Meat&Poultry -- April 2014 - 13

PEDv to dramatically affect pork production
Rabobank is forecasting that the porcine epidemic diar-

more than $60 per head, the highest calendar-year aver-

rhea virus (PEDv) will have "significant impacts" on pork

age seen in Rabobank's 40-year record. Conversely, hog

production and slaughter through 2015.

producers who have had difficulty eradicating the virus

"In the United States, we see the outbreak of PEDv

may suffer significant losses as the pain of the high fixed

causing a significant shortfall in the availability of mar-

costs of modern hog production compounds prolonged

ket hogs in 2014 - to the tune of 12.5 million hogs or 11

periods of weak productivity.

percent of annual slaughter," said William Sawyer, an

Beef production in the US is forecast to decline by nearly

analyst for Rabobank. "Given the ever-rising number of

6 percent in 2014 and coupled with Rabobank's estimate

PEDv cases reported, coupled with a six-month average

of 6 percent to 7 percent less pork production, the situa-

lifecycle, the months of August through October are like-

tion implies an exceptional opportunity for the US chick-

ly to be the tightest for processors, where slaughter could

en industry. Chicken production in the US would have to

decline by 15 percent to 25 percent against 2013 levels. If

rise by 8 percent to 9 percent to offset the shortfall from

the virus continues at its current rate, the shortfall to US

beef and pork, but a limited breeder flock and continued

slaughter in 2014 could be as much as 15 million hogs."

high demand for fertilized eggs from Mexico will keep

With regard to productivity, 2014 will be a story of the

supply growth restrained. As a result, Rabobank expects

haves and have-nots, where hog producers who experienced

chicken prices and margins to climb this spring and sum-

mild cases of PEDv, or none at all, may realize margins of

mer, yielding a favorable year for the US chicken industry.

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