health benefits. Some are methods of operation. This
common to all meats such as program targets making our
micro-nutrients that are more methods easily available to
bio-available when consumed in people in towns and cities
meat than a vitamin supplement. whilst protecting the welfare
There are other unique of our animals. It also protects
combinations of nutrients that the biosecurity that producers
set pork apart. This program is and others have worked so
focused on helping Australians hard to achieve whilst providing
understand and recognise the nutritious, consistent protein for
nutritional value of pork as part consumers.
of a balanced diet.
24 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 25S T R AT E G I C
building
industry
THEME FIVE
Producer relations Technology Organisational
(shared values) adoption effectiveness
shared vision “The goal is to provide
inspiring information that
moves people to action.”
“Technology frightens me
to death. It’s designed by
engineers to impress other
“Collaboration allows us
to know more than we
are capable of knowing
In any collective there are Over time the goal is to shape this —Guy Kawasaki. engineers. And they always ourselves.” —Paul Solarz
into a well informed and focused come with instruction booklets
perceptions of bias, The purpose of this program Every successful organisation
narrative – one where we are all that are written by engineers
advantaging some clear on what is and is not on the
is to inspire and strengthen
for other engineers – which evolves and finds better
two-way communication with
participants by agenda, and where the producers
producers and the APL team.
is why almost no technology ways of working, more
efficient methods of allocating
disadvantaging others. are treated like customers and their
This not only enables producers
ever works.” —John Cleese
and prioritising resources,
APL employees are respected as
to take advantage of the This program involves developing people and
This is as true for the Australian experts.
research, policy and market presenting beneficial building skills and capabilities.
pork producers as it is for other There may be too much passion for opportunities that exist but also technologies in simple, clear
agricultural professions. total agreement but we will accept enable APL to stay updated ways that the user group This program is focused
relentless progress towards our about existing and future understands. Particular effort will on on-going reflection and
This theme involves creating continuous improvement in
dialogues with each APL member shared goals. needs of producers. Another be made to ensure messages
element is to enable industry are framed to influence operational performance.
and finding value that they can
add to the industry as well as collaboration and mutual uptake of new technologies
finding value that APL can add to progress across producer and practice changes. The
their business. groups and other parts of the aim will be to help producers
value chain. understand how the use of the
technology or introduction of
the practice change will benefit
their business. It also includes
recording which technologies
have been adopted by whom,
what learnings and adjustments
have been made and any other
practices that either enhance or
damage the intended benefits
of adoption.
26 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 27demonstrating
AUSTR ALIAN Table 1. Australian Pork Industry Key Result Areas
PORK INDUSTRY
STRATEGIC INDUSTRY TARGET OBJECTIVE
results
PERFORMANCE MEASURE
TR ACKER THEME OUTCOME 2020 2025
Increased domestic
Frequency of retail
preference for pork as a 9 11
purchase per annum
protein source
market and
Any strategy seeks to move a product
competitive position from the current Number of new
differentiation Increased diversity of markets worth $50m
one to a new, more attractive one. 0 5
The measures and targets outlined markets and products revenue (includes
below are aspirations APL has for premium)
each Strategic Theme.
Price variation,
Each measure, although summarised Price stays within historic
adjusted for inflation 3.14 – 3.64 3.40 – 3.90
here has a formalised methodology trend range
of reporting to ensure it is measured
manage (A$ per kg HSCW)
in a consistent manner with a defined
volatility for
regularity.
viable farms Reduced cost of
Indexed cost of
production at 100 85
production
constant grain price
Per capita fresh pork
Increased domestic
consumption 10.2 11.1
popularity of pork
drive (HSCW kg)
consumer
demand Increased international Australian Pork
demand for Australian international sales 137.9 240.0
pork (A$m)
Social license
Demonstrated leadership
leadership positions 1 3
on social license issues
leading taken
community
social licence Maintaining Australia’s
Number of new
exotic diseases 0 0
biosecurity credentials
detected
Members who know
Meaningful member
their primary APL 60%* 90%
engagement
contacts name (%)
building Increased on-farm
Members who can
industry adoption
recall APL adoption 30%* 80%
shared vision this year (%)
Producers who
Effective research
consumed APL 20%* 50%
extension
information (%)
* These measures do not yet have a base-line in 2020 and are estimates for 2020.
