7. Pork Paralysis(5/1/09)
Did they have to call it "swine flu?" Why not la influenza Mexicana or the Mexican jumping bug?
These are undoubtedly the questions America's pork producers are asking themselves as fears surrounding the so-called swine flu pandemic are causing consumers to shun the other white meat and slam their stocks. Despite the fact that the disease is not spread via the consumption of pig products, shares of Smithfield Foods (SFD) and Tyson Foods (TSN) fell 12.4% and 8.9% respectively Monday.
The World Health Organization reported that confirmed swine flu cases rose to 257 worldwide Thursday. The organization also announced it will stop using the term "swine flu" to avoid confusion over the danger posed by pigs. The illness will now be called by its scientific name H1N1 influenza A.The proposed name change, however, is too little too late for commodity investors already slammed by scores of traders bringing their little piggies to market. June hog futures closed down 2.7 cents, or 3.4%, at 66.3 cents per pound on Tuesday after closing down the 3 cents a pound daily limit on Monday. "This is not a food-related issue, it's a person-to-person issue," said Smithfield CEO Larry Pope, complaining about the misnomer. Smithfield, the largest U.S. hog and pork producer, said the flu was not present in hogs or employees at any of its worldwide operations, including its joint venture in Mexico. Unfortunately for Pope and America's other pig purveyors, the world continues to view pork as, well, not kosher. No matter how illogical, countries including China and Russia are banning U.S. pork imports from states such as Texas, Kansas, and California, where cases were reported. Once the swine flu joins the forgotten ranks of mad-cow disease and bird flu, global consumers will regain their taste for bacon, ham, ribs and pork chops. Until that day, the old Wall Street saying will never prove more spot on: Bulls make money and bears make money. But pigs get slaughtered. Five Dumbest Final Thoughts -- Pork prices eventually recovered without government help. That's surprising since Congress is so good at giving out pork.
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