May 4, 2009

The US pork industry could take weeks or longer before producers recover from export restrictions caused by the worldwide flu outbreak, according to agricultural economist Chris Hurt.

Key markets such as China and Russia have limited imports of US pork and other countries had followed their leads, said Hurt.

There are also consumers worldwide that linked the word 'swine' to pork, even though the flu strain did not come from pigs, and this also affects the world economy growth as demand for food products would be reduced in general, said Hurt.

No cases of the new H1N1 strain have been reported in pigs and properly handled and cooked pork is safe to eat, but the public misunderstand about the virus has hurt the pork industry, he said.

Hurt said China and Russia represented 27.4 percent of US pork exports in 2008, and any loss of sales to them will lower pork prices. May lean hog futures have dropped eight percent since Friday (Apr 24), closing at about US$63.30 per hundredweight, or more than US$5 lower, he said.

Hurt said the H1N1 outbreak is the latest setback for pork producers, as the industry has been making losses since the fall of 2007. Producers are near break-even now, but they are unlikely to return to profitability by May as initially hoped, he said.

But even so, Hurt do not think the pork industry will be as hurt as the beef and poultry industries did when the mad cow disease and bird flu visited in late 2003 and 2005-06, respectively.

"Pork producers should not panic. The immediate reaction of humans and markets to situations like we have now is often more severe in the short term than the long term," Hurt concluded.