Swine flu could infect U.S. trade and travel

CHICAGO (Reuters) - Mexico’s deadly swine flu could disrupt trade and travel between the United States and Mexico if it prompts restrictions on the movement of goods across the border or sparks fear in consumers, analysts say.

In a first sign of the potential for turmoil in U.S. agricultural markets from the disease, prices for hogs fell to a two-month low on nervous selling as Mexico is a top market for American pork and beef.

The potential impact on trade is far from clear as experts race to learn more about the new strain of flu, which has killed as many as 61 people in Mexico. But shipping and travel industries are especially vigilant.

“If you end up with a significant demand shift, you could end up with a very substantial effect on our products, whether it be government-imposed restrictions or alternatively if the consumers just decide to say ‘no’,” said Bob Young, chief economist with the American Farm Bureau Federation.

Since Mexico and Canada are the two largest buyers of U.S. farm goods, such restrictions could be a drag on the U.S. agriculture sector, Young said.

The World Health Organization said it is concerned about 800 “influenza-like” cases in Mexico. In the United States, eight people were infected but have recovered.

Any decision to restrict food shipments due to flu would come from the U.S. Agriculture Department, which has the power to “shut down movement,” said Russell Laird, an executive director representing agricultural and food carriers at the American Trucking Associations.

“So far, we haven’t heard anything. But if that call is made, we’ll make sure to do our part.”

Katherine Andrus, general counsel for the Air Transport Association, said the airline trade group is taking its cues from the WHO and the U.S. Centers for Disease Control and Prevention (CDC) but that so far there had been no decision to restrict travel between the United States and Mexico.


“Any time there is an outbreak of something ... we certainly pay attention. But we really look to CDC,” Andrus said. “We wouldn’t expect to see international air traffic actually halted for something like this.”

U.S. Commerce Department data shows about 5.9 million U.S. citizens flew to Mexico in 2008.

The last major health-related disruption of air travel came during the 2002-2003 outbreak of severe acute respiratory syndrome, or SARS, which killed hundreds of people around the world.

The SARS outbreak, which began in China, came on the heels of the September 11 attacks on the United States in 2001 and hit earnings for airlines with large operations in Asia.

“Avian flu in 1997 and SARS in 2002-2003 killed economic activity, so a swine flu problem in 2009 might result in more of the same,” said Stephen Schork, editor of the Schork Report, an energy-related newsletter in Philadelphia.

In 2008, Mexico was the top export market for U.S. beef, with sales valued at nearly $1.4 billion. It was the No. 2 market for U.S. pork, valued at $691.28 million.

“It is too early to tell what impact we could see,” said a spokesperson at Schneider National Inc, the largest privately held U.S. trucking company.

The pressure on oil prices that could result from decreased travel and economic activity was echoed by several other industry sources, who also noted that Mexico and Texas have large numbers of oil industry workers that could be affected.

Additional reporting by Bob Burgdorfer and Nick Carey in Chicago and Robert Gibbons; Editing by John O’Callaghan