Pig producers are among the immediate financial victims of the H1N1 flu outbreak as hog prices plunged.
Several countries banned or restricted North American pork and nearby Chicago hog futures plunged on the flu news last week, falling to near $56 US per hundredweight by the Western Producer’s deadline May 4 from $69 April 27, a drop of $13.
Contract months for the summer fell about $5 in the same period . The October contract dropped less than $3.
Futures prices had firmed May 1 as information accumulated about the new flu virus, indicating it could be less dangerous than initially thought. But after the weekend discovery of an flu-infected Alberta hog herd, futures resumed their downward trend.
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Many analysts say it is too early to fully assess the disease impact, especially considering the discovery of H1N1 in a commercial swine herd in Alberta.
“This discovery will make efforts to distance pork from ‘swine flu’ more difficult this week,” said the Chicago Mercantile Exchange’s Daily Livestock Report May 4.
“Our sources indicated that retailers slowed pork orders last week, taking a ‘wait and see’ posture on whether domestic pork demand was indeed damaged. There has still been no transmittal from pigs or pork to humans, so the battle is not lost but a continuation of ‘wait and see’ ordering could put more pressure on markets.”
Glenn Grimes and Ron Plain noted the same uncertainties in pork markets and demand in their May 1 Hog Outlook.
“Some people have a personality that what bad can happen will likely happen. That is what has happened to the hog industry this week,” said the report.
“It is too early to tell if the flu will negatively impact pork or live hog demand. Let’s hope not but only time will tell.”
