Pork prices expected to continue climbing due to virus
Due to the spread of a virus (PEDv) affecting hogs, pork supply shortages are expected in many countries in the near term. According to the Rabobank Pork Quarterly Q2 report, the ongoing spread of the virus in the Americas and Asia will have a "material impact" on pork supply both this summer and in the years to come.
A news release said that Russia's ban on EU pork imports after recent African swine fever outbreaks is exacerbating tight global supply. However, oversupply in China is expected to continue, driven by high sow liquidation.
"PEDv has been the driving force pushing up pork prices, especially in the U.S., to record highs," Rabobank analyst Albert Vernooij said in the release. "U.S. futures climbed 30 percent in Q1 and are up 45 percent over last year, impacting pork users' and consumers' ability to source enough pork for their needs."
In the U.S., where the PEDv outbreak has been most severe, Rabobank estimates that pork production could decline to mid-single digits (6-7 percent) in 2014 due to hog losses from the virus.
Producers have not been required to report PEDv cases to the Department of Agriculture, making the impact on production unclear, the release said.