28 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 29APPENDICES
a balanced
R&D portfolio
APL invests in new, Investment is allocated to achieve “Horizon projects” are typically
balanced, financially responsible medium to long term projects.
developing, maturing
investment outcomes from both Depending on the project, the
and established industry industry and Commonwealth outcomes may be transformative,
opportunities. These matching funds. significant in terms of the total value
investments may Our investments integrate the
added to the industry, will take
multiple years to complete and are
complement relevant triple bottom line objectives of
likely to deliver observable industry
national and cross-sectoral economic, environmental and social
outcomes some years after the
responsibility. Investments are
initiatives. planned to spread 30 per cent of the
project has been completed.
long run investment budget towards APL’s systems enable the portfolio
what is currently being referred to as of investments to be classified by
“industry solutions” and 70 per cent various dimensions including:
towards “horizon projects”. • government research priorities
“Industry solutions” are typically • theme objectives
short-term projects which will deliver • project length
relatively immediately observable
• levels of risk, return and leverage.
outcomes. Industry solution
projects may be either pro-active The Board has established the
or responsive. Typically the risk of Investment Committee to assist
not achieving project outcomes for in prioritising and recommending
solutions projects is low. specific investments to the Board
for funding. Elected Delegates
representing Australian pork
producers communicate the
contemporary views of the Australian
pork production industry to APL
at least twice per annum. APL
management and APL committees,
including subject matter experts,
Investment is
consider the views of industry when
identifying and evaluating projects.
If proposed projects are supported
by the relevant committee, they
are recommended to the Board for allocated to achieve
balanced, financially
endorsement and funding.
responsible
investment outcomes
30 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 31APPENDICES
industry
assumptions
2020-2025
The table to the right Table 2. Projections for Industry Development to 20251
outlines the assumptions
around the key industry 2020 vs 2025 vs
YEAR ENDING JUNE 30 2010 2015 2020 2025 2015 (%) 2020 (%)
parameters over the term
of the Strategic Plan Number of sows 254,930 265,057 271,447 286,000 2.4 5.4
The industry outcomes targeted Pigs weaned per sow per year 22.2 22.6 22.8 24.5 0.9 7.5
in this strategic plan incorporate
relatively modest volume of Slaughter numbers millions 4.56 4.92 5.15 5.91 4.6 14.6
production growth assumptions and
relatively aggressive industry value
Average weight HSCW kg 72.6 75.4 77.97 79.97 3.4 2.6
assumptions, targeting maintaining
industry value (gross value of
Total domestic produced HSCW tonnes 000's 331.260 371.164 401.7 472.3 8.2 17.6
production on-farm) at around its
highest level ever (2020).
Industry gross value of production $ millions 917.6 1195.1 1502.3 1725.59 25.7 14.9
Achieving that goal will add $1 billion
to the Australian pig industry over Total exports SW tonnes 000's 35.31 37.94 33.00 48.00 -13.0 45.5
the five years of the strategic plan.
Import volume HSCW HSCW equiv tonnes 000's 254.99 286.74 369.21 294.59 28.8 -20.2
Total available domestic HSCW tonnes 000's 548.46 622.80 740.53 734.01 18.9 -0.9
Australian population millions 22.032 23.816 25.74 27.57 8.1 7.1
Domestic consumption fresh HSCW kg/capita/annum 8.66 9.74 10.2 11.1 4.7 8.8
Domestic consumption processed HSCW kg/capita/annum 13.14 14.9 15.7 15.7 5.4 0.0
Domestic consumption total HSCW kg/capita/annum 21.80 24.64 25.9 26.8 5.1 3.5
Total fresh HSCW tonnes 000's 190.79 231.97 262.6 306.0 13.2 16.5
Total processed HSCW tonnes 000's 289.39 354.86 404.4 433.1 14.0 7.1
Total Australian processed HSCW tonnes 000's 102.67 84.09 108.7 133.4 29.3 22.7
Total Australian pork consumption HSCW kg/capita/annum 13.32 13.27 14.4 15.9 8.7 10.5
Australian processed share % 35.5 23.7 26.9 30.8 13.4 14.6
1
Sources include the Australian Bureau of Statistics, APL Producer Surveys and Nielsen
32 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 33APPENDICES
financial
performance
2020–2025
The industry assumptions As a principle, the Board has The key assumptions used to
decided to introduce a degree of ascertain the forecast financial
in the previous section
flexibility into forward budgets. In performance are:
have been used to forecast previous strategic plans, the five- • The Pig Slaughter Levy remains
the financial performance year budget included predetermined unchanged at $3.25 per slaughter,
of APL for the period of the apportionment between each as received by APL;
strategic objective. These
2020–2025 Strategic Plan, • The continuation of the Export
apportionments were reviewed by
including the resources the Board annually. Occasionally
Market Development Grant
(EMDG) system that is currently in
required to deliver against these reviews resulted in
place;
the Strategic Themes. reapportionment of budget between
• The continuation of the R&D
strategic objectives.
