ST. LOUIS — Pork shortages will be a key concern in many
countries in the coming months.
According to the Rabobank Food and Agribusiness Research and
Advisory Group Pork Quarterly Q2 report, the ongoing spread of porcine epidemic
diarrhea virus in the Americas and Asia will have a material impact on pork
supply both this summer and in the years to come.
Exacerbating tight global supply is Russia’s ban on EU pork
imports after recent African swine fever outbreaks. However, oversupply in China
is expected to continue, driven by high sow liquidation.
“PEDV has been the driving force pushing up pork prices,
especially in the U.S., to record highs,” said Rabobank analyst Albert Vernooij.
“U.S. futures climbed 30 percent in Q1 and are up 45 percent over last year,
impacting pork users and consumer’s ability to source enough pork for their
Rabobank believes the outbreak of porcine epidemic diarrhea
virus in the U.S., Mexico, Japan and South Korea will lead to a likely decline
in global pork production in 2014, against an earlier expected 1.3 percent
In the U.S., where the PEDV outbreak has been most severe,
Rabobank estimates that pork production could decline to mid-single digits — 6
percent to 7 percent — in 2014 due to hog losses from the virus.
Producers have not been required to report PEDV cases to the
Department of Agriculture, making the impact on production unclear. The impact
of PEDV in Asia, especially in Japan and South Korea, is sizable, but difficult
to estimate as the spread of the disease is not known.
In Russia, prices have spiked since its ban on EU pork
imports, following the discovery of ASF in wild boars in Poland and Lithuania.
The ban means a loss of 1.3 million tons of pork imports, about one third of
Russia’s total import volume in 2013.
This has resulted in short supply and higher prices in
Russia, but with North America expected to feel the impact of PEDV for the
remainder of 2014, Russia will have few alternatives to fill the void left by
However, stress on global pork supplies is currently being
eased by the supply glut in China, the world’s largest producer and consumer of
pork. Rabobank believes that Chinese pork prices will continue to fall in Q2 and
into Q3 2014, more than a year after the price decline began.
Sow liquidation, which commenced in April, will drive prices
lower this summer as supply and demand rebalance. Looking to the back half of
the year, the continued sow liquidation should help Chinese pork prices recover
by the end of Q3 2014 in line with the seasonal increase of China’s pork
“In China, pork consumption is expected to remain steady in
2014, as hog supply will continue to be at a relatively sufficient level,”