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Hogs Extend September Rally on Concern Virus Reduced U.S. Herd

Sept. 27 (Bloomberg) -- Hog futures rose, heading for a second straight monthly gain, on mounting concern that a virus is killing piglets and reducing the size of the U.S. herd.

The U.S. Department of Agriculture probably will report today that the herd on Sept. 1 fell 1 percent from a year earlier, partly because of the spread of porcine epidemic diarrhea virus, a survey of 10 analysts by Bloomberg showed. Cash prices for U.S. hogs are up 34 percent from a year ago, and government data show wholesale pork gained 7.8 percent this month to a five-week high of $1.0236 a pound.

“The tightness we are having right now, it’s real and it has been since August,” Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. Today’s USDA report is “going to give us an idea how serious the virus is,” he said.

Hog futures for December settlement rose 0.5 percent to close at 88.125 cents a pound at 1 p.m. on the Chicago Mercantile Exchange, capping a weekly gain of 2.4 percent. The contract is up 4 percent this month.

The U.S. herd probably fell to 67.463 million hogs on Sept. 1, compared with a year earlier, the first decline for that time of year since 2010, the Bloomberg survey showed. The USDA will release its quarterly estimate at 3 p.m. in Washington.

The PED virus has been found in at least 17 states with 644 cases since April, the American Association of Swine Veterinarians estimates. The disease infects suckling pigs, which are three weeks old or younger, with a mortality rate seen as high as 100 percent, a National Animal Health Laboratory Network report showed Sept. 25. The disease affects older hogs by slowing growth.

To contact the reporter on this story: Dalton Barker in Chicago at dbarker40@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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