People of IPR
Agriculture and Harvest Public Media
Wed March 12, 2014
Pig Virus Now Impacting Pork Prices
A virus that has devastated piglets for nearly a year is now responsible for lower pork supplies and higher prices.
Phil Borgic of Nokomis, Ill. knows first hand what happens when porcine epidemic diarrhea (PED) virus infects a hog barn. He walked through one in late January pointing out the differences among litters.
“This is a PED litter. See how dirty they are?” he said, pointing to a sow whose little piglets had dirty hooves. A couple of PED victims waited to be removed. When suckling piglets contract the disease, they die from dehydration because their bodies can’t recover from the vomiting and diarrhea it causes. Borgic estimates his outbreak killed about eight percent of his expected annual total.
In other pens, the scene was quite different.
“These two litters here are very clean, see how clean looking they are?” he said, indicating robust little animals with cheery pink hides and ears as floppy as the characters of a picture book. “These are really healthy pigs.”
Today, Borgic says his operation is free of PED. But since last spring producers in at least 25 states and three Canadian provinces have been battling outbreaks. That’s why the U.S. Department of Agriculture lowered its pork projections for this year and hog prices recently reached a record high.
“Demand is ramping up here. With tighter supplies, I think that's being reflected in the higher prices that we are seeing,” said Iowa State University livestock economist Lee Schultz.
Pork is popular in the spring, with Easter ham sales, and then summer barbecue season starts up. But you don’t need to go hoarding bacon. Schultz says there are factors controlling how high the prices will go. For one, pigs are arriving at market heavier.
“You're having larger hams, larger loins, larger chops,” Schulz said, “and so you're really increasing that volume of lean product available.”
And consumer response matters. Price-conscious buyers may shy away when the price goes up, lowering demand. Steve Meyer, an economist who consults with the National Pork Board, says suppliers have lots of frozen bacon in storage this year. But that has nothing to do with PED, it’s just a convenient coincidence. Meyer says last summer many buyers got caught paying steep prices for pork bellies—that’s what bacon’s made from—so they planned ahead for this year.
“Bellies in frozen inventory, as of the end of January, were substantially [higher], almost double where they were a year ago,” Meyer said.
Still those inventories will only go so far. Meyer says some packing plants have already reduced working hours and output because PED has disrupted the supply of hogs. His math indicates the number of hogs brought to market in August could be down more than 10 percent from last year. And that means…
“Bacon's going to be expensive.”
Of course, higher prices will help producers who can get hogs to market. Borgic, the Illinois farmer, says he may recover some of his losses.
“On the pigs that we do have to sell, we are looking at potential for record profits,” he said.
But he will remain vigilant. Borgic says being prepared and identifying the virus quickly helped him save some pigs and prevent a spread from his farm to his neighbors.
A hot summer could help kill the virus, which seems to thrive in cooler temperatures. But there are multiple strains of PED circulating in North America now and there’s still no effective vaccine.
So on second thought, maybe a few pounds of bacon in the freezer isn’t such a bad idea.
Agriculture and Harvest Public Media