November 17, 2009

West Australian pig sector reap profits on low grain prices

West Australia's (WA) pig producers are reaping the rewards of low grain prices and greater farm gate returns after a bumper recovery of the industry.

Twelve months ago, the WA pork industry suffered a mass exodus of farmers as high grain prices and low farmgate returns meant pig farm numbers fell from 360 to 160 in 2009.

In a fortunate turnaround for the remaining pig producers in the state, grain prices have almost halved since this time last year, meaning farmers spend less on inputs while meat prices remain high.

Meanwhile, pork consumers have been assured of stable ham and pork prices over Christmas and the upcoming Chinese New Year, despite a fall in supply from producers, which would usually drive up prices.

Perth Pork Centre general manager Ron Penn said total supply was down 15 percent from last year, but prices would not rise sharply to cover the shortfall in total value.

Penn said prices may go up slightly, but only by one or two percent, which is the normal rise for this time of year.

WA's biggest pig abattoir Craig Mostyn Group CEO David Lock said consumer demand for pork meat had risen as slaughter numbers fell.

Lock expects volume to grow by 10 percent as growers increase investment and herd sizes.