December 26, 2008

Australian pig farmers seeing 50 percent price surge

Australian pig farmers are enjoying a near 50 percent price increase now that pig supplies are down 20 percent.

Pork prices had risen in the past year from A$2.40 (US$1.642) a kilogramme to A$3.40 (US$2.327) per kilogramme this month.

Australian Pork Limited chief executive Andrew Spencer said that the increase is due to a shortfall in supply which is a direct result of people getting out of the industry and the reduction in volume.

Spencer explained that the industry has slowed down significantly during the past year due to competition from subsidised imports from Canada and Denmark, and was further hit by drought-driven high grain prices.

As of June this year, there were 240,000 breeding sows in Australia, down from 300,000 two years earlier, with about 20 percent of Australian pig farmers leaving the industry over the past two years.