“It’s Economics 101,” Dr. Jayson Lusk, an agricultural economist who is also dean and vice president of the Division of Agricultural Sciences and Natural Resources at Oklahoma State University. “When you adopt a cost-saving technology, it will likely increase production, lower costs, increase supply and lower prices. So, the main question is how big will those effects be and how will it affect producers?”
The technology Lusk is talking about is the gene-edited PRRS-resistant pig developed by PIC. And per Lusk’s economic model, we’re talking potentially big cost savings – porcine reproductive and respiratory syndrome, or PRRS, is endemic to pig herds around the world and it costs farmers both financially and emotionally.
Indeed, research from Iowa State University indicates that between 2016 and 2020, PRRS cost the U.S. pork industry $1.2 billion per year in lost production.[1] A 2020 report commissioned by Animal Health Canada estimated production losses to PRRS in this country to be $184 million per year (up to 2018).[2]
If the PRRS-resistant pig could lower, or even eventually eliminate those losses, what would that do to the global pork market and economy? What could happen to global supply and trade? To production costs and retail prices? To producer profitability? To pork’s place on consumers’ plates?
[1] Growing Losses from PRRS Cost Pork Producers $1.2 Billion Per Year, New Study Shows. Iowa State University News Service. July 30, 2024. https://research.iastate.edu/2024/07/30/growing-losses-from-prrs-cost-pork-producers-1-2-billion-per-year-new-study-shows/
[2] Inventory Assessment and Gap Analysis of Canada’s Prevention, Preparedness, Response, and Recovery from and Animal Health Event. NFAHWC report prepared for the Animal Health Canada Working Group. February 13, 2020. Page 15. https://www.ahwcouncil.ca/pdfs/AHC_Gaps%20Analysis%20Report_February%2013_EN.pdf
Lusk set out to answer these questions with an economic model that links the supply of market hogs to consumer demand in six major pork-producing regions.[1]What his research found is adoption of the gene-edited PRRS-resistant pig should be largely beneficial to producers and consumers alike, but there are some interesting tidbits in terms of how those benefits could roll out.
Increased productivity, lower production costs
The economic model Lusk built looked at retail-level demand for pork with farm-level hog supply in Canada, China, Japan, Mexico, the U. S. and an aggregated rest-of-the-world (ROW) as the sixth region. Model parameters included, among other things, current production and trade statistics, supply and demand trends, and PRRS prevalence rates in each region.
“The advantage of going through a modelling exercise is that it lets you work through some ‘what if’ questions,” says Lusk. “So, if there were tariffs or import bans or reduced consumer demand, what would happen?” Conversely, what would happen if adoption rates were very low or very high?
While there are many nuances in Lusk’s results, the top line of his research is this: the introduction of the PRRS-resistant pig will likely be positive for pork industries where this technology is adopted. Yes, pork supply will rise and that will result in lower prices, but these will be offset by the significant decrease in marginal production costs associated with a disease-free herd. And any trade or consumer resistance would have to be extremely high to dim these benefits.
[1] Lusk JL. Global adoption of porcine reproductive and respiratory syndrome-resistant pigs will have significant economic and market impacts. American Journal of Veterinary Research. August 2025.
https://avmajournals.avma.org/view/journals/ajvr/aop/ajvr.25.05.0188/ajvr.25.05.0188.xml?tab_body=fulltext
But these will not be overnight changes, Lusk says. The model assumed a 70 per cent prevalance rate of PRRS-resistant pigs in the five countries by year 12 of introduction. That is not necessarily typical of all new technologies.
“Take GMOs in the late 1990s. That technology went from zero to 100 per cent in about five years,” says Lusk, adding that plant breeding and seed multiplication can be done fairly quickly compared to animal technology. “Breeding enough PRRS-resistant pigs to get into the supply chain takes time, so there is an underlying recognition of the biology at play in the premise of that adoption rate.”
So, if slow and steady wins the race, what will that race actually look like as this technology unfolds?
Productivity vs. production costs
Unsurprisingly, Lusk’s model projects that as pork production rises with the introduction of PRRS-resistant pigs, hog prices will fall. Indeed, his model projects prices to fall in the U.S. and Canada by about 25 per cent by year ten before they stabilize. But don’t panic.
“What people forget is the cost of production versus net profit.” He explains that as PRRS-resistant technology adoption grows, the cost of production significantly likely drops over time. Lower mortality rates, healthier pigs, more viable pigs per sow per year, lower antibiotic costs and no more de-pop/re-pop expenses all lead to a considerable drop in the marginal cost of production – that is, the cost of producing one more kilo of pork.
In Canada, for example, Lusk’s model projects that by year 10, hog production increases by 7%. While the resulting expansion in supply puts downward pressure on hog prices, marginal production costs decline even further. As a result, producers who adopt the technology are producing more pigs and earning higher profits per pig than prior to adoption, according to the research.
“Canada exports a much larger share of its production than other countries,” says Lusk. “Success is reliant on its ability to compete in the global marketplace, and cost of production is a key part of that ability.”
Consumer acceptance
New agricultural technologies have always faced some trade and consumer resistance but, according to Lusk, it would have to be extremely high to negatively impact the benefits that PRRS-resistance are set to bring to the global pork market and producers.
“Say the U.S. adopts the PRRS-resistant pig and consumers say no,” says Lusk. “How big a reduction in demand would offset those production gains?”
He says there would need to be a 10 to 20 per cent reduction in willingness to buy before an impact was felt at the farm gate, and that doesn’t seem likely given surveys that indicate consumer comfort with this technology, and the lower retail price it could bring. “It’s more affordable, high-quality pork at lower prices,” he says.
Lusk says adoption of this technology is key to the pork industry maintaining its place on consumers’ plates. “Pork is at a place today where it’s in competition with beef and poultry,” he says.
It comes down to being able to produce a protein that consumers find delicious, of high quality and affordable. If other protein producers adopt technologies that help them achieve that and the pork industry doesn’t, then consumers will likely choose those other products.
“If pork is the most consumed protein 10 to 20 years from now, it’s because this technology was adopted.”
More information on Dr. Lusk’s research can be found here on the PRRS-resistant pig website.
Source:
1. Growing Losses from PRRS Cost Pork Producers $1.2 Billion Per Year, New Study Shows. Iowa State University News Service. July 30, 2024. https://research.iastate.edu/2024/07/30/growing-losses-from-prrs-cost-pork-producers-1-2-billion-per-year-new-study-shows/
2. Inventory Assessment and Gap Analysis of Canada’s Prevention, Preparedness, Response, and Recovery from and Animal Health Event. NFAHWC report prepared for the Animal Health Canada Working Group. February 13, 2020. Page 15. https://www.ahwcouncil.ca/pdfs/AHC_Gaps%20Analysis%20Report_February%2013_EN.pdf
3. Lusk JL. Global adoption of porcine reproductive and respiratory syndrome-resistant pigs will have significant economic and market impacts. American Journal of Veterinary Research. August 2025. https://avmajournals.avma.org/view/journals/ajvr/aop/ajvr.25.05.0188/ajvr.25.05.0188.xml?tab_body=fulltext
