Around 7 million pigs have died over the past year in the U.S. from porcine epidemic diarrhea virus, a disease that does exactly what its name suggests, leading to leaner pork supplies. But Americans haven’t lost their appetite for ribs and bacon, so farmers have been compensating for the reduced headcount by raising larger animals.
In an earnings call Monday, Tyson Foods (TSN) Chief Executive Donald Smith projected industrywide pork production to drop as much as 4 percent for the year. Still, it wasn’t all bad news: “[H]eavier weights partially offsets fewer heads, and we were able to make up some by improving yields.” Some farmers are holding their pigs back from slaughter for a week or two longer than usual, resulting in weights that are 3 percent to 4 percent higher than a year ago, Tyson spokesman Gary Mickelson said in an e-mail.
Here’s how U.S. pork production this past winter compared with previous years, according to data from the U.S. Department of Agriculture:
Not only are producers compensating for smaller numbers of pigs, but higher prices have also helped to preserve profit margins. Tyson’s average pork prices in the six months ended March 29 jumped 9.6 percent, and the operating margin for pork during the period increased to 7.8 percent, a gain of nearly half a percentage point from a year ago.
Fatter pigs can’t solve the problem posed by the virus indefinitely, however, and the pork industry recently asked the USDA to investigate and help find new ways to control the spread of the animal illness.
