Russia | Fluid Management System Blog

The swine-disease that has been ravaging the US pork industry for over a year, porcine epidemic diarrhea virus (PEDv), is beginning to impact US pork exports and the global trade. PEDv, which only effects piglets and has no impact on human health, has killed millions across 30 states.

US pork prices in the market have also caused US consumer pork prices to increase. In May, average retail was at an all-time high of $4.10/pound, a 15% increase from the same time in 2013. Increased pricing is persuading big buyers to import pork from other markets. Such a move will likely hit the US pork industry hard, since the US exports almost a quarter of its yearly pork production.

PEDv is certainly a threat to the US pork industry, as the industry is known for low prices and large output. Skyrocketing costs in the US is reshaping global trade: other markets are stepping in and creating their own exporting opportunities.

Wall Street Journal

The USDA projects that US pork exports will plummet by 190,000 tons to 2.2 million tons in 2014. This April, exports to China dropped 13 percent from April 2013, and 37 percent from March 2013. China is the biggest global consumer of pork, and was the US pork industry’s third-largest importer from April 2013 to April 2014.

The USDA reports that Brazil’s exports are expected to grow by 55,000 tons to a total of 675,000 tons. Canada’s exports increased by 16 percent from January to April, compared to export rates from a year earlier. The USDA also projects that Canada’s exports will grow by 20,000 tons to 1.3 million tons in 2014. A majority of these exports will be to the US and China.

Europe’s pork industry has also become victim to disease, the African swine fever, which is disrupting its trade with Russia. Russia banned pork imports from the EU this past January. Similarly, China has placed a ban on pork imports from Poland. Japan’s pork industry has also been hit with PEDv, which has wiped out over 200,000 piglets since Fall 2013.

June 24, 2014

www.fluidmanagementsystem.com subodh@fluidmanagementsystem.com

Hog prices have been steadily declining for the past four months, and are currently at a low. The reasons behind the decreasing demand for pork are interesting, mostly due to economic concerns.

US consumers have opted for inexpensive meats, like chicken, instead of pork; additionally, consumers are feeling certain economic pressures, such as rising prices at the pump.

Pork exports have already dropped 15% from last January, as the big meat buyers — China, Japan, Mexico and Russia — curtail purchases. In the last few years, the US has become fairly dependent on pork exports, as China is the world’s biggest pork consumer. However, as China’s population and demand for the meat grows, the country has stocked up on plenty of domestic supplies. Japan is the US’s biggest buyer, but has been experiencing a weak economy and currency, and doesn’t have the funds for pork exports. Russia has chosen to no longer buy pork from the US, since many US pork farms give their pigs medicated feed that generates leaner meat.

As domestic and international demand for pork decreases, US farmers are faced with larger inventories of pork. People begin to buy more pork during the warmer months, but the continued cold weather has delayed the spring and summer grilling season.

It is hard to say if this trend is cyclical or the economics are changing more structurally.

Conceived, Developed and Written by Dr. Subodh Das and Tara Mahadevan

May 16, 2013

www.fluidmanagementsystem.com subodh@fluidmanagementsystem.com

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Tag Archives: Russia

“Global Pork Market Starts to Shift” – Wall Street Journal, 20 June 2014

“Hog Prices Slide as Demand Wanes” – Wall Street Journal, 20 March 2013