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U.S. pork market snapshot: Production acceleration expected

June 5, 2014
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Annual pork production has made meager gains for much of the last two years. This production — which includes slaughtering, processing and preserving pork — is 0.8 percent above the year-ago level. With positive momentum in the rates of change (see “Rate-of-Change” chart above), we expect accelerating rise in production in the months ahead.

The supply of pork has been reduced because of the influx of porcine epidemic diarrhea virus (PEDV). Since the first confirmed case of PEDV in early 2013, it has spread to 28 states and has resulted in the culling of millions of young pigs and lowering pork supply. As a result, prices have risen steeply. The Producer Price Index for Pork is 16.5 percent higher than last year. Producers have had some ability to pass these higher prices on to consumers, with the Consumer Price Index of Pork up 5.3 percent over the last year. Higher prices should drive production higher as long as herds can be kept free of disease.

Recent Articles by Richard Branch, ITR Economics

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