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Virus a 'very real' threat to pork output - USDA

Porcine epidemic diarrhoea virus may be having a "demonstrable effect" on US pig numbers, but not enough to scupper expectations of a rise in pork production this year, the US Department of Agriculture said.

The USDA acknowledged that a quarterly pig report it released last month showed a "very real" threat to pork production from the virus, also called PEDv, which causes high mortality in young piglets and weight loss in older animals.

It was implicated in a breeding rate of 10.16 pigs per little which, while a little higher than that a year before, was well below the rate of 10.3 which would be expected if producers kept up the rate of improvement seen since 2007.

"Because PEDv is known to strike very young animals, with mortality rates of up to 100%, the September-November litter rate may be picking up effects of PEDv in the breeding herd," USDA analyst Kenneth Mathews said.

'Demonstrable effect'

Furthermore, its impact may also be showing up in a reduction in the number of animals classed in the report's lowest weight band, of less than 50 pounds.

While the overall rate of decline was modest, at 1.3%, that disguised larger rises in states where PEDv has been more common, including in Iowa, where the inventory for sub-50-pound animals dropped 3.3%, North Carolina, where the fall was 10.6%, and Oklahoma, which witnessed a 30% slump.

"The vulnerability of young pigs to PEDv suggests that the disease is having a demonstrable effect on national pig numbers," Mr Mathews said.

Pork impact

However, while the USDA on Friday cut by 325m pounds, to 23.597bn pounds, its forecast for domestic pork production this year, Mr Mathews defended the decision to keep the estimate above the 23.212bn pounds achieved in 2013.

"Other factors, such as producers' farrowing intentions and sharply higher live weights, point to higher pork production in 2014," he said.

The quarterly hogs reported had shown that producers intend to farrow 1.4% more sows in the first half of this year than the same period a year ago.

"Moreover, lower feed costs and excess barn space - perhaps another consequence of PEDv - are providing significant incentives to producers to add weight to slaughter hogs."

Positive margins

Lower grain costs mean that hog producers look set for profit despite a drop in hog prices this year, expected at some 3% compared with the 2012 average.

"Although hog prices are expected to decline almost 3% year-over-year for 2014, quarterly feeding spreads are positive, suggesting that lower feed costs will more than offset year-over-year lower hog prices in 2014."

Hog futures weakened on Friday in a decline blamed on profit-taking after a revival in prices from a four-month low last week for the spot February contract, although further-ahead lots have continued to improve.

"Summer-month" contracts have been "supported by the PEDv concerns," US Commodities said, flagging forecasts that "increased pork production from herd expansion will begin by late summer of 2014, and prices will move below year-previous levels at that time".

Lean hogs for February were 0.7% lower at 86.30 cents a pound in morning trade in Chicago, where the August contract stood down 0-.2% at 97.80 cents a pound.

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