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Inaccurate flu reports affect pork industry

"Inaccurate media reports are negatively affecting U.S. pork producers and the reputation of U.S. pork as a quality and safe product. That's hurting producers economically and threatening U.S. pork export markets," said National Pork Producers Council CEO Neil Dierks.

By Jennifer Bremer


(Photo courtesy of National Pork Board.)

While agriculture and health officials continue to stress that H1N1, formerly known as "swine flu," is not spread by pigs or eating pork, the pork industry has suffered through a decrease in market prices and effects from international trade issues.

This strain of the flu has spread to 21 countries and every major region of the United States, with 1,085 cases worldwide as of May 4, including 286 cases in 36 U.S. states. As of May 5, there have been two deaths in the United States.

The National Pork Producers Council has been working diligently to help prevent any more losses for U.S. pork producers, even though the virus is not of pig origin.

"We strongly urge the media to accurately report about the H1N1 flu virus and the safety of pork consumption," said NPPC CEO Neil Dierks. "Inaccurate media reports are negatively affecting U.S. pork producers and the reputation of U.S. pork as a quality and safe product. That's hurting producers economically and threatening U.S. pork export markets.

"Everyone should be focusing resources on finding a solution to this public health threat, not making unscientific claims," he said.

Economic squeeze to pork industry

The incorrect naming of the H1N1 flu, as "swine flu" has compounded the economic squeeze the U.S. pork industry has experienced the past 19 months, when producers lost an average of $20 per hog. Since the flu outbreak became a major news story, producers have lost another $6 per pig, with average hog prices falling from $124 a head on April 24 to $118 on April 28. That decline cost the industry nearly $2.5 million a day.

Despite continual reassurance from health and food safety experts that pork or pork products do not spread the H1N1 virus, consumers have shied away from pork. Foreign governments have also overreacted to the issue.

"USMEF is working in each of our markets to prevent expansion of these obstacles to trade, and to limit the scope and length of any trade suspensions," said Philip Seng, president and CEO of the U.S. Meat Export Federation.

USMEF's efforts include frequent contact with trade and food safety officials in overseas markets in order to provide sound, scientific facts that they are able to use to reassure the public about the safety of U.S. pork. In some cases, the results have been highly successful as several major trading partners have resisted pressure to impose bans or restrictions on pork imports. Japan, South Korea and Taiwan are just a few examples of markets in which U.S. pork continues to be readily available to consumers, and where health officials have emphasized the safety of pork.

"The majority of our trading partners have stepped up to the plate and followed sound science on this issue," said Seng. "The bans imposed by Russia, China and some other markets are quite frustrating, however, because they have no scientific basis and are simply adding to the confusion and unfounded fears about pork."

Chad Russell, USMEF regional director for Mexico and the Dominican Republic, said it is hard to separate the impact the flu has had on pork from the widespread slowdown in the general buying activity. "We have definitely seen some shift away from pork as the protein of choice, as many consumers appear to be choosing poultry, beef and other food items instead."

Russell said USMEF has been very successful in communicating with the government of Mexico and preventing any trade restrictions from being imposed. USMEF is also carefully gathering market intelligence and working on plans to rebuild pork demand in this critical export market.

"The entire economy in Mexico is suffering mightily right now, and we know its recovery will take some time," he said. "But we also know this is an outstanding market for U.S. pork and beef, and we are taking steps to ensure that we are well-positioned to have continued success here in the future."

Animal health issues

Additional analysis conducted by the Canadian Food Inspection Agency of the H1N1 flu has re-affirmed that the virus found in swine at a farm in Alberta, Canada, is the human strain. The CFIA has fully isolated and contained the situation on the Alberta farm. The chance that these pigs could transfer virus to a person is remote.

"We are confident that Canadian authorities are taking all necessary steps to protect the public and the pork industry," said U.S. Secretary of Agriculture, Tom Vilsack. "The international scientific community agrees that pork is safe. We are urging all countries to remove any restrictions on the movement of pork that are not based on sound science. A strong and respectful relationship is vital for pork industry in both Canada and the United States."

Influenza viruses do not affect the safety of pork, according to the World Health Organization and the Food and Agriculture Organization of the United Nations. As with any raw meat, pork should always be properly handled and cooked, to eliminate a range of food safety concerns.

The Canadian Minister of Agriculture and Agri-Food, Gerry Ritz; Secretary Vilsack; and Mexican Secretary of Agriculture, Livestock, Rural Development, Fisheries and Food Alberto Cardenas joined together in a statement to stress the importance of continual normal trade of pork products worldwide:

"We strongly urge the international community not to use the outbreak of the H1N1 influenza as a reason to create unnecessary trade restrictions and that decisions be made based on sound scientific evidence. H1N1 influenza viruses are not spread by food. International organizations, including the WHO, FAO and the World Organization for Animal Health, all reiterate that the consumption of pork meat and related products do not present a health risk of contracting H1N1 influenza. All three of our countries are committed to ongoing monitoring and vigilance in both public and animal health."

Pork economy

Purdue University agriculture economist Chris Hurt fears economic conditions could worsen for pork producers before they get better.

"You've got other countries starting to follow the lead of Russia and China by limiting their import of our pork. Then there are the consumers worldwide who are linking the word 'swine' to pork, even though this influenza strain did not come from swine. And then there's the world economy in general," he said.

"China and Russia represented 27.4 percent of our pork exports in 2008. Any loss of those sales to those important markets will lower pork prices," he said. "May lean hog futures have fallen 8 percent since April 24, closing at about $63.30 per hundredweight, or more than $5 lower.

"This is, in essence, the market anticipation of what this flu event means over the next few months. The concerns are that this flu could reduce U.S. pork exports, that U.S. consumers could reduce pork consumption and, more broadly, that the flu could cause a slowing of world economic growth, which would reduce demand for food products in general."

China and Russia are the second and fourth largest international buyers of U.S. pork, respectively. Together, the two nations imported 1.28 billion pounds of the nearly 5 billion pounds of pork exported from the United States in 2008.

Hurt said the pork industry has been stressed economically since the fall of 2007, with the flu outbreak being the third major shock to the industry in the past 18 months. Sharply rising feed prices in late 2007 and 2008, and the global financial crisis this past fall have put pressure on profitability, as well.

"The pork industry uses 28 percent of the grains fed to livestock and 23 percent of the protein meals fed to livestock," Hurt said. "If this flu event causes demand for pork to drop, that means less usage of corn and soybean meal, with downward impacts on those prices, as well."

However, Hurt doubts that hog farmers will be hit as hard by the H1N1 outbreak as beef producers were by the U.S. bovine spongiform encephalopathy cases in late 2003 or the poultry industry by avian influenza in 2005 and 2006.

"Both beef and poultry exports were negatively impacted," Hurt said. "In fact, U.S. beef exports have only recovered to about 75 percent of their 2003 levels."

Hurt said the reaction to this flu outbreak will likely be more severe in the short term than the long term.

Jennifer Bremer can be reached by phone at 515-833-2120 or by e-mail at jbremer@hpj.com



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