March 16, 2009
Australia swine inventory seen to increase in CY 2009
The US Department of Agriculture expects the Australian pig meat industry to begin the process of rebuilding following low periods of extremely poor returns and has forecast closing inventories, production and exports to increase in crop year (CY) 2009.
Total swine inventory is forecast to increase in CY 2009, following a period of significant herd liquidation. High grain prices, severe fodder shortages and low prices forced some pig meat producers to either exit the industry or lower production.
A recent increase in the availability of feed grains, following a more successful winter cropping season and record sorghum harvest, is expected to greatly improve the outlook for pig meat production in Australia. Furthermore, the recent devaluation of the Australian dollar is expected boost exports and constrain imports, greatly improving the competitiveness of Australian pig meat producers.
Slaughter is forecast to decline around five percent to 4.6 million head in CY 2009 as industry begins the process of rebuilding the productive capacity lost during the recent period of extremely low returns.
Production is forecast to increase only slightly during CY 2009 reaching 355 thousand tonnes. This slight increase is forecast despite a forecast fall in slaughter. Improved feed grain supplies are expected to see average slaughter weights increase throughout CY 2009 and lift production from the decade-low levels achieved in the previous year.
Post advises that despite the forecast increase in Australian pork production, a forecast of 355 thousand tonnes remains well below the ten-year-average of 380 thousand tonnes.
Total exports of pig meat are expected to slightly increase in CY 2009 to 57 thousand tonnes. The devaluation in the Australian dollar, compared to a year ago, is expected to make Australian exports more competitive. Despite this increase, post advises that Australian pork exports are recovering from a relatively low base following a prolonged period of downward pressure.
Total imports of pork are forecast to fall to 140 thousand tonnes in CY 2009. A lower Australian dollar is expected to increase the relative price of imports and somewhat reduce their competitiveness relative to locally produced pig meat.
