RAPELJE - The sign at the end of Hog Farm Road warns outsiders to come no further, which is pig man Don Herzog's way of shielding his swine from human pathogens.

"You're a greater danger to the pigs than they are to you," said Herzog, who's had enough of consumer hysteria over the H1N1 flu pandemic and its misguided association with pigs.

Health officials who two months ago mislabeled the potentially deadly illness "swine flu" killed summer barbecue sales for the pork industry. Fifteen nations have partially or completely banned purchases of U.S. pork, according to the Congressional Research Service.

Pork industry losses for next few months are expected to hit $400 million, say University of Missouri analysts. One-fourth to a third of the country's pork producers will have to consider thinning herds or shutting down, according to farm economists at Purdue University.

That's disturbing news for Montana pork producers, who send roughly 265,000 animals to market annually. Four years ago their industry's steady growth was stirring interest in an in-state high-tech hog processing plant capable of handling more than 1,000 carcasses daily. It would have been the state's first major processor of any type of livestock in decades.

Current market prices are so depressed that some farmers would need another $20 to $40 per animal in order to become profitable again. At the grocery store, prices for better cuts of pork trail the going rate for cheapest cuts of beef. At Costco Wholesale in Billings last weekend, top loin pork chops were selling for 30 cents a pound less than extra-lean ground beef. Pork ribs were selling for less than $2 a pound.

The real killer, though, said Herzog, is foreign sales. Foreign markets buy roughly a fourth of the pork produced in the United States. The H1N1 virus has become a bartering chip with key trading partners such as China and Russia, which banned American pork from their markets after the flu outbreak.

Russia bought $475 million in American pork last year. China bought $700 million. A pork industry already struggling before H1N1 is now on its knees with exports deteriorating.

Russia insists on inspecting U.S. slaughterhouses, which makes trade difficult. China refuses to buy pigs treated with ractopamine, a drug that keeps pigs lean. Arguments over those two issues have been ongoing for years, and the H1N1 issue further complicates things.

China has been a good purchaser of Montana Pork marketed by the Independent Meat Company of Twin Falls, Idaho. The pork is free of ractopamine and feed antibiotics. Sold under the label Salmon Creek Farms, the pork is also hormone-free.

Western pork has another advantage, said Dane Bourquin, marketer for Salmon Creek Farms: It looks better. Montana pigs are raised more on wheat and barley than corn. The feed makes the animal fat whiter and flesh darker. Grain-fed pork is a trademark for Salmon Creek farms.

"What we end up with is a firm fat, as well as a higher melting point," Bourquin said. "It does help in our Pacific Rim business to have noticeable higher-quality color.

"When you look at protein, a lot of people try to look at lean meat. Our meat is marbled, but it's healthy. We have a term we use for marbling that runs throughout, that's "taste fat." The fat on the outside is waste fat."

In May, attempting to unfreeze global pork exports, the World Health Organization, the United Nations and the World Trade Organization reported that the H1N1 outbreak had nothing to do with swine.

The flu was first associated with swine because laboratory testing showed many of its genes were similar to viruses in pigs. It had two genes from flu viruses known to circulate in European and Asian pigs. But health organizations found no proof that H1N1 was being transferred from pigs to humans.

The announcement didn't help. Among Americans polled a month after the virus appeared, 34 percent mistakenly said they could get H1N1 from being exposed to pigs, and 13 percent thought they could get H1N1 from eating pork. The poll was done by the Harvard School of Public Health phone survey.

China Daily, the government newspaper of China, reports its public is worried about contracting disease from pigs, also.

But the H1N1 affect seems to have worn off, said Dave Warner, spokesman for the National Pork Producers Council. Economic doldrums that have hung with the pork industry like a nagging backache for nearly two years persist.

Simply put, the pork industry hasn't been doing well since late 2007, Warner said. The price of pig feed, particularly corn, began rising in late 2007 as government subsidized corn ethanol production fired up. At the same time, the country's pig population was booming, flooding the market and forcing lower prices.

"What we're talking about now, at the end of this month, is 21 months of losses," Warner said.

"We kind of go back to September 2007. At the time, I believe somewhere around August or September 2007, we had 40 consecutive months of profits. Guys were making money, and no one wanted to get out. Everyone was waiting for the other guy to get out. The inventory kept going up - 110 million in 2007, then 111 million, then 114 million head this year."

The industry could use a herd reduction of 3 to 6 percent, Warner said, which would increase the demand and price, for the remaining animals. That liquidation probably will happen as cash-strapped pig farmers sell of their livestock or completely shutdown.

Herzog would like to keep raising pigs. It's a business he started with his father in the 1960s while attempting to firm up their feed barley business. The Herzogs figured barely farming would be sustainable if they feed the grain to pigs and "walked it off the farm."

Pig farming was a different business back then, Herzog said, with fewer government regulations and biological precautions. He didn't worry much about what might be traveling down Hog Farm Road.

Contact Tom Lutey attlutey@billingsgazette.com or 657-1288.