Pork industry braces for all-time high prices

Aug. 9, 2013

The cost of bacon is on the rise, and the high prices are expected by many analysts to hit the foodservice industry sooner than later.

The source of this inflation has been cited by some to be the Porcine Epidemic Diarrhea Virus (PEDV), first discovered in the U.S. in May.

The USDA confirmed the case in 14 states, claiming it is a production-related disease that poses no risk to food safety. However, its symptoms have killed an unknown number of piglets, according to the Huffington Post, which could be a reason for all-time high pork prices this week.

Before the virus was confirmed, pork sold for about $78 on the Chicago Mercantile Exchange. Now it's listed at $105.

However, PorkNetwork.com said it's too soon to attribute these increases to the PEDV outbreak.

And, the National Pork Board has attributed the rising prices to higher demand and more marketing efforts.

"At a point in time when pork production is high and domestic supplies are up, this shift in inventories is great news for our producers," said Karen Richter, a farmer from Montgomery, Minn., and president of the National Pork Board. "This market shift demonstrates that pork is hot right now and has a momentum that continues to build throughout the traditional summer grilling season.

"For the past eight weeks, we have been reaching out to consumers and it is paying off," Richter said. "By building relationships and launching promotional campaigns with America's top food retailers, we are seeing a boon in pork sales."

The U.S. Department of Agriculture announced that June 2013 frozen pork supplies are down 14 percent from the previous month and down nearly 5 percent on a year-over-year basis, reflecting higher demand for pork.

According to the July 23, 2013, Daily Livestock Report, total pork inventories at the end of June were 564.9 million pounds, or 4.7 percent lower than in June 2012.

The Daily Livestock Report — written by economists Steve Meyer and Len Steiner — also noted that "pork stocks normally decline in June, but this year the month-to-month change in pork inventories was 14.3 percent, the largest volume depletion in 20 years."

Meanwhile, the National Pork Board also announced this week it is investing an additional $350,000 toward research, education and coordination of efforts to better understand PEDV. This increase in funding is in addition to $450,000 announced in June, bringing total Checkoff investment to $800,000.

Read more supply chain news.

Topics: Equipment & Supplies , Food Cost Management , Trends / Statistics

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