August 15, 2008

Australia is seeing price increases for pork and bacon throughout winter as domestic supply falls short.

Domestic pork supply has tightened due to an increasing number of producers exiting the business on high feed costs and an influx of cheaper imports.

In the past one month, pork and bacon prices have increased 12 cents and 11 cents per kg to 319 cents and 287 cents per kg respectively, according to MLA's National Livestock Reporting Service.

Last year, pork prices were at 251 cents per kg while bacon prices reached only 228 cents per kg.

Despite the gains, profits have been kept low by expensive feed grain and meat prices are expected to, and have to, increase into December if the producers are to make some profits, according to a spokesman for Australian Pork Limited.

NSW Farmers Association pork committee chairman, Malcolm Gett, said the industry hopes that the prices would exceed 300 cents per kg for bacon, which is a necessary target for producers to make a profit.