Prospects improve for Western Australian pork producers

02-04-2009 | |

About 18 months ago, producers across Australia were preparing to cut their pig breeding herds as total farm losses of up to A$5 million were recorded each week. In Western Australia the troubled state’s pork industry has now seen a turnaround in demand, according to a report in the “Western Australian” newspaper.

Western Australian Pork Producers Association executive officer, Russell Cox, said the state’s industry was now recovering with an average 15% drop in feed grain prices and a rise in farm-gate prices. He said just over 15 months ago, when grains prices were more than A$400 a tonne, an industry survey revealed that the majority of producers were running at a loss. Farm-gate prices in Western Australia had since lifted about 15-20%, depending on weight and grade.

Profit margins
Cox said most farmers were now turning a profit but needed those margins to hold to make up for their losses in previous years and have the confidence to expand. He said some producers had decided to leave the industry over the past 18 months while those remaining had become more efficient. The situation in Western Australia effectively mirrors what is happening on a national basis. Cox added that the sow herd has dropped 24% since July 2004, but the amount of pig meat being produced had dropped only 9%.

The Craig Mostyn Group, which operates Western Australia’s biggest pig abattoir, is searching for 20 full-time workers in the slaughter and boning sections of its Wooroloo plant to replace backpacker labour they had relied on. Chief executive, David Lock, said worker shortages had been one of their biggest challenges to production at the height of Western Australia’s boom when they had been forced to rely on some itinerant labour. Lock said demand for pork had been strong in recent months for relatively limited supplies due to a reduction in the pig herd.

“We are starting to see more confidence from the farmers,” he said. “We just need more time where farmers are making profits so they do invest more in their production facilities and grow the Western Australia herd.”

He told the “Western Australian” that the fall in the Australian dollar had helped boost pork exports, most of which go to Singapore.