Market impact of PEDV hard to nail down

Market impact of PEDV hard to nail down

PORCINE epidemic diarrhea virus (PEDV) continues to spread in the U.S. and has now been confirmed in 15 states.

According to information from the National Pork Board, more than 330 cases have been reported thus far.

The board approved checkoff funding of $450,000 last month for research on the origin and control of the virus, which is known for its high mortality rates among young pigs. Ohio State University announced late last week that researchers there are working on a serological test that will allow scientists to determine the origin and the spread of the disease, which was first discovered in April.

According to lead researcher Linda Saif, the cell culture and serological tests are important steps in eventually creating a vaccine for the disease.

Quantifying the market impact of PEDV, however, is proving to be something of a challenge. As Steve Meyer and Len Steiner noted in the "Daily Livestock Report" last week, PEDV is a "non-reportable" disease event, meaning it is not mandatory to report the disease (unlike foot and mouth disease or classical swine fever, for example). As such, the data are somewhat incomplete despite cooperation from state-run animal health laboratories.

Taking the available data and making some assumptions about the nature of the incomplete data, the economists estimated that pig numbers were reduced 60,000-100,000 in each of the last three weeks of June. That would imply that losses could reduce pork supplies by 2.5-4.2%, which would certainly have an impact on the market.

Jim Long, chief executive officer of Genesus, wrote last week that feeder pigs are the "canary in the coal mine" of the pork industry and noted that pig prices are averaging more than $50 per head — despite cash corn at $7/bu. — a significant improvement from the $18-20 per head seen a year ago.

"All indications are that there is a strong demand for small pigs," Long explained. "There are finishing barns empty, which is not normal for this time of the year."

With empty barns and cheaper feed prices ahead, Long concluded that $50 feeder pigs indicate that demand is outstripping supply. With sow liquidation last year plus a rapacious global demand for pork, keeping a handle of PEDV is a fairly critical challenge for the industry.

Volume:85 Issue:29

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