Pestilence stalking the world's commercial swine herd, plus a breakthrough in trade talks with China, could spell strong profits for Tyson Foods (NYSE: TSN), major producer of pork, beef, and chicken. With the vast Asian market feeling the ongoing pig die-off's impact, Tyson, famous Spam maker Hormel Foods (NYSE: HRL), Archer Daniels Midland (NYSE: ADM) and others might win big in the coming months. But lingering risks could still prevent some companies from living too high off the hog.
The potential for big profits (and rising stock prices) for Tyson and other American processed meat producers comes from a porcine disease outbreak of unprecedented scale. African swine fever virus or ASFV is a viral hemorrhagic fever, which originates in populations of warthogs and other wild pigs in Africa. With symptoms similar to the dreaded Ebola virus, ASFV fortunately only infects pigs – humans are immune. Like Ebola, though, it's extremely contagious and spreads like wildfire among domestic pigs, through contact with even trace amounts of contaminants.
ASFV, or "pig Ebola" as some have dubbed it, is cutting a swath through the world's domestic pig population. The virus apparently kills nearly 100% of infected domestic swine, though warthogs, its natural host, seemingly don't even show symptoms. The porcine plague wiped out a startling 25% of the world's entire domestic pig population by early October. The appearance of ASFV in one pig prompts the entire herd's slaughter in an effort to contain its advance. ASFV has spread to more than 50 countries worldwide despite these measures. On Dec. 19, it was confirmed to have spread to yet another country, Indonesia, killing 27,000 pigs in North Sumatra province.