Uncertainty surrounding total swine herd losses to the Porcine Epidemic Diarrhea virus has lean hog futures for spring and summer contracts at record-high levels.
Purdue ag economist Chris Hurt says the industry doesn’t know how big those losses are just yet. “We think the winter months are the months that we have the largest death loss,’ he says. “What that means is that as we get to April through August is going to be that time period when we expect the death loss last winter and into this spring will really show up.”
Hurt tells Brownfield futures markets are anticipatory markets. “What we don’t know is how big that death loss is,” he says. “Buyers and sellers in the marketplace come up with – an anticipation. I think this is a situation where perhaps we may see a “buy the rumor”. The rumor drives the prices up – but the reality might be quite as extreme as death losses as what is expected.”
Hurt says the March 28th Hogs and Pigs report will give the markets their first look at how much affect PEDv will have on the hog supply.