From FCC Express, by Richard Kamchen
The future impact of porcine epidemic diarrhea virus on hog supplies makes it difficult to provide a solid forecast for the market in 2015, analysts say.
Canadian Pork Council spokesperson Gary Stordy says there’s uncertainty about how much further PEDv is going to spread in North America and whether the impact of the virus has already reached its peak.
Tyler Fulton, director of risk management for Hams Marketing Services Co-op, says while another increase is possible, he feels it’s unlikely to reach previous high levels.
“At this time last year, we had already experienced a pretty big spike that reflected an epidemic,” Fulton says. “And in this go-round, over the course of the last two months, we’ve not seen that same spike. But it’s a disease, and trying to project animal disease and how it spreads is a big unknown. There’s uncertainty, and uncertainty equals volatility.”
He predicts higher-than-normal volatility for the next 10 to 12 months, but adds other factors like high beef prices, rebuilding stocks and the U.S. economy will also help determine the direction of hog values. He adds the impact of PEDv in Canada has had a limited effect on markets.
“There’s really not a significant outbreak that has impacted our supply,” Fulton says. “But simply by virtue of the fact our pricing structure is a function of the U.S. market, it almost doesn’t matter.”
The latest figures show 69 farms in Canada that have tested positive for PEDv, including four in Manitoba and 63 in Ontario. In the U.S., however, PEDv has spread to 31 states and approximately eight million young pigs have died from the virus since it was first discovered in April 2013.
Fulton notes two new vaccines have been made available, but says the jury is still out on their efficacy.
“The best advice at the moment … is regardless of what the market indications are, make sure you’re following the best biosecurity procedures you can,” Stordy says. “The reality is regardless of what the market does, if you’re hit with PEDv, you’re going to take a direct financial hit that is beyond your control.”