Pork producers who suffered through Porcine Epidemic Diarrhea virus (PEDv) and losses associated with the fast-spreading disease in 2014 were also rewarded with record high hog prices and profitability. But what does 2015 hold?
The USDA reported no surprises in its last Quarterly Hogs and Pigs report of 2014 – all numbers were higher than the year before. PorkNetwork Editor JoAnn Alumbaugh reported in an article here the USDA reiterated the industry’s rebound from the grasps of PEDV, which decimated entire farrowing groups of some herds.
These herds now carry a level of immunity, and thanks in part to increased biosecurity and surveillance, PEDv has been relatively mild this winter compared to last.
“This report largely allowed the industry to take a sigh of relief,” agricultural economists Joe Kerns said in a teleconference hosted by the National Pork Board. “The great growing conditions and economic motivation to expand significantly were at the forefront of traders’ thoughts.”
Chris Hurt with Purdue University added that while more pork is on the way, hog prices will fail to match the record levels set in 2014. He expects 2015 hog prices to average around $60 per live hundredweight. While his market expectations are $16 below the 2014 record, he believes total costs of production should stay near $53.
If realized, this would still produce a “strong” $22 of profit per head.
“The theme for pork producers in 2015 will be to strive to gain control over PED death losses and to continue to expand the breeding herd,” wrote Hurt. “It is likely the breeding herd will continue to expand another two to four percent over the course of 2015.”
He adds, “Producers may express some disappointment that the extraordinary profits of 2014 will not continue, but they also realize that 2014 was the aberration year that may only happen once in a lifetime. Most will be happy to accept 2014 and 2015 as the best two consecutive profit years in modern hog production.”