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IPPA: PEDv among factors to decide 2015 porcine profits

 

 

By TIM ALEXANDER

Illinois Correspondent

 

SPRINGFIELD, Ill. — Tim Maiers and his associates with the Illinois Pork Producers Assoc. (IPPA) understand that, though domestic retail pork sales remain strong, consumers are alarmed at recent increases in the price of their favorite cuts of pork chops, bacon and ham products at the supermarket.

Maiers, public relations director for the IPPA, envisions a market where consumers can benefit from expanded pork operations, higher farrowing rates, heavier market weights and other cost influencers resulting from lower feed costs for producers. But one thing must occur before that vision can become a reality for producers and consumers, market experts agree: The deadly porcine epidemic diarrhea virus (PEDv) must be eradicated or better contained.

And though early indications point to a reduction in piglet mortality from PEDv – possibly because of the issuance of two PEDv medications this year – IPPA officials are taking a cautious, wait-and-see approach in predicting the course PEDv will take in Illinois and the United States.

"PED has not been as bad this summer. We were probably similar to other states in the number of cases, and the disparity of the cases. I think everybody kind of expected that because of the warmer temperatures," said Maiers. "I think the big question among all of the predictions is what will happen in the fall and winter months. Last year we saw spikes (in PEDv cases) after November."

According to him, farmers are beginning to improve their personal management of PEDv. In addition, there are now a couple of vaccines on the market that producers did not enjoy access to one year ago. "But there is still going to be an impact on the market," he said. "PEDv is the biggest wild card out there."

How much of an impact PEDv will have on winter swine production is a hot topic of discussion. Purdue University agricultural economist Dr. Chris Hurt noted in a late September essay that more baby pigs survived the summer than were expected, which should help boost pork supplies by the end of the year and into winter.

In addition, the number of pigs per litter this summer was down just 1.6 percent from the previous summer, much smaller than losses in the previous two quarters. The number of market hogs in the U.S. was around 1 percent higher than projected by the USDA, according to its most recent Hogs & Pigs report.

The result is more pork will be coming from more pigs per litter, more farrowings and more weight, according to Hurt. Maiers concurs – if the decline in PEDv mortality rates continues through autumn and winter.

"If we continue to see pig numbers per litter increase back to the levels before PEDv, we’re adding inventory on the market. If we see a drop in PEDv (piglet deaths) this winter, and farmers hold back some gilts this winter as they’ve indicated, we’re going to have more animals farrowing and more per litter. That’s going to put more pork on the market next year," he said.

There is an additional key factor that will help decide whether consumers pay less for pork products in 2015, Maiers added: The success of the U.S. pork export market.

"Twenty-five percent of our product is exported, and exports are also kind of a wild card with countries like Russia and China," with U.S. pork product embargoes, he said. "If we see some expansion in some of these countries and demand stays strong, then we might see some lower prices in the stores.

"I think we will see lower (consumer retail) prices (next year) than what we see this year, anyway. If you look at grain prices and the record crop we’re harvesting, it looks like feed costs will definitely be down."

Lower feed costs could go hand-in-hand with swine facility expansion, Maiers added. And though prices paid by consumers might be lower, profits could remain strong for producers thanks to lower feed costs, among other factors.

Negative market influencers could include new, emerging diseases and regulatory actions restricting facility construction or herd expansion, Maiers said. "There are a lot of factors that play in. There always are, there always have been and always will be. That’s the nature of the business."

10/15/2014