Piggy bank: new business model spreads the risk for free-range pork producers

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Australia’s fresh pork market is booming, and there’s growing demand from consumers for sustainably farmed, certified-free-range pig products.

Three little pigs: Milne Agrigroup's collaborative business model is helping to expand WA's free-range pork market and make previously unviable farms profitable.
Free little pigs: Milne Agrigroup's unique business model is helping to expand WA's free-range pork market and boost producer profits.
Heather Paul, Flickr CC, wwwflickrcomphotoswarriorwoman531

Now, under a sustainable business model developed by Western Australia-based Milne Agrigroup (Milne AG), previously unproductive farmland is being transformed into clean, green piggeries to the benefit of producers, consumers and pigs.

From grain feed to free-range livestock

Since the early 1990s, along with animal genetics and feed, Milne AG has been developing strong quality-control and information systems around production to support farmers. Over the past decade, the company has changed its focus from grain feed to livestock production, developing sustainable free-range chicken, beef and pork operations across WA in a bid to tap into lucrative markets for premium meat proteins.

Mt Barker Free Range Chicken

Milne’s best-known business is Mt Barker Free Range Chicken, which claims a healthy share of the WA market thanks to its sound animal-welfare credentials and has taken several smaller chicken farms under its wing to meet growing demand. Six of them now produce chickens for the Mt Barker brand under the under the Milne AG free-range agribusiness model.

Plantagenet Free Range Pork

A few years back, Milne AG took the model that had been so successful in growing the Mt Barker business and applied it to pigs. Its corn-fed Plantagenet Free Range Pork brand pigs get to fossick outdoors as nature intended throughout the production cycle, from breeding to finishing.

Milne's production system at Plantagenet Pork, managed by a team of specialists, is based on similar free-range pork models implemented successfully around the world. A comprehensive HCCP-based quality system encompasses animal welfare, food safety, eating quality and farm biosecurity, and and all farms under the Plantagenet umbrella are visited regularly by veterinarians, who monitor pigs' health and welfare. Plantagenet's quality system is also independently audited and verified under the SQF 1000 program.

Free little piggies go to market…

When national retailer Coles was looking to increase its supply of free-range Aussie pork to meet growing national demand, Milne’s solid track record and sound business model made it an obvious choice.

In July 2014, Milne Agrigroup signed a long-term agreement with the supermarket giant – initially, for four years – to supply more than 700 Coles supermarkets nationwide with premium free-range pork.

Under the exclusive supply contract, Milne AG and processor Craig Mostyn Group (CMG) committed to delivering more than 1,200 sustainably farmed, certified free-range pigs a week to Coles stores from mid-2015, to be sold under the ‘Coles Finest’ brand as pork fillets, cutlets, sirloin steaks, mince, and ‘easy-carve’ Scotch and leg roasts.

The agreement created “a new market opportunity in WA for a company and its suppliers who were interested in a sustainable retail solution for free-range pork”, said Coles’ GM of production Allister Watson at the time. “We also recognise [that] free-range production has higher costs of production than conventional and sow-stall-free pig production, and our Coles’ payments reflect this fact.”

Coles now sells its ‘Finest’ free-range pork in more than 400 stores across all Australian states except Queensland, and will be stocking it in Sunshine State stores soon.

Producing happier, healthier pigs is proving profitable for WA farmers
Producing happier, healthier pigs is proving profitable for WA farmers
US Department of Agriculture (USDA)

Turning fallow farmland into profitable piggeries

To meet Coles’ quota, Milne AG needed sustainably farmed free-range pigs and lots of them. “Due to the volume required by Coles nationally, this business is supporting new agribusiness development in WA,” Milne AG CEO Graham Laitt told Farm Weekly in July 2014.

In the year since it signed the agreement, Milne AG has more than trebled the production of Plantagenet Free Range Pork – from 600 to around 2,000 pigs a week.

Currently, the company is working with eight small-scale pig farms across the state, helping them develop sustainable, reliably productive free-range pig-breeding operations that meet the rigorous animal-welfare, food safety and biosecurity standards required by Coles (under the exclusive supply deal, all pork products Milne delivers to Coles its must be accredited by the Australian Pork Industry Quality Assurance Program and endorsed by the RSPCA).

One of these is Emu Downs near Denbarker, a 750-sow breeding enterprise run by husband-wife team the Keams, who began their free-range pig farming venture in WA’s Great Southern region last year with zero experience.

The Keams now produce around 300 piglets a week for Milne AgriGroup under a unique agribusiness model in which Milne provides them with training, support, high-grade feed and a guaranteed return, and they provide Milne with RSPCA-certified-free-range piglets.

Former fencing contractor Jeremy Keam said they could not have done it alone but gained confidence from being part of a group model: “To have … the back-up … was invaluable”, he told ABC Landline in September 2015.

“This is a very, very good deal for us,” Keam said. “To take on the whole thing is a big operation. And there was a fairly full-on journey.

“We wanted the right support in doing what we were doing, and we continue to get that support, although we're pretty well standing on our own two feet now.”

Industry specialist David Plant, brought over from the UK by the Milne AG in 2005 to manage its free-range arm, explains the collaborative process thus:

“The way the model works, growers have the land, the infrastructure [and] the machinery, and they provide straw and water, but Milne takes care of the livestock and making sure that the farm has the designated number of sows and replacement gilts. We provide all the nutritional inputs … and the veterinary expertise to make sure that the health is maintained and that the sows perform to their full capability.”

High-integrity pork = higher returns

Milne AG’s ongoing support and expertise ensures that the pork produced by piggeries such as Emu Downs meets Coles’ rigorous requirements. In return, Coles pays a them higher-than-average rate.  

“It's not just a sustainable animal-welfare model,” Milne AG CEO Laitt noted. “Coles has been at pains to make sure it's a sustainable business model, for our business and our farmers … [one] that recognises the production cost associated with producing free-range pork to an industry standard.” Coles is happy to pay a little extra to secure a reliable buik supply of high-integrity pork that enables it to meet consumer demand nationally.

It’s a win for Milne AG, Coles, consumers and WA producers. And if quality of life matters, it’s also a win for pigs.

If (free-range) pigs could fly…

Already, several new free-range pig producers are benefiting from Milne’s support and systems, and the company is training up more prospective free-range pig farmers to ensure supply grows alongside demand.

Laitt anticipates significant further growth as export markets for high-integrity pork expand – particularly across Asia, in which increasingly wealthy consumers are prepared to pay handsomely for safe, top-quality meat.

The export potential is huge, he contends, with Chinese demand for premium, safe pig products is set to grow exponentially in coming years.

“Sky's the limit, really,” Laitt told Landline. “Within Australia, obviously … there's a very sophisticated and good-quality pork industry, but overseas, there's tremendous opportunities – the Chinese market, the free trade agreement, the opportunities that will eventually present to supply pork to that market. It's the largest pig producer and pig consumer in the world.“

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