April 7, 2008

Australian pork industry reeling from high feed costs

High domestic feed costs are hurting Australian pork producers, according to a report by the Productivity Commission.

The report found that feed prices peaked in 2007 and it is expected to continue this year.

Droughts, increasing global demand for ethanol have been listed as major reasons for feed price hikes.

The report also said that governmental support for the ethanol industry could further drive up feed costs, although it did not think the support of the Australian government would have any major effects on feed prices.

However, pro-biofuel policies in other nations have pushed up global grain prices, which are likely to have seriously affected the pork industry in Australia, according to the report.

Reducing feed costs is essential for Australia in order to participate in an export market, said the report.