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Prospects Improve for WA's Producers

by 5m Editor
24 March 2009, at 9:16am

AUSTRALIA - A surge in pork demand has come just in time for an industry in trouble in Western Australia (WA).

Rising demand for locally grown meat and falling grains prices has led to a turnaround in the fortunes of local pig farmers, according to Western Australian.

About 18 months ago, producers across Australia were preparing to cut their breeding herds as total farm losses of up to $5 million were recorded each week.

Western Australian Pork Producers Association executive officer, Russell Cox, said the state's industry was now recovering with an average 15 per cent drop in feed grain prices and rise in farm-gate prices.

"Just over 15 months ago, when grains prices were more than $400 a tonne, an industry survey revealed that the majority of producers were running at a loss," he said.

Farm-gate prices in Western Australia had since lifted about 15 to 20 per cent, depending on weight and grade.

Mr 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. 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," he said.

"The sow herd has dropped 24 per cent since July 2004, but the amount of pig meat being produced has dropped only 9 per cent."

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.

Mr 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 Western Australian that the fall in the Australian dollar had helped boost the exports, most of which go to Singapore.