Price spike not realised in festive season lead up

Across the board, pork producers generally have less pigs to offload at Christmas and enjoy a price rise with increased demand during the festive season but this year, production is up and it's caused a dampening on prices.

The nation's pork producers are growing more pigs than ever and the good news is, those pigs are being consumed, according to Pork SA chair Andrew Johnson.

"Demand has certainly increased - we would like to see prices slightly higher especially when compared to our beef and lamb counterparts," he said.

"The pork industry supply chain has put a lot of work into putting increased amounts of Australian pork into the processing sector and this has been a positive."

Mr Johnson said previously not a lot of product was going into that market but there has since been significant investment and it has helped the sector "massively".

But despite some good news stories, Mr Johnson said he was "surprised" that industry had not seen greater price rises in the past few weeks.

Producers are faced with rising overheads - about a 40 cent a kilogram rise in production costs and this needs to be recovered somewhere and Point Pass pork producer Roger Schulz wanted to see a bit more of a return.

"We increased production slightly after reducing when returns were too low but we had a big drop in cash flow so we built up again.

"We had more pigs this year and we will have more next year too."

Weekly pig production is at about 106,000 a week across the county and Mr Schulz said generally it was 100,000 and he thought that had contributed to weakening returns.

He sells about 25 pigs a week - this number rarely changes throughout the year, whether it is a peak demand period or not.

"We cannot just increase production at Christmas but compared to beef and lamb - no one in the pig industry can work out why pigs are making so little," he said.

Mr Schulz would like to see an increase from $3.60/kg to at least $4.00-$4.50/kg - to make everyone "happy".

"Staple proteins for pigs are grains, it has increased in cost and even though there is downgraded and feed grain around, it is still commanding a good price from people who need to buy it in," he said.

"To keep Australian pork production viable, we need lower production costs and better returns."

PRETTY strong pork production across the board off the back of solid demand means the industry has regained a bit of faith and if a price rise follows, a buoyant future is ahead.

Prices have had a steady rise throughout the year and SA producers are not looking down on the sector's returns but hoped industry could secure a bit more of a return boost at Christmas.

Industry began 2021 at a peak, with returns reaching $3.88 and Australian Pork Limited general manager - marketing Peter Haydon believed the expense of beef and lamb combined with a global shortage of pork most likely contributed to the rise in price.

Though soon after, in July, prices plummeted to $3.39 - off the back of rapid production in the first half of the year.

"We were initially lucky that production increases coincided with market changes that were helpful to the pork industry.

"Then it caught up a bit."

Industry growth is still at about five to six per cent a week, Mr Haydon says, and market conditions had a positive effect on that to force higher returns in October.

With prices edging up, the lead into December was steady and eventually arrived at the present figure of $3.69.

But prices have not wriggled since early December while beef and lamb have climbed considerably.

Mr Haydon said other protein markets have had a restriction of supply with favourable seasonal conditions but the pork industry has had a different climate to work within.

"Its had efficiency improvements - production has been faster than we have records for."

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