Hog futures rose to a record, joining this month’s cattle rally to an all-time high, as supply concerns mounted amid a spreading virus that kills piglets and signs emerged that Russia may lift a ban on U.S. pork imports.
Porcine epidemic virus, or PED, has killed more than 4 million pigs in the U.S., according to the National Pork Producers Council. Itar-Tass reported yesterday that Russia will resume imports of U.S. pork without the livestock-feed additive ractopamine on March 10.
Through Thursday, hogs jumped 22 percent this year, the second-biggest gain among 24 raw materials in the Standard & Poor’s GSCI Spot Index. Demand for pork has increased as beef costs climbed. U.S. consumers will pay as much as 3.5 percent more for meat this year, compared with a 1.2 percent advance in 2013, the government has forecast.
The market "is looking at two issues: the seasonal decline in slaughter, which starts in April, and the trade has a very clear expectation that PED will be a March or April issue, not just a summer issue," Rich Nelson, the director of research at Allendale Inc. in McHenry, Illinois, said in a telephone interview.
Hog futures for April settlement climbed 0.7 percent to $1.0455 a pound at 7:54 p.m. Feb. 27 on the Chicago Mercantile Exchange. Earlier, the price reached a record $1.05075.
Global AgriTrends, a Denver-based research company, has said the PED virus may kill as many as 5 million pigs, or about 4.5 percent of the animals sent to processing plants last year in the U.S., the world’s biggest pork exporter.
On Thursday, hogs jumped 2.8 percent, the most since March 7, after climbing by the exchange limit of 3 cents, partly on speculation that demand for pork will increase as a cheaper alternative to beef.
"We’re putting out 5 percent to 6 percent less beef than last year," Nelson said. "People are scrambling for pork to fill this beef deficit."
Cattle futures for April delivery rose 0.1 percent to $1.4465 a pound. During the trading day Thursday, the price reached a record $1.45975.