Australia-Sorting fact from fiction and dishonest reporting, in regard to swine flu and its mistaken association with Pigs.

The emergence of the A/H1N1 influenza virus couldn’t have come at a more terrible time for pork producers than it did.

Because of its mistaken association with pigs, pork has taken a toll on the US hog markets so far this week.

Lean hog futures collapsed on Monday, the first three months by daily limits - $3/cwt - and again yesterday, the first three by nearly their daily limits as traders dumped hog positions on the grounds that demand for pork will fall hard, according to sources from Feedstuffs journal in the US.

Traders’ assumptions embraced domestic and export demand as both conventional and social media over the weekend called the flu the "swine flu".

They made references to how one can contract it from being around pigs and/or consuming - even touching - pork, sources said.

Nothing is further from the truth, but even as soon as Sunday, when government and industry moved to get out the truth, the damage had been done.

US hog markets and stock values for hog/pork-based companies came undone, although cash hogs have held steady, and pork prices have been mixed.

May, June and July hogs lost $5-6 in the first two days this week, which means - punching the spring and summer futures back to a cash hog market - the only opportunity pork producers had to break even or even make a little profit this year has now been wiped out.

Producers, who experienced their second-greatest loss in history last year, will lose money this year for the 27th consecutive month.

In Des Moines this week, US National Pork Producers Council chief executive officer Neil Dierks told Feedstuffs that producers are concerned.

Here is a disease that has not been reported in pigs in the US - or anywhere in the world - that, in fact, is more transmissible by people to pigs than pigs to people and is not in pork, he said, but references to the contrary are devastating the industry.

"It just came out of left field," Dierks said.

"Against a backdrop of what has been a difficult 19 months" of losses and what had been expected to be profitability this spring and summer, "this has let a lot of air out" of producers’ hopes, he said.

Dierks said he hopes the outbreak can be kept under control for public health, but he also emphasised that pigs and pork are safe.

"We really want people to recognise the safety and wholesomeness of pork," he said.

Dierks commended the government and industry coordination of that message, the extent to which producers have stepped up biosecurity programs and the extent to which federal, state and practising veterinarians have provided support.

"It’s been ’all hands on deck’ to make sure that herds are not infected, that animals are protected and that pork is safe," he said.

Analysts not expecting lengthy impact on markets

Meanwhile, company stocks also took a battering on Monday. Stock prices for:

• Smithfield Foods Inc., the largest hog producer and pork processor in the US, dropped $1.28 to $9.04;

• Tyson Foods Inc., the second-largest pork processor, fell 97 cents to $9.96, and

• Hormel Foods Corp., the fourth-largest pork processor, fell 64 cents to $29.99.

The three stocks all gained back a few cents on Tuesday.

Brazil-based JBS USA is the third-largest processor.

Cargill Inc., the fifth largest, is not publicly traded.

Meanwhile, Moody’s Investors Service held its credit ratings for pork processors unchanged, noting that the impact of the flu outbreak on the hog and pork markets has not yet affected the companies’ financial positions, although it did issue a negative outlook for Smithfield and Tyson.

Food stock analysts also have shown patience with the situation, holding their buy recommendations steady and saying media coverage - and "mis-coverage" - has placed undue pressure on stocks.

Some have suggested that the lower prices provide buying opportunities.

In a note, Christine McCracken at Cleveland Research Group in Los Angeles, Cal., noted that US consumers did not desert beef or chicken after the discovery of BSE in cattle and avian influenza in chicken - diseases that she emphasized were actually found in those animals, as opposed to the current flu, which has not been found in swine.

Consumers generally trust the safety of the US food supply, and while there may be "an initial one- to two-day panic period, (we) do not expect much of a long-term impact on pork demand."

The greatest risk, she said, may be disrupted export markets as certain countries move to ban US pork.

This already is the case as both China and Russia have placed stops on US pork - China from the six states reporting outbreaks as of Tuesday and Russia from those states and an additional seven - and Russia has also banned US beef and chicken from five of the 13 states on its list.

However, sources noted that China and Russia use any occasion to ban US meat and poultry, and one source suggested that the bans may actually be excuses to get lower prices on products shipped to those countries.

China last year was the sixth-largest importer of US pork, while Hong Kong, which, as of this morning, had not banned US pork, was the third largest. Russia imported more US pork than did China, but came in way behind Hong Kong.

What’s critically important, agricultural economists Steve Meyer and Len Steiner noted in their "Daily Livestock Report" this morning, is that Mexico, which is experiencing horrific outbreaks of the flu and which is the second-largest export market for US pork producers, has not banned US pork.

"Mexico is much, much more important in about every way" than China and Russia, they said, as it accounts for more volume and value as well as more growth in US pork sales.

They also suggested that US pork probably will make its way into China through Hong Kong as other banned US meat has in the past.

The epicenter of the flu outbreak is thought to be Veracruz, Mexico, where a 12-year-old boy was the first to come down with the H1N1 strain.

It is near where Smithfield has a joint-venture hog complex.

However, Smithfield announced Monday that employees and hogs at Veracruz and its other joint ventures in Mexico show no clinical signs or symptoms of the disease - nor do employees or hogs in its herds in the US or any of its other worldwide operations, the company announced yesterday.

The 12-year-old boy has fully recovered.