March 21, 2006

ABARE expects Australian pork prices to fall this year

Australia's hog prices rose 8 percent last year amidst falling production costs, according to the Australian Bureau of Agricultural and Resource Economics (ABARE).

Prices stayed high in the second half of 2005, supported by firm domestic demand and low import levels. Imports were hampered last year by uncertainty over new quarantine rules. 

Pork prices are expected to fall over the remainder of 2005-06, as domestic production and imports climb to normal levels.

ABARE said increased global pork production, especially in the US, over the next few years will result in lower global prices, causing reduced production in Australia from 388,000 tonnes in 2004-05, to 365,000 tonnes in 2010-11. 

Per capita domestic consumption of pig meat would remain unchanged, at around 22.2kg a year while a marginal increase in retail prices is expected.

Poultry meat consumption will rise 2.9 percent by 2010-2011 from present levels according to the forecast. The strong demand, combined with lower feed costs, will result in an 11 percent increase in poultry meat production from 792,000 tonnes in 2004-05, to 880,000 tonnes in 2010-11 with retail poultry prices falling 6 percent in real terms.