Fear That Flu Could Develop into Pandemic is Driving Markets Lower
Ag Secretary addresses the current situation.
Compiled by staff
Published: Apr 27, 2009
Media reports on a new strain of the swine influenza virus type H1N1 different from any other ever reported in U.S. swine herds serve as a reminder of the need for strict and enforceable biosecurity measures on U.S. pork production operations. Secretary of Agriculture Tom Vilsack has released a statement in regard to the human cases of swine influenza that have been reported.
"I would like to express my deepest sympathies for those who have lost loved ones to the flu as well as those who have been sickened," Vilsack said. "I also wanted to reassure the public that there is no evidence at this time showing that swine have been infected with this virus."
The virus has not been reported to cause illness in pigs in the United States, but it has been associated with illness in eight people in the states of California and Texas. The Centers for Disease Control and Prevention also has reported that the same virus may be responsible for outbreaks of influenza in humans in Mexico.
According to USDA and CDC flu viruses can not be transmitted by food so there is no danger from eating pork. Vilsack says as a precautionary measure he has asked USDA to reach out to agriculture officials in every state to affirm that they have no signs of this virus type in their state. USDA will continue to work with other government agencies to monitor the situation and keep the public informed.
Traders point to swine flu as the reason European stocks and U.S. stock futures are trading lower this morning. Market chatter suggests lean hogs will open at least $1 lower over swine flu uncertainties. Cattle are likely to move lower on spillover uncertainty, and fear drove global markets sharply lower overnight.
"Bottom line, we live in an era where fear drives investment decisions," said Farm Futures Senior Editor Bryce Knorr. "Anytime a new fear arises, investors run to the safety of the traditional risk averse markets; dollar, gold, etc. Pandemic flu outbreaks periodically change history. But far more are predicted than turn into reality. Health officials still don't know enough about this strain to know the significance of the current outbreak, but traders will play it safe until more is known. This will prove to be a gift buying opportunity for end users if this turns out to be one more case of false panic, as is typically the case, but producers face longer-term price risk if it turns out that we're looking at one of those rare global pandemic events."
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