Pork prices have come down like a “falling meteor,” says Philip Gotthelf, president and commodities analyst at Equidex.
“A pandemic that has the name Swine Flu has implications for the hog market," he added. "The price of hogs decline because people fear they might be able to catch [Swine Flu] from hogs."
Although humans can only get Swine Flu from infected hogs and not from eating pork products, Gotthelf says this is an immediate and sustainable problem for hog farmers. He also says this has implications for the feed market.
“Hog farmers go out of business, the amount of soybeans and corn allocated to hog feeding goes down, and it leads to a vicious cycle."
“The trade would be to short hogs and perhaps short cattle if they move in sympathy,” says Gotthelf. “We’ve seen a dip in soybeans; we might see a dip in corn moving forward, so you want to be on the right side of these markets in the immediate future.”
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