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Cheaper Pork Prices to Drive Greater Demand

by 5m Editor
9 May 2008, at 8:16am

NEW ZEALAND - Pig producers need to wait until cheap pork serves as beneficial to them, according to Scoop,

Pork may be the cheapest meat in retail cabinets, according to New Zealand Pork, but it will be consumers, not farmers, who capitalise, at least for the next six months.

New Zealand Pork chief executive Sam McIvor said a world glut of imported pork had helped to put pork in the unenviable position of being the cheapest meat in New Zealand.

Cheap pork was a good deal for consumers at a time when people were watching their budgets, but not so good for producers.

"New Zealand producers might be losing $30 to $50 a pig, but we are not unique and basically the world over is losing money as a result of the big liquidity of herds."

He said cheaper prices would eventually drive greater demand to raise returns for producers.

The organisation hopes that to dispel the public perception that pork is more expensive than chicken, which rose 20 per cent to 30% from last year.

Producer costs have gone up because of increased grain prices, but they have offset some of this by improving pig production and survivability. Strong competition from overseas meat has, however, taken its toll.

New Zealand's key competitor, Australia, is reducing its sow population by 70,000 (about 15%) and big reductions are being made in Europe and the United States.

A promising sign is that the future market for grain is beginning to soften. South Africa is bullish about its new season grain and weather predictions are for Australia to come out of a long drought.

New Zealand supplies about 45% of the nation's total pork consumption.

New Zealand Pork will probably survey meat prices next year.

View the Scoop story by clicking here.

5m Editor