South Africa may be blessed with the healthiest pig herd in the world, but pork producers in the country remain under pressure with some reporting profitability being at an all-time low in 2022.
According to Nico Scheltema, head of business intelligence at the South African Pork Producers’ Organisation (Sappo), the market price was not favourable at all.
“Between 2015 and 2022, the average market price of pork increased by 10%, but in real terms it has decreased by 24%,” he said.
Scheltema was speaking at SAPPO’s 2022 media day.
Push towards sustainability
In order for the pork industry to move forward, sustainability must become a key ingredient, industry players pointed out.
Sappo has realised that the pig industry’s licence to operate will need be a subscription to a dual strategy that compensates for the variance in the nature and magnitude of risk across the primary production landscape.
“This two-fold strategy will consist of a portfolio of interventions which is pinned on the existing sustainability practices embedded in Pork 360 and the developmental impact of a range of business development interventions,” said Jolanda Andrag, the organisation’s chief operating officer.
Sappo also went on a journey to track the sustainability within the pork industry, partnering with the Sustainability Institute of Stellenbosch to do a study and a literature review.
The organisations said although there are a lot of specifications in other industries – forced or enforced by external parties linked to retailers – in the pig industry there is a unique case of producers having a consensus on production standards that effectively manages risks.
“The ability to influence how farmers farm is quite significant and given the fact that 80% of the pig population adhere to Pork 360 standards, a lot of the stuff discussed with banks concerning the future already exists within Pork 360,” said Andrag.
Pork 360 risk management
Dr Peter Evans, Sappo’s head of consumer assurance, argued that Pork 360 remains a valuable risk management mechanism and is increasingly a key pillar of the industry’s future sustainability.
Evans said their goal has been to move towards managing diseases, even those that could potentially be transmitted from pigs to humans. A big part of the risk management plan is to concentrate on biosecurity.
“So, we look at environmental stewardship as part of the Pork 360 programme. A lot of the elements in One Health are addressed by the Pork 360 programme,” Evans pointed out.
He added that the other major risk is the health of pigs.
“We look at it on two levels, by not bringing diseases into the country [and] we look at the safety of pork. [As well as to] make sure that it will always be a desirable meat and that people can buy it with faith,” said Evans.
Even though the country had a challenge with porcine reproductive and respiratory syndrome (PRRS) in the early 2000s, Mzansi is one of the only countries to have eradicated the disease, and therefore the aim is to continue building sustainable and secured risk management and protecting the biosecurity of the country.
Financing changes
As Sappo moves forward to finding ways to become sustainable and implement it on farms, changes can also be expected in how financing In the industry is conducted.
At the beginning of the year, Sappo had numerous sessions with commercial banks, as well as the Banking Association of South Africa on topics of sustainability.
“In the discussions it became prevalent the way financing will be conducted in the future and agriculture will fundamentally change,” said Andrag.
She further explained that the fundamental changes will not only occur in the agricultural sphere, but financial institutions want to stay ahead of the game to be able to accommodate businesses where they can sustainably.
“The banks are also considering how to define sustainability and South Africa is incredibly privileged to have a programme such as Pork 360 because there is no equivalent really at the scale in the South African context,” said Andrag.
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