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Death Losses From PEDV Expected to Fuel Higher Live Hog Prices in 2014
Dr. Steve Meyer - Paragon Economics

Farmscape for November 29, 2013

The president of Paragon Economics predicts reductions in the U.S. hog supply due to Porcine Epidemic Diarrhea to fuel increased prices throughout 2014.
Due to high feed costs in the first half of 2013 U.S. pork producers lost substantial amounts of money but, thanks to a record U.S. corn crop, the fourth largest soybean crop on record and significantly lower costs, profitability returned to the black starting in June, has been very good on occasion and is near break even now.
Dr. Steve Meyer, the president of Paragon Economics, says a big improvement in costs means even with the same hog prices this year as last we'll see good profits through 2014.

Clip-Dr. Steve Meyer-Paragon Economics:
The biggest supply thing that has changed is we expected to see some expansion and we saw a small expansion in the breeding herd in the September Hogs and Pigs Report but the pig numbers coming out of that report had been substantially less than what USDA said, three percent or so below what I expected for slaughter this fall and so what has happened is it looked like we had more liquidation a year ago than what USDA picked up, that the spring pig crop was smaller and so we're running short on numbers.
The big factor going forward is going to be Porcine Epidemic Diarrhea Virus which really started to cause pig death losses in large numbers in June and July of this year in parts of the U.S.
That kept growing.
It's been spreading in Iowa, it's been spreading in North Carolina.
Our best calculations are that that may take three percent of production off of 2014 and, if that's the case, that's going to be three percent from where we would have been but that means that we're probably going to be at or below this year's supply levels next year which means that prices will be quite strong.

Dr. Meyer notes we started having death losses in large numbers in June so he expects the real impact of PEDV on supply to start in the next few weeks and get larger as we move through 2014.
For Farmscape.Ca, I'm Bruce Cochrane.


       *Farmscape is a presentation of Sask Pork and Manitoba Pork Council

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