AGRIBUSINESS: Report Forecasts PEDV Effect

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A new report out from Dutch firm Rabobank says the impact of Porcine Epidemic Diarrhea Virus (PEDV) on the North American swine herd will get a lot worse before it gets better.

PEDV is ravaging 60 percent of the U.S. breeding herd, 28 percent of the Mexican herd, and is just now entering the Canadian herd.

Rabobank analyst William Sawyer predicts August through October will be particularly difficult for processors, with slaughter down by as much as 25 percent against 2013 levels.

The report also says producers who experienced few or no losses to PEDV could see calendar year average margins as high as $60 per head, the highest since Rabobank began tracking it 40 years ago.

According to Rabobank the real winner will be the poultry industry, which will need to increase production by eight or nine percent to fill the void left by beef and pork. But because poultry growth is limited by the size of the breeder flock and demand from fertilized Mexican eggs, chicken prices and margins are set to rise well into the fall.