The U.S. Grains Council said this week that the global outbreak of Porcine Epidemic Diarrhea virus currently hammering U.S. hog producers is also having a negative impact on the United States' global customers.
The disease, also spreading in Canada, Mexico, the Dominican Republic, Colombia and Peru, as well as Asian like Japan, Taiwan, South Korea and China, has already killed approximately 5 million piglets to date in the U.S. alone.
"The U.S. Grains Council remembers the 1960 'hog lift' to Japan as our founding event," said U.S. Grains Council President and CEO Tom Sleight, "and still today, anything that hurts hogs hurts many of our oldest and best customers around the world. The current swine epidemic is a serious matter for many of them, and therefore for us."
This week, industry contacts in Japan, Taiwan and Mexico expressed growing concern about economic losses to farmers, potential shortages and higher prices, USGC said.
Ordinarily, the United States, as the world's largest pork exporter, could step up exports to fill a shortage, the Council said, but the emergence of PEDv in the United States will cut into American production as well. Consumers are already seeing the impact.
"Markets will adjust while this is being contained," Sleight said, "and other sectors, especially poultry, will fill the gap. We don't anticipate a major effect on feed grains. But we have been in contact with our good customers, some of whom are facing very significant losses, to let them know that we understand the problem, and will be there to help them rebuild."
Rabobank earlier this month issued a report confirming Sleight's assertions – the bank's Food and Agribusiness Research team suggests U.S. pork production is anticipated to decline 6% to 7% in 2014, the most in more than 30 years.
In addition, U.S. chicken production is in a good spot to take advantage of the decline in pork production, as the beef industry faces tight supplies as well.
U.S. chicken production would have to rise by 8% to 9% to offset the shortfall from beef and pork, Rabobank said, but they estimate that a limited breeder flock and continued high demand for fertilized eggs from Mexico will keep supply growth restrained.