March 25, 2009

Rising demand for locally grown meat and falling grains prices has led to a turnaround in the fortunes of Western Australia's (WA) pig farmers.

 

About 18 months ago, producers across Australia were preparing to cut their breeding herds as total farm losses of up to AU$5 million (US$3.47 million) were recorded each week.

  

WA Pork Producers Association executive officer Russell Cox said the state's industry was now recovering with an average 15 percent drop in feed grain prices and rise in farm-gate prices.

 

Cox said that just over 15 months ago, when grains prices were more than AU$400 (US$278.06) a tonne, an industry survey revealed that the majority of producers were running at a loss.

  

The officer also said most farmers were now turning a profit but needed those margins to hold to make up for their losses in previous years and have the confidence to expand.

 

Some producers had decided to leave the industry over the past 18 months while those remaining had become more efficient.

 

He said the sow herd has dropped 24 percent since July 2004, but the amount of pork being produced has dropped only 9 percent.

  

Craig Mostyn Group chief executive David Lock said worker shortages had been one of their biggest challenges to production at the height of WA's boom when they had been forced to rely on some itinerant labour.

  

Lock said demand for pork had been strong in recent months for relatively limited supplies due to a reduction in the pig herd.

 

He said they are starting to see more confidence from the farmers, adding that time is needed as farmers are making profits so they do invest more in their production facilities and grow the WA herd.

 

He also said the fall in the Australian dollar had helped boost the exports, most of which go to Singapore.