Name of flu virus to blame for decreasing hog prices

Thursday, April 30, 2009 | 12:01 a.m. CDT

COLUMBIA — The price of hogs has decreased significantly as an outbreak of flu has given rise to the threat of a global pandemic.

On Wednesday, Ron Plain, an MU livestock marketing expert, attributed the downward pressure on pork futures to the fact that the virus, initially identified in Mexico, has been named "swine flu."

"The fear is based mostly on the name,” Plain said. "What matters is perception rather than reality."

As the trading ended Wednesday, futures contracts for hogs to be delivered in May closed at $60.45 per hundred pounds on the Chicago Mercantile Exchange. The May futures price dropped $2.85 from Tuesday's close. But the real story is that the overall value of these contracts has dropped $8.55 from Friday's close of $69.

While these contracts are speculative, they reflect the expectation of next month's hog prices, Plain said.

The most significant drop occurred Monday, when the price closed $3 lower than Friday's closing bid, which is also the biggest decline allowed for hog contracts in one day's trading. Daily limits are in place to stabilize price fluctuation in agricultural commodities, Plain said. He recognized the significant decline in contract prices, but said the situation might be worse if daily limits didn't exist.

"Most of the time, hog prices drop because there are too many hogs,” Plain said. He said this week’s drop in prices was  “something totally unexpected.”

This flu strain, identified as a respiratory virus, cannot be transferred by consuming pork.

“There is no reason, scientifically, this should be happening," Plain said of the falling pork prices.

Don Nikodim, executive vice president of the Missouri Pork Association, said pork producers are anxious about misconceptions leading to declining prices. He said concern for the virus has created added frustration for producers, who've already faced increased input costs this year.

“We’ve been looking at nearly 18 months of red ink and this on top of it doesn’t help," Nikodim said.

He said consumer awareness is the industry association's main focus.

"Our major objective at this point is to try to get the correct information out that pork is safe and consumers don’t get the flu virus from eating pork," Nikodim said. "Once we get through the hype and hysteria we’re going through now, hopefully we can move forward.”

Plain said he's concerned the name has already done enough damage.

"Just because people are at zero risk of getting this disease from eating pork doesn’t mean they aren’t going to stop eating pork,” Plain said.

To date, this particular virus has only been found in people. “The virus has not been found in pigs in either Mexico or the United States," Beth Young, veterinarian and swine disease expert for MU Extension, said in a news release late Wednesday. "There has been no documented contact with pigs among people infected with the virus in either country.”

President Barack Obama on Wednesday signaled that his administration would refer to the disease as H1N1 flu, not swine flu, The Associated Press reported, in a nod to hog farmers and meat packers. Homeland Security Secretary Janet Napolitano on Wednesday also dropped "swine flu" from her prepared remarks to a Senate panel.

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Ray Shapiro April 30, 2009 | 3:44 p.m.

I think I'll start referring to it as the Illegal Immigrant Influenza!
(We should have stopped it at the border.)

(Report Comment)
John Schultz April 30, 2009 | 4:10 p.m.

Ray, what's your proof that the flu is being transmitted by illegal aliens? How did they hop flights to Australia, Sweden, and various other countries? What's to say legal aliens or honest-to-goodness citizens didn't bring it back themselves? Sheesh.

(Report Comment)

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