Pig inventories are expected to continue building as supplies of fodder and feed grain also continue to rebuild following years of drought. Poor returns and record high grain prices had seen pig numbers fall considerably in Australia from 2005/06 to 2009/10, according to historical data.
Total pig slaughter for CY 2011 is forecast at 4.7 million head. Slaughter for CY 2010 has been revised downwards to 4.6 million head, well below Post’s previous estimate. Year-to-date slaughter figures for CY 2010 show slaughter at levels below the same period for CY 2009.
The pig meat industry is believed to be recovering more slowly than previously anticipated. Very harsh economic conditions since the drought began in CY 2002 have seen significant levels of productive capacity retired and many producers exit the industry. Post believes that, moving forward, this will continue to partially constrain growth despite the recent improvements in profitability.
Total pig meat production for CY 2011 is forecast at 346 TMT, up slightly on the revised estimate for the previous year. Increased production is primarily driven by increased slaughter as the industry slowly begins to recover following a year of poor prices and declining slaughter numbers.
Production estimates for CY 2010 have been revised downwards in line with partial year production data for CY 2010. The recovery process will likely be slower than previously expected.
Total imports for CY 2011 are forecast at 200 TMT (CWE), slightly up on CY 2010. Despite this increase, post believes that increasing local production will likely place some constraint up future growth in pig meat imports.
Imports of pig meat for CY 2010 have been revised upwards to a record 195 TMT, surpassing previous expectations. Mid year import data shows strong growth in pig meat imports. Imports of pig meat from the US continue to trend in line with total imports. Total exports of pig meat for CY 2011 are forecast to increase only slightly to 40 TMT (CWE) as the industry slowly increases production following years of poor returns. Exports for CY 2010 have been revised downwards in line with recent mid year data showing exports lower than previously expected. Despite this increase, if achieved, this level of exports would remain well below the long-term average.