Hog virus contributes to outlook for higher wholesale and retail pork prices
Retail pork prices have been rising in recent months, increasing 2.8 percent in the first quarter of 2014. Higher prices at the meat counter are partly due to increasing farm prices for hogs, which rose 41 percent over the same time period. Higher hog prices to date are, in part, the result of strong demand, particularly in export markets, as well as the high price of pork substitutes such as beef and poultry. In addition, the outbreak of Porcine Epidemic Diarrhea virus (PEDv) has increased piglet mortality, reduced litter sizes, and lowered forecasts for U.S. hog slaughter and pork production later in 2014. Farm prices provide early indications of changes at the wholesale and retail levels, although price swings at those levels are dampened by processing, transportation, and retailing costs. The recent increases in hog prices indicate that the current inflation in retail pork prices can be expected to gain momentum in coming months. ERS forecasts wholesale pork prices to increase 7 to 8 percent in 2014 and retail pork prices to rise by 3 to 4 percent. More information on ERS’s food price forecasts can be found in the Food Price Outlook data product, updated June 25, 2014.
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