matching system in its current
As the Australian pork industry has form and at its current levels; and
become more dynamic, particularly
• Other revenue streams which
in the last four years, APL has
include interest income and
identified a need to be more resilient
reimbursement for services
to the changing environment. APL
provided to other industry
will address this need by improving
organisations are consistent with
the agility of its processes and
current expectations.
planning.
The ambitious goals of this
This strategic plan is therefore more
strategic plan mean it is possible
dynamic than previous plans in the
that delivering the plan will require
sense that the Board has committed
additional resourcing. As an
to allocate up to 30 per cent of
industry we may need to consider
each year’s revenue to funding
changing the levy amount in order to
“industry solutions” and up to 70 per
facilitate improved R&D and market
cent to strategic industry “horizon”
outcomes.
outcomes, as referenced under
A balanced R&D portfolio (page 30).
APL has identified
a need to be more
resilient to the changing
environment
34 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 35APPENDICES
Table 3. Forecast APL financial income and expenditure planning through to 2025
2021 2022 2023 2024 2025
YEAR ENDING 30 JUNE
$ ‘000
R&D Marketing R&D Marketing R&D Marketing R&D Marketing R&D Marketing
Levy $ 5,322,000 11,974,500 5,433,000 12,224,250 5,497,000 12,368,250 5,547,000 12,480,750 5,547,000 12,480,750
Government R&D Matching Contributions $ 5,452,000 5,563,000 5,627,000 5,677,000 5,677,000
Other Revenue $ 305,000 313,990 318,056 322,199 326,421
Total Income $ 10,774,000 12,279,500 10,996,000 12,538,240 11,124,000 12,686,306 11,224,000 12,802,949 11,224,000 12,807,171
market and product differentiation $ 1,514,476 333,111 1,545,682 340,130 1,563,675 344,147 1,577,731 347,311 1,577,731 347,425
manage volatility for viable farms $ 3,869,083 188,094 3,498,806 192,057 3,539,534 194,325 3,571,353 196,112 3,571,353 196,177
drive consumer demand $ 1,140,400 8,529,187 1,163,898 9,609,427 1,177,447 9,722,781 1,188,031 9,812,022 1,188,031 9,815,008
leading community social licence $ 4,387,487 821,422 3,459,723 838,087 3,498,483 849,644 3,528,764 858,806 3,528,764 859,382
building industry shared vision $ 1,342,724 1,342,364 1,370,391 1,370,649 1,386,343 1,386,835 1,398,806 1,399,586 1,398,806 1,400,047
Other Expenditure $ 85,733 56,696 87,500 57,891 88,518 58,574 89,314 59,113 89,314 59,132
Total Expenditure by Category $ 12,339,903 11,270,874 11,125,999 12,408,240 11,253,999 12,556,306 11,353,999 12,672,950 11,353,999 12,677,171
Total Expenditure $ 23,610,777 23,534,240 23,810,306 24,026,949 24,031,170
Surplus/Deficit $ (557,277) 0 0 0 0
Reserves $ 3,734,000 3,941,962 3,965,083 3,992,690 4,004,961
36 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 37APPENDICES
investment
evaluation
framework
Purpose Evaluation of possible project
investments
importance On-going evaluation of Evaluation of projects at the Program Framework
This Evaluation Framework project investments end of the life of the projects APL’s Evaluation Framework
supports APL’s Program The decision to invest in a project is The impact of the strategic pillars Selected Programs incorporate supports the following Program
Framework. The evaluation made following evaluation of the: and themes on the industry as a budget for ex post evaluation Framework.
