27 January 2015 | Online since 2003



Porcine virus to cause shortfall in American hog market


Porcine Epidemic Diarrhea Virus (PEDv) has impacted about 60% of the US breeding herd, 28% of the Mexican herd and is beginning to develop in Canada, according to Rabobank’s latest report This Little Piggy Cried P-E-D-v All the Way Home: Estimating the Impacts of PEDv in North America. If PEDv spreads in Canada and Mexico at the pace seen in the US, North American hog slaughter could decline by nearly 18.5 million hogs over 2014 and 2014 or 12.5% relative to 2013 levels. Overall US pork production is anticipated to decline 6-7%, the most in more than 30 years.

“In the US we see the outbreak of PEDv causing a significant shortfall in the availability of market hogs in 2014 to the tune of 12.5 million hogs or 11% of annual slaughter,” explained Rabobank Analyst William Sawyer.

“Given the ever rising number of PEDv cases reported, coupled with a six-month average lifecycle, the months of August through October are likely to be the tightest for processors where slaughter could decline by 15% - 25% against 2013 levels. If the virus continues at its current rate, the shortfall to US slaughter in 2014 could be as much as 15 million hogs.”


The specific origin of PEDv in the US has not been definitively identified but comparison of strains of PEDv in the US have indicated a close relationship with strains in China. What is clear is that once the virus makes it into a region, it can spread quite easily and rapidly throughout an entire population. The most common avenue is on livestock and farm equipment that come into contact with hogs positive with PEDv or their faeces.

In regard to productivity, 2014 will be a story of “the haves and have-nots” where hog producers who experienced mild cases of PEDv, or none at all, could realize margins of over USD 60 per head, the highest calendar year average seen in Rabobank’s 40-year record. Conversely, hog producers who have had difficulty eradicating the virus could suffer significant losses as the pain of the high fixed costs of modern hog production compounds prolonged periods of weak productivity.


Packers for the year to date have been in a ‘haves’ position as the fear of possible stockouts have pushed pork cutout prices up far faster than hog prices. The gross margin for packers reached USD 63 per head, up from USD 37 this time last year. Profitability is likely to wane in the spring and summer, as prices continue to climb, testing pork demand, and hog shortages force packers to idle plants.

The real winner in the PEDv situation, however, will be the US poultry industry. With US beef production forecast to decline by nearly 6% in 2014 which, coupled with Rabobank’s estimate of 6-7% less pork production, implies an exceptional opportunity for the US chicken industry as the protein of last resort. US chicken production would have to rise by 8% to 9% to offset the shortfall from beef and pork, but a limited breeder flock and continued high demand for fertilized eggs from Mexico will keep supply growth restrained. As a result, Rabobank expect chicken prices and margins climb this spring and summer yielding a very favorable year for the US chicken industry.

Download



Comments


No comments posted yet. Be the first to post a comment

To post comment without approval login or register

Display name

Please enter your name

Email (optional)
Comment

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.



Jobs


17 January 2015
Wells Engineer
As a Well Engineer you would review well programmes, produce technical reports and carry out rig side visits to both offshore...

17 January 2015
Labourers
Electricians, Electrical Mates and labourers needed to help build a solar farm. Please call 07740....

12 January 2015
Production Team Manager
Production Team Manager Location: Harlesden, NW10 Shift: Continental Days Only Shift Pattern Our manufacturing site based in ...

23 January 2015
Bank Healthcare Assistant Band 2
It comprises Barnet Hospital, Chase Farm Hospital, the Royal Free Hospital and more than 30 services in the community....

9 January 2015
Area Sales Manager in North West
This position has arisen due to market development of their new dairy hygiene products………. Ideally have territory sales exper...




Top stories you may have missed
12 November 2014 | Arable
GM crops 'good for farmers and the envir...

GM crops 'good for farmers and the envir...

GM crops are good for the economy and can reduce the amount of pesticides u...


6 November 2014 | Cattle
Smaller European markets drive beef expo...

Smaller European markets drive beef expo...

Demand from smaller European markets has helped drive strong growth for UK ...


6 November 2014 | Agri Safety
Lack of engineers a 'ticking time bomb' ...

Lack of engineers a 'ticking time bomb' ...

A lack of engineers, not enough people promoting the land-based industries ...


4 November 2014 | Bees and Beekeeping
Bee action plan due: Last chance for bee...

Bee action plan due: Last chance for bee...

Environment Secretary Elizabeth Truss is launching the National Pollinator ...


4 November 2014 | Arable
Experts welcome financial boost for youn...

Experts welcome financial boost for youn...

Agricultural specialists have welcomed a potential financial boost for youn...


3 November 2014 | News
Supermarket competition on prices 'risks...

Supermarket competition on prices 'risks...

As retailers continue to participate in a highly competitive race to the bo...


31 October 2014 | Arable
New Defra farm figures 'underline volati...

New Defra farm figures 'underline volati...

New farm business income data from Defra, which focus on income from March ...


30 October 2014 | Agri Safety
Agriculture remains one of UK's most dan...

Agriculture remains one of UK's most dan...

Agriculture has remained one of the industries in which workers are most li...


29 October 2014 | Finance
UK farmland prices see 'substantial grow...

UK farmland prices see 'substantial grow...

Prime arable land in the UK has seen a substantial year-on-year growth in p...


27 October 2014 | Arable
Satellites to help farmers pinpoint dise...

Satellites to help farmers pinpoint dise...

A new mobile app for farmers able to pinpoint and identify disease, pests a...