September 14, 2007

Produce less to stay afloat, panel tells Aussie pig farmers
 

Dugald Walker, chairman of the New South Wales Farmers' Association pork committee, believes the industry needs to cut production by 20 per cent to stay viable.

"I don't know if it would be accepted but there are too many pig farmers and production is too high," Walker said. "More people have got to leave and the Government should help the industry restructure."

He said rumours were rife that processors had large volumes of imported frozen pork in storage, which could suppress demand and prices for domestically produced pork.

Industry figures show pork imports rose 48 percent over the last year to 190,000 tonnes in 2006/07, while exports dropped by 5 percent to 60,261 tonnes, well down from the peak of 82,679 tonnes achieved in 2002/03.

While average pork prices rose over the year by 6.2 percent to AUS$2.76 a kilogram and bacon prices by 9.1 percent to AUS$2.51/kg, feed grain prices rose by 57.6 percent from AUS$177 per tonne in 2005/06 to AUS$279 per tonne in 2006/07.

The pig prices compare with estimated costs of production in 2006/07 of AUS$3.09 per kilogram for pork and AUS$2.81 per kilogram for bacon. Walker said grain prices were now about AUS$380 per tonne and had reached AUS$430 per tonne last week.

High domestic prices drove processors to import pork. The association warned that with producer costs "unreasonably" high, many producers were likely to become unviable and the industry unsustainable over the medium term.

(AUS$1=US$0.84)