Pork faces tough times

by 5m Editor
23 February 2006, at 12:00am

NEW ZEALAND - Heightened competition from Australian imports and falling lamb prices is leading to a sharp drop in incomes for pig farmers. Since Christmas, the pork schedule has fallen by 30 cents a kilogram, reflecting changing dynamics in the global pork industry, and a severe drop in prices for New Zealand lamb, which has become much more competitive in supermarkets. At the same time the high value of the Kiwi dollar is seriously eroding returns from the important Singapore market. New Zealand Pork Industry Board chief executive Angus Davidson says large quantities of chilled and frozen Australian pork are being sold in supermarkets, butchers and other retail outlets. He says the Australians appear to be selling spare production into New Zealand at discounted prices. "Like us, the Australian industry is being badly hurt by their high dollar. They are facing increasing difficulties in being able to sell profitably into Japan, a key market for them, and also Singapore." Mr Davidson said it was hoped this would be a short-term problem as it appeared they were not aiming to sell chilled pork here after April. "It might be a short-term problem, but it is causing farmers here a lot of pain." The industry was also feeling increasing pressure from competing red meats, especially lamb, where export prices have slumped in recent weeks. Lamb was now retailing for about the same price as pork, after a lengthy period when it had been much more expensive. Unlike the Australian imports, the fall in the lamb schedule appeared to be a normal part of the commodity cycle, and followed a period of exceptionally high prices. While there had been a sharp fall in the US-Kiwi dollar exchange rate, exporters in other currencies were not enjoying the same benefits. The Kiwi dollar remained much higher against the Singaporean dollar. "Our exporters are still there, but are having to work a lot harder," Mr Davidson said. "The Australians have the same problem in Asia: it makes it very tough doing business there." Source:

5m Editor