Smithfield, Va., is famous for its Virginia smoked hams and the centerpiece of the community is Smithfield Farms, a global company with a large operation in Mexico.

THE HOG INDUSTRY IS reeling from the latest flu epidemic.

World health organizations are pointing to Smithfield’s, Vera Cruz, Mexico location as a possible epicenter for the current worldwide flu epidemic.

The swine flu outbreak appears to have originated in La Gloria, Perote Municipality, Veracruz State, Mexico, where a Smithfield subsidiary, Granjas Carroll raises 950,000 hogs per year.

The new flu strain — a sometimes lethal combination of swine, avian, and human viruses — by late April had infected thousands of people in Mexico and the U.S., killing over 150 people.

According to the global disease tracking blog Biorsurveillance, residents near the Smithfield subsidiary in Mexico believed the outbreak had been caused by contamination from hog breeding farms located in the area. They believed the farms, operated by Granjas Carroll, polluted the atmosphere and local water bodies, which in turn led to the disease outbreak.

Granjos Carroll has denied responsibility for the outbreak and attributed the cases to “flu.” However, a municipal health official stated that preliminary investigations indicated the disease vector was a type of fly that reproduces in pig waste and that the outbreak was linked to the hog farms. It was unclear whether health officials had identified a suspected pathogen responsible for this outbreak.

Smithfield Foods, Inc., has eight farms in the area. Smithfield spokeswoman Keira Ullrich said the company has found no clinical signs or symptoms of the presence of swine influenza in its swine herd, or its employees working at its joint ventures anywhere in Mexico.

Mexican Agriculture Department officials said April 27 its inspectors found no sign of swine flu among pigs around the farm in Veracruz, and that no infected pigs had been found yet anywhere in Mexico.

Juan Lubroth, an animal health expert at the U.N. Food and Agriculture Organization in Rome, supported officials' assessment of the pig situation and said there is no evidence of sick or dying swine in Mexico.

While world health organizations rush to find the source of the most recent flu outbreak, the livestock industry is already paying a heavy toll for the possible involvement. Russia has banned imports of beef and poultry meat (as well as pork) from a growing number of U.S. states. There is no evidence that this flu virus (H1N1) can infect people through the consumption of any meat products, the ban appears to be a purely political move.

“It could take weeks or longer before U.S. pork producers recover from export restrictions tied to this most recent worldwide influenza outbreak,” said Chris Hurt, a Purdue University agricultural economist.

"This couldn't get much worse for the pork industry," Hurt said. "You've got other countries starting to follow the lead of Russia and China by limiting their import of our pork. Then there are the consumers worldwide who are linking the word 'swine' to pork, even though this influenza strain did not come from swine. And then there's the world economy in general."

Smithfield Farms says it is cooperating with the Mexican authorities' attempts to locate the possible source of the outbreak and will submit samples from its herds at its Granjas Carroll subsidiary to the University of Mexico for tests.

A Smithfield spokesperson says, "based on available recent information, Smithfield has no reason to believe the virus is in any way connected to its operations in Mexico. “Smithfield routinely administers influenza virus vaccination to their swine herds and conducts monthly tests for the presence of swine influenza."

The swine flu outbreak has led to a drop in Smithfield's stock prices with analysts increasing their loss estimates for that company as well as Arkansas-based Tyson Foods due to consumer concerns about pork.

With sales of $12 billion, Smithfield Foods, is the leading processor and marketer of fresh pork and packaged meats in the United States, as well as the largest producer of hogs.

The current outbreak of influenza is typed H1N1, which is significantly different genetically from the more deadly strains of avian influenza that have popped up sporadically in Asia since 2005.

University of Georgia Professor and Director of the UGA Center for Food Safety, Michael Doyle says there are two types of avian flu H5NI viruses: A highly pathogenic virus and a low-pathogenic virus. The low-pathogenic virus has been around for more than a decade. The high-pathogenic virus is the one linked to the deaths in Asia."

Doyle says the cases in Asia have been tied to people who live near or handle live poultry. In the U.S there is a much lower risk of avian flu outbreaks in large confinement poultry operations because infected birds found in this country would be quickly detected, quarantined and destroyed.

Smithfield Farms contends similar safety precautions, or ‘firewalls’ are common in the swine industry.

Despite extensive safety measures, Smithfield has been cited in the past for health violations. In the 1970s, the company paid over $12 million in fines, which they say led to biohazard control systems that make their swine houses a very low risk for development of any swine-based disease problems.

The overall effect of the swine flu has been to cause commodity markets to tumble, with livestock and grain prices the most severely impacted. In the long-run corn and soybean producers may benefit from the drop in hog production, if producers significantly boost cattle numbers to compensate for the drop in pork sales.

Regardless of the technical cause for the latest flu epidemic, the affect on agriculture is likely to be significant and likely will add to the risk of farmers in the Southeast who have corn in the ground and will soon make decisions on planting soybeans.

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