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Thursday, May 14, 2009

Georgia Farmers: Swine Flu Hurt Pork Sales

Story from AJC.com

Georgia’s hog farmers feel the H1N1 virus, which was quickly labeled “swine flu,” slung a lot of mud on their industry.

Even though experts said immediately that people couldn’t catch the virus from eating pork, consumers cut back anyway because of a fluke in the naming of the flu. The virus is a combination of human, avian and swine flus, but it became known as “swine flu.”

Despite the federal government’s attempt to rename the flu, some markets saw a halt in pork sales as recently as last week.

It all spelled bad news for Georgia’s pork farmers.

Bill Smith of Smith-Healy Farms Inc. in Statesboro, which produces about 40,000 pigs a year, said prices for his hogs have fallen about 25 percent since the outbreak.

Smith and other hog farmers already were suffering because of higher feed costs driven by a surge in oil prices last year. When higher oil costs spurred an interest in ethanol as a fuel source, hog farmers saw their feed costs more than double as ethanol producers started gobbling up corn and soybeans to make fuel.

“When someone comes out and arbitrarily names something ‘swine flu’ when we’re already in a losing situation to begin with, it makes it extremely difficult,” Smith said.

Smith’s woes are playing out across Georgia’s $90.4 million pork industry, said John McKissick, director of the University of Georgia’s Center for Agribusiness and Economic Development.

Consumers, however, seem to have regained their taste for pork. Glynn Jenkins, a spokesman for Kroger’s Atlanta division, said the grocery chain’s pork sales have stabilized after a dip at “the height of initial media reports about the H1N1 virus.”

McKissick said it’s too soon to tell what the long-term impact of H1N1 will be. But he said several factors will determine the pork producers’ future: ongoing consumer response to the flu, grain prices and reaction from countries that buy U.S. pork. About 20 percent of U.S.-grown pork is exported. More than a dozen nations banned U.S. pork after the flu outbreak.

If reaction to the flu drags out — or increases in the fall when it is expected to return — then “there would probably be further cuts in the industry,” McKissick said.