A SPIKE in pig meat prices and drop in feed costs may stem the flow of producers from the pork industry.
Australian Pork Limited chief executive Andrew Spencer said the exodus from the industry was at an end after more than 12 months of poor prices and soaring feed costs.
"Some growers will now be thinking about increasing their sow herds," Mr Spencer said.
He said the latest reports showed prices were about 370c/kg over the hooks for bacon and 385c/kg for pork.
Prices during the Christmas period last year were about 261c/kg for bacon and 289c/kg for pork.
Mr Spencer said that since feed prices started to climb and pork prices flattened in August 2007 about 20 per cent of growers had left the industry.
"In the six months since August 2007 an enormous amount of pig producers left the industry," Mr Spencer said.
"They were losing about $50 per pig due to competition from processed pig-meat imports.
"It was a terrible time."
He said it took some producers six months to disperse their herds, so the supply levels dipped in June last year and the prices rose.
"The people who are left in the industry really need the price increase," Mr Spencer said.
Feed prices have also dropped during the past few months due to a world-wide drop in commodity prices and a reasonable domestic winter cropping season.
Mr Spencer said prices of 380c/kg allowed for farmers to meet the cost of production and make a profit.
"There's a lot of debt they need to pay back," Mr Spencer said.
He said looking forward to the next few months that prices should remain stable due to the supply shortage.
Mr Spencer said prices usually peaked around Christmas and Chinese New Year.
"The supply shortage is still there and the demand hasn't changed from last year," he said.
Victorian Farmers Federation pig group chair Aeger Kingma said for the first time in two years he was paying debt off.
"With economic circumstance the way they are I think the demand has got some legs," he said.
