The Australian Financial Review reports that pork production has fallen to its lowest level in more than 15 years and pork prices are rising, after the industry took a mud bath in late 2007 when plunging profitability sent producers scurrying.

But with prices expected to remain strong for the rest of the year, pig farmers are seeking to expand operations. The latest Australian Bureau of Statistics (ABS) meat and livestock data shows pig meat production crashed in April to 268,000 tonnes, down 11 per cent on last year to its lowest level since June 1991, while the number of pigs slaughtered also declined by 11 per cent to 373,000.

Pork prices hit $3.71 a kilogram in late May, up from around $2.71 a kilo at the same time last year, despite some downward pressure from the swine flu outbreak.

Rabobank senior analyst Wendy Voss predicted falling hog numbers would drive up pork prices. "There are less hogs available for processing and less supply is driving up prices ... You would expect, unless there are some other shocks to the system, that in the second half of the year prices would start to increase through to Christmas."