Potential market impact of Porcine Epidemic Diarrhea virus

There is always industry concern whenever a new disease turns up, and Porcine Epidemic Diarrhea virus (PEDv) is no exception. The disease is deadly for young pigs, with nearly 100 percent mortality. Older pigs typically will get sick but usually recover.

The American Association of Swine Veterinarians (AASV) reports weekly data from the National Association of Animal Health Laboratory Network on the number of hog farms with new cases of PEDv. By the first of September, more than 525 farms were confirmed to have the disease. 

"As is typical, the number of cases grew very fast at first, but has slowed a bit recently," says Ron Plain, agricultural economist at the University of Missouri (see chart). "Hopefully, we won't see a rebound in new cases this winter. "  

While a general overview on number of herds with confirmed cases of PEDv is important, it doesn't tell us how many pigs have actually died, or how markets may be impacted this winter and next year.

"A PEDv outbreak on a farm will reduce the number of hogs shipped to packers four to six months after the outbreak," says Ron Plain, agricultural economist at the University of Missouri. "Thus far, most of the pigs that have died from PEDv are pigs that would have been slaughtered during the fourth quarter of 2013. Fourth-quarter hog slaughter is the highest of the year and fourth-quarter hog prices are the lowest of the year.

"I think it is reasonable to say that because of PEDv, hog slaughter during the fourth quarter of 2013 will be 0.5 to 1 percent lower than it otherwise would have been," he continues.   

What About the Winter Pig Crop?
Everyone hopes the disease is on the decline, but Plain says if PEDv spreads faster during the winter, as many diseases do, then it could cause larger pig losses from the winter pig crop, which is the smallest of the year.

"It could reduce hog slaughter next summer by 1 percent to 2 percent or more," he says. "This, in turn, would boost hog prices next summer, when slaughter is typically light and hog prices are high," he says.

Total Losses Unknown
While we know how many herds have reported the virus, we don't know how many pigs have actually died from PEDv, or the size of the herds impacted.

"Undoubtedly, more farms have PEDv than is reported in the official count," says Plain. "I think it is reasonable to estimate that the official count of infected farms is less than half of the actual total. I suspect small farms are less likely to pay for the confirmation test than large ones. If this is true, then the non-reported farms with PEDv are losing fewer pigs because they have fewer pigs to lose."