framework is a requirement of • Alignment of the project with the a whole are measured using of projects to be performed by
the Funding Agreement between APL has an established structure
Strategic and Annual Operating Key Result Areas (KRAs). APL’s external independent consultants.
the Commonwealth of Australia which facilitates planning, guides
Plan. The Strategic Plan is performance in efficiently and These post-project evaluations
represented by the Department investment selection, monitors
reviewed annually effectively delivering projects to apply the evaluation guidelines for
of Agriculture, Water and the performance and reports on
• Alignment with APL’s Governance support those pillars are measured the assessment of performance
Environment (the Commonwealth) progress/achievements resulting
Framework and Corporate Social using organisation Key Performance impacts developed by the Council
and Australian Pork Limited from the investment activities.
Responsibility policies Indicators (KPIs). APL’s KRAs and of Rural Research and Development
(APL). APL consulted with the
Commonwealth in preparing the • Likely economic, societal and time period KPIs are published in APL’s Annual
Operating Plan which is available on
Corporations. APL also participates
in the Council’s process for
The Program Framework has the
following elements:
Evaluation Framework. environmental impacts with
APL’s website. aggregation of performance impact • The Australian Pork Limited
particular consideration given to
The Evaluation Framework describes evaluations undertaken across the Strategic Plan 2020-25 which
the national rural R&D priorities Projects are measured and
the process of undertaking RDCs. describes the objectives,
and providing outcomes for evaluated through their life
rigorous and regular evaluation Australian pork producers and the to determine whether further Typical ex-post reports performed outcome statements and key
of Research and Development Australian pork supply chain as a investment would add value to by external independent consultants performance indicators to direct
activities and Marketing activities. whole the Australian pork industry. The include: investment of levy payer funds
Outputs and performance impacts measured KRAs and KPIs for each and Commonwealth Matching
• Value for money and budget. • Industry Economic Impact Reports
of APL’s Program investments are program are reported to the APL Payments
During the evaluation stage the (whole of industry)
systematically evaluated through Board regularly. The measured • Delivery of the strategic objectives
expected benefits to Australian • Ex-Post Economic Analysis
APL’s Evaluation Framework and outcomes are reported in APL’s are supported by Annual
summarised in APL’s Annual Report.
pork producers is estimated. The
potential and likely contribution ease Annual Report which is available on
(programs)
Operating Plans (AOPs). The
APL’s website. The Annual Report • Ex-Post Benefit Cost Analysis AOPs are annual investment plans
Strategies, objectives, and KPIs are of non-financial impacts are also
describes, inter alia, how the projects (programs) that describe the projects to be
set out in APL’s Strategic Plan and considered in conjunction with
the Annual Operating Plan which APL’s Strategic Plan advance the objective outcomes of Research and Development findings funded to achieve the agreed five
outline projects by Program. The the Annual Operating Plan and the are published and disseminated year strategic outcomes.
• Pathway to adoption, uptake and
Evaluation Framework describes: Strategic Plan. through APL’s various communication • The annual report brings together
commercialisation opportunities,
• Evaluation of possible projects in where relevant channels unless there is a cogent performance related information
the Program reason why publication is not generated by the Program
• Project risk assessment.
appropriate such as when APL Framework and summarises
• On-going evaluation of projects
The R&D and non-R&D costs of each is pursuing a commercialisation the AOP outputs and impact of
through the life of the Program
project being evaluated are reported opportunity. investments
• Evaluation of projects at the end
of the life of the Program and
separately and in aggregate.
cost • Undertaking a performance
review conducted by an
dissemination of outcomes.
independent party
• The performance review under
the Funding Agreement will
include information on the extent
to which planned services and
deliverables were met and
the outcomes of evaluations
completed.
