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Local pork farmers and their international counterparts are battling against crippling feed costs, the SA Pork Producers' Organisation (Sappo) said yesterday.
Pork producers at the fourth International Meat Secretariat (IMS) World Pork Conference in Nanjing, China, agreed that producers were sustaining unprecedented losses, Sappo chief executive Simon Streicher said.
The international situation was a mirror image of where local pig farmers found themselves.
"In particular producers emphasised the cost of production rises that are facing the industry and believe immediate lifts in wholesale and retail prices, and producer returns are required for industry survival," he said.
Maize prices were high for local pig producers. "We are feeling it. If prices do not start to support us, there will soon be very difficult times ahead."
The most important issue was that of feed because for most pig farmers, feed costs represented more than 70percent of pork production costs. Worldwide grain prices had more than doubled as a result of poor harvests due to climatic conditions, he said.
"The most significant impact has been caused by the massive growth in demand for grain to produce biofuels and in many countries there are significant biofuel subsidies which are further fuelling this demand."
Delegates indicated that many producers were leaving the industry and more would follow. The organisation had sympathy with consumers, but farmers were battling, Streicher said.
The industry could handle the situation in two ways.
Firstly, there could be a significant drop in production worldwide due to producers exiting the industry, followed by a dramatic increase in wholesale and retail prices, well above current levels.
A second option was "to work with consumers, the food service sector and retailers to increase prices paid to producers, now."
Streicher said an increase in prices to producers would allow production to be maintained. Wholesale and retail prices would not need to increase drastically.
"This scenario appears the best for all parties," he said.- Sapa