As flu season approaches, investors are betting consumers will back away from pork purchases, according to a Reuters report. U.S. hog prices declined to their lowest levels in nearly two years on Wednesday.
Even though the Type A H1N1 flu is not spread by hogs or pork, investors worry that consumers may avoid pork purchases if flu cases increase this fall as health officials fear.
"In the hog industry, there is a fair amount of concern that it (flu) will be back in the news a lot,” says Ron Plain, University of Missouri agricultural economist.
Dennis Smith, livestock broker at Archer Financial, expects a glut of pork and weaker demand going forward. In addition, slow reduction in the swine herd prompted selling at the Chicago Mercantile Exchange hog markets.
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Source: Reuters