38 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 39APPENDICES
pork industry
operating
Driver Outlook/Impact/effect Assessment
environment
Supply chain There’s a polarisation between big producers and small Weakness
fragmentation producers which when combined with an increased diversity
of consumer sales outlets and channels that means product
and situational
tracking becomes exponentially more complex.
analysis Perceived reliance
on supermarkets
Supermarkets have a much bigger share of producer and supply
chains mind than they do have of product. Serving supermarkets
needs is very important, and serving other channels needs is
roughly twice as important.
Weakness
Increased The pork industry has recently seen a significant amount of global Opportunity
media press, due to the spread of African swine fever (ASF) and negative
attention health coverage of meat. This has increased the number of people
who may consider restricting meat consumption for perceived
health benefits. The opportunity lies in ensuring that Australian
consumers are well informed about their nutrition and understand
the role that meat and pork can play in delivering their nutritional
requirements.
Driver Outlook/Impact/effect Assessment
Diverse market 90% of Australian pork is currently sold domestically for food. An Opportunity
Increased focus on The global spread of African swine fever (ASF) has seen an Strength requirements ideal sales strategy has fewer eggs in more baskets.
biosecurity increased focus on biosecurity from all stakeholders, raising the
profile of biosecurity from a farm-gate problem to a national priority.
International protein ASF-driven pork shortages have led to protein substitutions Opportunity
shortages Stronger global prices may put some pressure on bacon and ham
Domestic consumer Domestic consumer demand continues for fresh pork, with supply Strength processors and their import purchasing plans due to the global
demand issues the limit on volume consumption growth going forward. African swine fever epidemic.
Most of the core consumer needs for food (consistency of supply, Commentators are predicting a shortfall in pork production in China
nutrition, sustenance, affordability, value and taste) remain constant. over the next couple of years of up to 18 million tonnes, which is
completely impossible to replace by increased production in other
Pork consumption has grown by 37.4 per cent over the last 20
parts of the world. At best, only three to four million tonnes of extra
years. Contributors to pork growth include increased recognition of
Chinese imports are possible and even this will place great stress
healthy cuts and cooking versatility.
on pork demand globally.
Export volumes have come down as domestic pig prices have
improved over the past year, leading to a growing unwillingness to
Productivity Other than feed costs, Australian pork producers are seeing Strength continue supplying very cheap overseas markets. Strategic markets
improvements improvements in productivity from previous years, from the such as Singapore continue to provide a strong volume outlet and
changing role of technology in production and research – dynamics look good for increasing global prices with ASF induced
including ever-improving genetics – to efficiencies realised by production challenges.
adapting to climate change.
40 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 41Driver Outlook/Impact/effect Assessment Driver Outlook/Impact/effect Assessment
Favourable Food for some can be a source of pride in how they provide for Opportunity High grain prices Due to the high cost of grain in drought periods, Australian Threat
consumer trends their family and can be a focal point for a small amount of daily production costs are often at the mercy of weather conditions.
inspiration and enjoyment.
High grain prices are the biggest factor in producer profitability
A rising consumer trend towards nationalism and higher presently in Australia’s pork industry, given that pig prices
expectations around animal welfare and sustainability has seen returned to positive levels in 2019.
stability in the domestic fresh pork market.
Technology has changed the consumer marketing landscape
in the past decade, giving consumers instant access to recipes,
instructional videos, influencers and information on farm practices. Import competitors Even at the best of times, Australian pork prices are not Threat
internationally competitive, with approximately 80 per cent of
Consumers are making their purchase decisions based on whole smallgoods produced in Australia using imported pork.
meals, rather than deciding on a protein source and building a meal
from there. Improvements in convenience packaging, cut diversity
and versatility awareness has balanced the consumer shift towards
‘flexitarian’ eating, with domestic fresh pork consumption continuing
The pig cycle The Australian pig industry operates in the context of strong market Threat
to increase year on year.
forces, as do many other industries. Currently the pig industry
Consumers are paying increasing attention to the nutrition supply appears to fall in a farm gate price cycle of approximately five to
chains and want to know that the food they buy is sourced ethically seven years, known as ‘the pig cycle’.
and sustainably. This represents a great opportunity for the pork
industry to differentiate our products and communicate our
achievements in animal welfare and resource efficiency.
