The Journal reports that pork futures have plummeted:

Some lean-hog-futures prices at the Chicago Mercantile Exchange fell by the daily exchange-imposed price limit, pressured by concerns that the increasing number of swine-flu cases among humans would result in less pork consumption.

The price of the nearby May CME lean-hog contract fell by the three-cent limit to 66 cents a pound, while the most-active June contract slid three cents to 68.65 cents a pound. Later-dated contracts didn't fall as steeply.

But, as the piece points out, this is all driven by irrational fear, since swine flu isn't transmitted by eating pork.* Or, rather, it's being driven by investors' rational fears that irrational people will stop buying bacon:

Some foreign countries, such as China, Thailand, Ukraine and Russia, have banned imports of pork from Mexico and certain U.S. states, though the Centers for Disease Control and Prevention, of Atlanta, and the World Health Organization continue to say the flu virus isn't transmitted by properly cooked meat, but rather by human-to-human contact.

It's an interesting analytical problem, I think--how to rationally model irrationality. Sounds like there's real money to be made by those who solve it...  

*Then again, maybe it's not irrational to wonder if the CDC and the WHO really know what they're talking about.

Update: Speaking of irrationality, Israel's deputy health minister has hit on a novel solution to part of the swine flu problem:

Ultra-Orthodox Deputy Health Minister Yakov Litzman on Monday declared that Israel would call the new potentially deadly disease that has already struck two continents 'Mexico Flu,' rather than 'Swine Flu, as pigs are not kosher.

"We will call it Mexico flu. We won't call it swine flu," Litzman told a news conference on Monday, assuring the Israeli public that authorities were prepared to handle any cases.

Spoken like a man who's eaten at the House cafeteria.

Second Update: Two commenters have persuaded me that my footnote was irrational fear-mongering in itself. I retract it--the CDC and the WHO know what they're talking about when they say swine flu can't be transmitted by eating pork.

Third update: Another commenter says this is a pretty standard investment problem, a la Keynes' dictum that "investing is like the British newspaper contests of his day in which you won not by saying which women in a group of photos were the most beautiful, but by being closest to the contestants' average response about which were the most beautiful." I don't think that's exactly right. The typical investment problem entails trying to predict (and exploit) the irrationality of other investors--for example, you can imagine investors being overly pessimistic about healthy banks, which could create a buying opportunity. But in this case it's not the investors who are being irrational. It's the consumers. (At least primarily the consumers.) That seems like a slightly less tractable problem because I'd guess that, as a class, they're even more prone to mass hysteria than investors, at least some of whom act as a check on the irrationality of others.

--Noam Scheiber