Sun, Jun 08, 2014 - Page 14 News List

Fatal pig virus fattens US pork prices as barbecue season begins

By Megan Durisin  /  Bloomberg

Racks of pork ribs are smoked on Wednesday at this year’s World Pork Expo in Des Moines, Iowa.

Photo: Reuters

This summer, US consumers can look forward to opening a cold beer, firing up the grill and throwing on the most expensive pork chop they have ever purchased.

The costly cut is a result of a deadly disease having spread to more than 4,700 US hog operations, a number that is growing by as much as 200 each week, US Secretary of Agriculture Tom Vilsack said on Thursday at the World Pork Expo in Des Moines, Iowa.

The porcine epidemic diarrhea (PED) virus has killed about 8 million pigs since it broke out in May last year, according to Paragon Economics Inc.

The outbreak put retail pork chop prices at an all-time high of US$4.044 a pound (0.45kg) in April, the latest data from the US Bureau of Labor Statistics show, with the American Farm Bureau Federation saying they will only keep climbing.

The price hike comes ahead of the country’s seasonal peak in meat demand, as a shrinking cattle herd sent ground beef costs to record highs and with whole chickens nearing their highest prices ever.

“People are going to have to pay up for this summer’s barbecues, because of the current supply issues,” National Securities Corp chief market strategist Donald Selkin said.

PED, which can be 100 percent fatal to young piglets, has trimmed the country’s hog herd by about 10 percent, according to Vilsack.

The speed of its spread is of “deep concern” and some farms are seeing incidences of reinfection, he said at a presentation at the expo, which draws about 20,000 pork producers and industry participants.

For Dale Norton, a hog producer in Branch County, Michigan, a PED outbreak on his farm in March saw him to lose about 1,500 pigs. To defend his herd, Norton, who is president of the US National Pork Board, disinfected everything that touched the barn floor. While Norton considers himself “fortunate” since he was able to contain the disease, he is “watching closely” for reinfection, he said at the expo.

The US Department of Agriculture is pledging US$26.2 million to help producers combat the outbreak, which peaked in mid-February at 315 cases a week, according to data from the US National Animal Health Laboratory Network. New outbreaks have since dropped by more than 50 percent, with 142 cases reported in the week ended on May 31.

Higher animal weights are also helping buoy pork supplies. Hog carcasses averaged 99.8kg on Wednesday, more than 6kg heavier than a year earlier, government data show.

The industry does not yet have the virus “under control” and infection cases may start to climb at a faster pace later this year as temperatures cool, Paragon Economics president Steve Meyer said on Thursday in Des Moines.

The virus is believed to survive better in the winter and Meyer estimates that hog slaughter may drop as much as 10 percent in the third quarter.

Consumers are to pay as much as 4 percent more for pork this year, while costs for beef and veal are to rise by as much as 6.5 percent — the most of any food group — the department forecast.

Beef prices will likely stay at record highs for the next 18 months, said Ricky Volpe, an economist with the department’s Economic Research Service.

The department has yet to identify the cause of the virus, making it harder to eradicate, Karen Richter said in Des Moines. On her farm in Minnesota, the hog barns are only about one-third full after her supplier of young pigs saw its animals struck by the disease.

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