Why are American pork producers being hit hard?
American pork producers hit hard
The US government is vaccinating the public against the H1N1 flu with unprecedented speed and efficiency, but this does nothing for pork producers, an industry deeply affected by the H1N1 flu outbreak. The completely unfounded fear that eating pork might infect people with the H1N1 flu virus has left pig farms facing the most severe financial crisis in their history.
The two-year slump in the hog farming industry is mainly due to soaring feed costs and the global economic recession. But excessive panic over the H1N1 virus caused pork exports to slide faster in the spring, with pork exports plummeting. Since the industry crisis began in the autumn of 2007, the price of each hog at the farm gate has fallen by 23 dollars, or a total loss of 5.3 billion dollars in industry output value. Ronald Plain, an economics professor at the University of Missouri, said that before the expected end of the crisis in mid-2010, possibly thousands of the 67,000 hog farms in the United States may go out of business. Consumers benefit only limitedly. In September, retail pork prices fell 3.9 percent year on year, but farm-gate hog prices plunged 29 percent.
The two-year slump in the hog farming industry is mainly due to soaring feed costs and the global economic recession. But excessive panic over the H1N1 virus caused pork exports to slide faster in the spring, with pork exports plummeting. Since the industry crisis began in the autumn of 2007, the price of each hog at the farm gate has fallen by 23 dollars, or a total loss of 5.3 billion dollars in industry output value. Ronald Plain, an economics professor at the University of Missouri, said that before the expected end of the crisis in mid-2010, possibly thousands of the 67,000 hog farms in the United States may go out of business. Consumers benefit only limitedly. In September, retail pork prices fell 3.9 percent year on year, but farm-gate hog prices plunged 29 percent.