Missouri pork producers were counting on an upswing in sales this summer … that was before the H1N1 virus — or swine flu — came along.
Even though officials are now calling the swine flu by its proper name, H1N1, the damage has already been done.
Ron Plain, Extension Economist at the University of Missouri, says projections are that the flu scare will cost the pork industry an estimated $400 million over the next four months.
He says producers have few options. Some of them might choose to delay taking their hogs to market. But bigger hogs bring less money at market.
"Farmers are keeping hogs back," he says. "Some choose to put off going to market, but when you do that, the pigs keep getting bigger."
Missouri pork producers were counting on regaining recent losses during the typical summer rally for pork. During summer months when production is down and demand is up, farmers can recoup losses from the previous season.
"Normally, this time of year, prices are moving steadily higher," he says. "We simply have less pork on the market in the summertime than we do other times of the year, so we normally have a strong increase in prices going on and we’re going the other way fast right now with lower prices."
Plain says pork producers lost money 16 of the last 18 months.
"May futures dropped $10 a hundred weight, which is 20 a head," Plain says. "June is down $14 a head in expected value. We think all of that was due to scare from flu outbreak."
Last week’s prices were down $12 to $14 a head lower last week, he says.
China, Russia and the Ukraine have refused to accept pork from the United States because of the virus. Those countries alone imported nearly 30 percent of American pork last year.
Economists say the 1.28 billion pounds bought by the two countries made up a huge portion of the 5 billion pounds of exported pork in 2008, making China and Russia the second and fourth largest U.S. pork buyers. American hog farmers produced 23.3 billion pounds of pork in 2008.
Missouri is among the top ten states in the nation in pork production and produces 6 percent of all pork in the United States.
Egypt ordered the slaughter of some 300,000 hogs in response to the virus, which has yet to even be detected in Egypt.
While the Centers for Disease Control and other health officials stress that the "swine flu" cannot be spread through pork products or being around pigs, the agricultural industry is hoping other countries don’t follow suit.