Pedv:Helping the Cattle Market

Porcine Epidemic Diarrhea Virus (PEDv) is an outbreak of a virus in the pork industry that has effected pork producers in the United States as well as neighboring countries. Once this virus spreads it is liable to take out the entire herd which is going to and has taken a significant amount of pork out of the market. According to Rabobank, they estimate American Pork Production will be down 6% to 7% in 2014 which is the largest decline in 30 years. I would like to say I saw this day coming since hogs are now mainly raised in confinements where once one pig gets sick they all get sick but I didn't.

Anyways, enough about the pork producers lets talk about how this is going to help out the cattle market or the beef side of this equation. Some people may not think other commodity markets such as corn or hogs for this instance can effect other markets but they do and should be watched closely. For starters, I believe is it going to tremendously help out beef producers and take some pressure off of the record breaking prices in the cattle market. 

For awhile, the cattle market would go up and consumers and other factors would push back and drive the price back down but as of recently we have seen the market going up or staying steady. One reason I believe this true is beef producers realize people are going to have to keep buying beef despite what the price is because pork is going to go up as well. Basically, what this means is consumers can't rely on buying pork as an alternate for beef when the price goes up. Also I believe consumers are accepting that the price of beef was going to eventually go up just like everything else and they are now getting used to the rise in price. So with beef and pork production both going down and with even more people out there to feed this is creating a perfect storm in the cattle market that was much needed for beef producers.