Welcome!

News Feed Item

Rabobank Report: PEDv Will Cause Significant 2-Year Shortfall In North American Hog Market - 12.5% Below 2013 Levels

Net Effect of PEDv on U.S. Pork Production: 6% to 7% Decline in 2014

NEW YORK, March 25, 2014 /PRNewswire/ -- Rabobank has published a new report on the impact of the Porcine Epidemic Diarrhea Virus (PEDv) on the North American herd, forecasting significant impacts on production and slaughter through 2015, and identifying the opportunity for U.S. poultry to step into the market gap.

In the report, published by the bank's Food & Agribusiness Research and Advisory team, Rabobank says that PEDv thus far has impacted about 60% of the U.S. breeding herd, 28% of the Mexican herd, and is beginning to develop in Canada.  If PEDv spreads in Canada and Mexico at the pace seen in the U.S., Rabobank says that North American hog slaughter could decline by nearly 18.5 million hogs over 2014 and 2014, or 12.5% relative to 2013 levels.  Overall U.S. pork production is anticipated to decline 6% to 7% in 2014, the most in more than 30 years.

"In the U.S., we see the outbreak of PEDv causing a significant shortfall in the availability of market hogs in 2014 – to the tune of 12.5 million hogs or 11% of annual slaughter," explained Rabobank Analyst William Sawyer. "Given the ever rising number of PEDv cases reported, coupled with a six-month average lifecycle, the months of August through October are likely to be the tightest for processors, where slaughter could decline by 15% - 25% against 2013 levels. If the virus continues at its current rate, the shortfall to U.S. slaughter in 2014 could be as much as 15 million hogs."

The specific origin of PEDv in the U.S. has not been definitively identified but comparison of strains of PEDv in the U.S. have indicated a close relationship with strains in China. What is clear is that once the virus enters a region, it can spread quite easily and rapidly throughout an entire population. The most common avenue is on livestock and farm equipment that come into contact with hogs positive with PEDv or their faeces.

In regard to productivity, 2014 will be a story of "the haves and have-nots" where hog producers who experienced mild cases of PEDv, or none at all, could realize margins of more than $ 60 per head, the highest calendar year average seen in Rabobank's 40-year record.  Conversely, hog producers who have had difficulty eradicating the virus could suffer significant losses as the pain of the high fixed costs of modern hog production compounds prolonged periods of weak productivity.

Packers for the year to date have been in a "haves" position as the fear of possible stockouts have pushed pork cutout prices up much faster than hog prices. The gross margin for packers reached $63 per head, up from $37 this time last year.  Profitability is likely to wane in the spring and summer, as prices continue to climb, testing pork demand, and hog shortages force packers to idle plants.

The real winner in the PEDv situation, however, will be the U.S. poultry industry. U.S. beef production is forecast to decline by nearly 6% in 2014 and, coupled with Rabobank's estimate of 6% to 7% less pork production, this implies an exceptional opportunity for the U.S. chicken industry as the protein of last resort. U.S. chicken production would have to rise by 8% to 9% to offset the shortfall from beef and pork, but a limited breeder flock and continued high demand for fertilized eggs from Mexico will keep supply growth restrained. As a result, Rabobank expect chicken prices and margins to climb this spring and summer, yielding a very favorable year for the U.S. chicken industry.

Rabobank's report forecasting the impact of PEDv on the North American hog sector is available to media upon request.

About Rabobank:  Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries.  In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry.  Rabobank's Food & Agribusiness Research and Advisory team  is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture.   www.rabobank.com/f&a

For a social media-ready version of this press release: 
http://rabobank-food-agribusiness-research.pressdoc.com

Follow us on Twitter:   @rabofoodagri

SOURCE Rabobank

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"As we've gone out into the public cloud we've seen that over time we may have lost a few things - we've lost control, we've given up cost to a certain extent, and then security, flexibility," explained Steve Conner, VP of Sales at Cloudistics,in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We provide IoT solutions. We provide the most compatible solutions for many applications. Our solutions are industry agnostic and also protocol agnostic," explained Richard Han, Head of Sales and Marketing and Engineering at Systena America, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
DX World EXPO, LLC., a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"I think DevOps is now a rambunctious teenager – it’s starting to get a mind of its own, wanting to get its own things but it still needs some adult supervision," explained Thomas Hooker, VP of marketing at CollabNet, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are still a relatively small software house and we are focusing on certain industries like FinTech, med tech, energy and utilities. We help our customers with their digital transformation," noted Piotr Stawinski, Founder and CEO of EARP Integration, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We were founded in 2003 and the way we were founded was about good backup and good disaster recovery for our clients, and for the last 20 years we've been pretty consistent with that," noted Marc Malafronte, Territory Manager at StorageCraft, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We've been engaging with a lot of customers including Panasonic, we've been involved with Cisco and now we're working with the U.S. government - the Department of Homeland Security," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"Peak 10 is a hybrid infrastructure provider across the nation. We are in the thick of things when it comes to hybrid IT," explained , Chief Technology Officer at Peak 10, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"I will be talking about ChatOps and ChatOps as a way to solve some problems in the DevOps space," explained Himanshu Chhetri, CTO of Addteq, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are focused on SAP running in the clouds, to make this super easy because we believe in the tremendous value of those powerful worlds - SAP and the cloud," explained Frank Stienhans, CTO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
While the focus and objectives of IoT initiatives are many and diverse, they all share a few common attributes, and one of those is the network. Commonly, that network includes the Internet, over which there isn't any real control for performance and availability. Or is there? The current state of the art for Big Data analytics, as applied to network telemetry, offers new opportunities for improving and assuring operational integrity. In his session at @ThingsExpo, Jim Frey, Vice President of S...
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, provided a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services with...
The financial services market is one of the most data-driven industries in the world, yet it’s bogged down by legacy CPU technologies that simply can’t keep up with the task of querying and visualizing billions of records. In his session at 20th Cloud Expo, Karthik Lalithraj, a Principal Solutions Architect at Kinetica, discussed how the advent of advanced in-database analytics on the GPU makes it possible to run sophisticated data science workloads on the same database that is housing the rich...
"At the keynote this morning we spoke about the value proposition of Nutanix, of having a DevOps culture and a mindset, and the business outcomes of achieving agility and scale, which everybody here is trying to accomplish," noted Mark Lavi, DevOps Solution Architect at Nutanix, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.