Eating quality and Recent research has seen an increased appetite for Opportunity
consistency interventions in eating quality and consistency, creating an
opportunity to increase the number of pork meals in consumer
meal repertoires, thereby increasing demand.
Competitor proteins Recent drought conditions have led to higher beef and lamb prices Threat
and decreases in retail supply, providing opportunities for pork to fill
the void.
Chicken continues to be significantly cheaper than other protein
options, and this will likely drive consumption growth – alongside
competitor supply issues – at retail over the next five years.
While plant-based proteins have seen growth in recent years,
demand is much lower than for animal proteins. Consumer
sentiment may increase growth in new product development of
plant-based proteins, however in the short term, growth is likely to
be restricted by supply.
42 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 43APPENDICES
national
and rural
research and
development
priorities
The Australian The Australian Government productivity and government rural
contributes to the Australian pork R&D priorities and provide robust
Government provides
industry by providing matching and objective information on the
public investment in contributions to APL for eligible R&D overall economic, social (public
rural R&D because expenditure to a limit of the lesser of good) and environmental returns
profitable, competitive an annual cap of 0.5 per cent of the produced by APL’s R&D portfolio.
industry’s gross value of production
and sustainable rural APL is committed to ensuring
or the cumulative R&D levy collected
industries provide by the Government from industry.
a sustainable and competitive
Australian pork industry focused on:
benefits for the This substantial support provided
• The economical and
whole Australian by the Commonwealth enables APL
environmentally sustainable
to significantly leverage producer
Commonwealth. implementation of new and
levies and their investment into
its research, development and advanced technologies and RD&E
extension investments. outcomes by producers and key
industry stakeholders to enhance
Matching contributions provided animal welfare, biosecurity, soil,
by the Australian Government may water and natural resource
only be spent in accordance with management, traceability, product
the Pig Industry Act (2001) and quality and safety, animal health,
the funding agreement between pig management practices;
the Commonwealth and APL.
• Protecting Australia’s community,
The funding agreement prohibits
public health, primary industries
expenditure on agri-political
and environment from biosecurity
activities and payments to industry
threats;
representative bodies.
• Enhancing productivity; and
APL’s programs and plans must
• Market insights
be consistent with the Australian
Government’s National Science The strategic objectives and
and Research Priorities, Rural RD&E supporting themes and enablers
Priorities, and other guidelines are reviewed by the Board annually.
and priorities communicated by Subsequent to the annual strategic
the Commonwealth and reflect review, planned financial resource
the dynamic nature of the global allocations are determined and
market. As a rural Research and described in the Annual Operating
Development Corporation (RDC), Plan.
APL has also developed and refined
its R&D process to implement key
investment evaluation and reporting
frameworks to demonstrate its
alignment with both industry
44 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 45APPENDICES
Table 4. Alignment with Rural RD&E Priorities
SOIL, WATER AND
MANAGING NATURAL ADVANCED TECHNOLOGY BIOSECURITY ADOPTION OF R&D
RESOURCES
Diversity of markets and products Yes
market and
product Quality consumer eating experiences Yes
differentiation
Valuable provenance of Australian pork Yes Yes
Timely relevant through-the-chain information (data utilisation) Yes
manage
volatility for Reduce cost of production and processing Yes Yes Yes
viable farms
Diversified pig business extension opportunities Yes Yes Yes
Maintain domestic fresh demand Yes
drive
consumer Grow domestic demand Yes
demand
Grow targeted international demand Yes
Biosecurity leadership Yes Yes Yes Yes
Climate friendly farming Yes Yes Yes
leading
community Leaders in animal care Yes Yes Yes
social licence
Leaders in human nutrition Yes
Industry visibility Yes Yes Yes Yes
Producer relations (shared values) Yes Yes Yes
building
industry Technology adoption Yes Yes Yes Yes
shared vision
Organisational effectiveness
Rural RD&E Priorities available at www.agriculture.gov.au/ag-farm-food/innovation/priorities
46 AUSTRALIAN PORK LIMITED S T R AT E G I C P L A N 2 0 2 0 – 2 0 2 5 47You can also read
