September 9, 2004

Australia's Pig Prices Climb As Supplies Tighten

Pig prices in Australia are continuing to climb, driven by the severe tightening of supply throughout the eastern states, according to Meat and Livestock Australia.

MLA said that despite manufacturing demand during the last two weeks easing slightly on legs for the peak Christmas period, retail and wholesale demand has otherwise remained strong.

Many processors have reportedly been forced to secure supplies from other states to maintain production levels. This move has also contributed to the current dearer price trends.

Demand for pork and bacon is generally lower throughout winter. Thus the tight supplies have resulted in pork and bacon prices for August 2004 being 11% and 14% higher respectively, as compared with the same period last year.

Moreover, the higher prices for imported pork have contributed to current rising price trends and caused domestic products to become more affordable. Pork and bacon currently show an increase of 6% and 12% over the past two months.

The influx of imported products has a longer-lasting effect on the Western Australian market. Thus rates in Western Australia have been slower in responding to the dearer trends of the east.

Despite physical market prices increasing in Western Australia, direct-to-works rates are yet to realize any major price movements.