Rabobank confident about pork in long term

19-05-2009 | |

Although there is no scientific link between consumption of pork and Influenza A (H1N1), the misnaming of this as “swine” flu has wrongly undermined consumer confidence in pork.

When an outbreak is communicated, consumers in that country tend to abandon the meat product during the hottest period of media attention. Pig farmers are feeling the heat right now. Falling demands, falling prices and export bans are unfairly impacting the whole pork industry, says Nan-Dirk Mulder, Rabobank animal protein analyst for food and agribusiness.

Confidence in the pork industry
In the long term, Rabobank is confident about the pork industry and expects a 50% growth over the next 20 years. The current outbreak is not scientifically related to pork and is having an unreasonable impact on the pork industry in the short term. “Even if the virus had a relationship to pigs, pork is still considered a safe product for consumption. The pork industry can be effected anywhere from a few weeks to two years depending on the intensiveness of the crisis,” says Mulder.

Effects on business
For many years Rabobank has advised companies to look at the value and risk management of being a multi-species player. “Having a multi-product line with beef, chicken and pork, is a way to mitigate risks. As demand decreases for one protein, it will usually increase in the other product lines,” says Mulder.

For example, during the avian flu, pork and beef demand increased. During BSE or mad cow disease, chicken and pork demand increased, says the Rabobank analyst.

Effects on countries
For the most part, the decrease in supply and demand will be greatest in countries with known flu cases. “At the moment, the countries who will probably benefit are Denmark and Brazil who are both large producers and have yet to be banned,” says Mulder.

Banning exports
Russia and China are large importers and have placed bans on some states in the US and Canada, two of the world’s largest exporters of pork. “Any trade restriction on animal products trade, including the pork, from countries with human cases of Influenza A (H1N1) seems unfair. This is not in line with recommendations of the OIE,” says Mulder.

“Presently there is no scientific evidence showing that the virus causing the current flu outbreak originated from swine or any other animals. Trade limitations and pork demand continues to suffer in both affected regions and unaffected regions. This has an unfortunate impact on the pork industry,” says Mulder.

Pork is safe
Even if the virus is in the name of the pig, pork consumption is considered safe by organisations such as World Organisation for Animal Health (OIE) and the Food and Agriculture Organisation of the United Nations (FAO).© However, in times of crisis, consumers and governments are not always rational in their decisions and tend to make decisions based on emotional grounds.

“Taking into account that no outbreaks until now seem to have originated from farms, we should follow the international organisations in using the name Influenza A (H1N1). By continuing to use the name ‘swine flu’, puts unfair pressure on the pork industry,” concludes Mulder.