Reduced Losses from PED Negatively Impact Live Hog Prices

US - The director of Risk Management with h@ms Marketing Services blames higher slaughter numbers resulting from reduced losses due to PED for the substantial drop in live hog prices experienced this winter, writes Bruce Cochrane.
calendar icon 5 March 2015
clock icon 3 minute read

The value of live hogs has fallen dramatically since reaching record levels in mid-2014.

Tyler Fulton, the director of risk management with h@ms Marketing Services, recalls last August we saw reductions in US slaughter numbers in excess of 10 per cent because of losses from PED about six months earlier.

Tyler Fulton - h@ms Marketing Services:

The effect of disease and the losses that mounted from that camouflaged the increase in production that we saw so that we didn't really get a good sense as to how much the industry grew over the course of the last two years because we were largely focused on the large losses that developed from the PED disease.

Quite simply, PED has not been the same issue over the course of the last four or five months as it was in the winter of 2013 and 2014, I think, for a couple of reasons.

The industry has benefited from a new vaccine that could have some effectiveness, they may be improving their biosecurity protocols that has mitigated some of that risk and some of those losses that we experienced last year.

While PED is far from being eradicated, it does seem to have a much more moderate impact on the hog supply this year and that's why the hog prices have come down dramatically.

Mr Fulton says the USDA's March 'Hogs and Pigs' report will provide some insight as to how significantly the US herd has grown and from that we can figure out where we can expect prices to be moving forward.

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