AUSTRALIA'S pork industry believes its expensive policy of confronting issues head on has paid dividends.

Pig producers made a decision two years ago to phase out sow gestation stalls to head off rising animal welfare complaints.

When supermarkets last month announced they would only take supplies from sow-stall free producers, the industry was already halfway there.

"It makes a big difference to our relationships with other parts of the industry and government," APL chief executive Andrew Spencer said at the Australian Pork Limited annual meeting in Melbourne last week .

About 65 per cent of total ham, bacon and smallgoods consumed in Australia each year is made from imported pork.

Mr Spencer said the decision to allow fresh imports "seems to us unfathomable considering the potential for the outbreak of exotic disease".

The annual conference was told pig producers were battling a cost-price squeeze as feed prices spike alongside world shortages of grain.