Source: Tom Johnston, MEATINGPLACE, 5/8/14
 
Porcine epidemic diarrhea virus (PEDv) in the United States and Asia and African Swine Fever (ASF) in Europe will have “a material impact” on global pork supplies this summer and years to come with some relief from oversupply in China, according to Rabobank’s Food & Agribusiness Research and Advisory group second-quarter report.

“PEDv has been the driving force pushing up pork prices, especially in the U.S., to record highs,” Rabobank analyst Albert Vernooij said in a news release. “U.S. futures climbed 30 percent in Q1 and are up 45 percent over last year, impacting pork users and consumer’s ability to source enough pork for their needs.”

Rabobank project that outbreaks of PEDv in the U.S., Mexico, Japan and South Korea will reduce global pork production in 2014, reversing the firm’s earlier call of a 1.3 percent increase. The U.S. could see pork production decline by mid-single digits (6 percent to 7 percent) in 2014 due to hog losses from the virus, the firm said.

Prices in Russia have spiked since Moscow banned EU pork imports following the discovery of ASF in wild boars in Poland and Lithuania. The ban removes 1.3 million metric tons of pork imports, which is nearly one third of Russia’s total import volume in 2013. And with North America taking a hit from PEDv for the remainder of 2014, Russia will have few supply alternatives to compensate for the EU.

China, however, has a supply glut that is easing stress on global pork supplies. Rabobank said Chinese pork prices will continue to decline in Q2 and into Q3 2014, more than a year after the slide began. Sow liquidation, which began in April, will push prices lower this summer as supply and demand rebalance. In the second half of the year, the continued sow liquidation should help Chinese pork prices recover by the end of Q3, coinciding with the seasonal increase of China’s pork consumption, the firm predicts.

“In China, pork consumption is expected to remain steady in 2014, as hog supply will continue to be at a relatively sufficient level,” Vernooij said. 

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