This summer, U.S. consumers can look forward to opening a cold beer, firing up the grill and throwing on the most expensive pork chop they have ever purchased.
A deadly disease has spread to more than 4,700 U.S. hog operations and that number is growing by as much as 200 every week, U.S. Agriculture Secretary said yesterday at the World Pork Expo in Des Moines, Iowa. The porcine epidemic diarrhea virus, or PED, has killed about 8 million pigs since the outbreak began in May 2013.
The spreading virus sent retail pork-chops to an all-time high of $4.044 a pound in April, and the American Farm Bureau Federation has said that meat expenses are going to keep climbing. Costs are rising before the start of the seasonal peak in U.S. meat demand, as a shrinking cattle herd sent ground beef to a record, while whole chickens are near the highest ever.
People are going to have to pay up for this summer’s barbecues, because of the current supply issues. People are going to eat more meat during the summer grilling season, so it’s fair to say that they are going to pay higher prices.
Hog futures for July delivery gained 46 percent this year to $1.24975 a pound on the Chicago Mercantile Exchange. The Standard & Poor’s GSCI Spot Index of 24 commodities advanced 2.3 percent. The MSCI All-Country World Index of equities rose 4.4 percent. The Bloomberg Treasury Bond Index climbed 2.9 percent.
The virus, which can be 100 percent fatal to young piglets, has trimmed the U.S. hog herd by about 10 percent. The speed of its spread is of deep concern, and some farms are seeing incidences of reinfection, he said during a presentation at the expo.
For a hog producer in Branch County, Michigan, a PED outbreak on his farm in March caused him to lose about 1,500 pigs. To defend his herd, he disinfected everything that touched the barn floor, including workers’ boots and feed-cart wheels. And while he considers himself fortunate that he was able to contain the disease within about three weeks, he’s watching closely for reinfection.
This year’s rally for hog futures may just be a “temporary” reaction to the disease, and prices could fall from here, said the National Securities. The U.S. Department of Agriculture is pledging $26.2 million to help producers combat the disease.
The number of weekly cases of the virus peaked in mid-February at 315, according to data from the National Animal Health Laboratory Network, which tracks voluntary reports from veterinary diagnostic laboratories. New outbreaks have since dropped by more than 50 percent, with 142 cases reported in the week ended May 31.
Higher animal weights are also helping to buoy pork supplies. Hog carcasses averaged 219.95 pounds (99.8 kilograms) on June 4, more than 14 pounds heavier than a year earlier, government data show.
The industry does not yet have the virus under control, and cases of infection may start to climb at a faster pace later this year as temperatures cool. The virus is believed to survive better in the winter. Hog slaughter may drop as much as 10 percent in the third quarter.
Consumers will pay as much as 4 percent more for pork this year, and costs for beef and veal will rise as much as 6.5 percent, the most of any food group, the USDA forecasts. There’s no relief for protein eaters, and record prices for beef probably won’t let up for the next 18 months.
The USDA has yet to identify the cause of PED in the U.S., making it harder to eradicate. On one farm in Montgomery, Minnesota, the hog barns are only about one-third full after a supplier of young pigs saw its animals struck by the disease.
We’re looking at much lighter pig numbers. It’s a challenging family of viruses. The question in many minds is how did it get here? That means so much more for dealing with these in the future.
Source: businessweek.com, 6-5-2014