Assessment of the economic impacts of porcine epidemic diarrhea virus in the United States

Abstract

Porcine epidemic diarrhea virus (PEDV), which first emerged in the United States in 2013, spread throughout the U.S. hog population. Limited preemptive knowledge impeded the understanding of PEDV introduction, spread, and prospective economic impacts in the United States. To assess these impacts, this article reviews the timeline of PEDV in the United States and the corresponding impacts. PEDV is a supply-impacting disease and is not demand inhibiting, as pork demand remained strong since PEDV first appeared. Pig losses reached significant levels during September 2013 through August 2014, with the majority of pork production impacts occurring in 2014. PEDV had differing impacts for subsectors of the pork industry. A budget model demonstrates that producers could have had pig losses and decreases in productivity proportionally smaller than price increases, resulting in net returns above what was expected before the major outbreak of PEDV. Previous literature is reviewed to identify the potential main industry beneficiaries of the PEDV outbreaks in the United States. As a result of reduced volumes of available pig and hog supplies, reductions in annual returns likely occurred for packers, processors, distributors, and retailers. In addition, pork consumers who experienced reduced-supply-induced pork-price increases were likely harmed directly by higher prices paid for pork and indirectly as prices of competing meats were also likely strengthened by PEDV. This article also identifies future considerations motivated by the appearance of PEDV in the United States, such as discussions of industry-wide efficiency and competitive advantage, the future role of PEDV vaccines, enhancement in biosecurity measures, and consumer perceptions of food safety and insecurity.

Figure 1.

Swine health monitoring project: PEDV incidence analysis. This figure presents the PEDV exponentially-weighted moving average (EWMA) epidemic monitor (left vertical axis) with preliminary epidemic threshold based on 2013/2014 seasonal incidence. This figure also monitors the actual weekly number of incident cases of PED (right vertical axis). Updated through October 31, 2014. Source: UM SDEC, 2014.

Figure 2.

Quarterly U.S. sows farrowing and farrowing intentions. This figure presents USDA Hogs and Pigs report data regarding producers farrowing levels for the previous quarter and farrowing intentions over the next two quarters. Source: USDA NASS, 2015a.