"Following unprecedented losses for the protein industry in 2008, declining hog and poultry supplies and modest increases in prices were expected to help in 2009. However, the potential for a more pronounced supply/demand imbalance, driven by the current outbreak, could delay or eliminate any meaningful near-term improvement in profitability," the release said.

Among the companies that Fitch is watching warily are Smithfield Foods, Tyson, JBS, Cargill and Hormel, in about that order of exposure to the current crisis. Also being closely watched is Burger King, due to that QSR's extensive Mexican operations.

"Reduced operating and financial risk for Smithfield is predicated on improved profitability in its hog production business, which continues to generate operating losses. The company currently expects improvement in its hog production business during the fiscal year ending May 2, 2010, but reduced demand for pork products is likely to cause a setback," the analysts wrote.

Still, Fitch didn't change any of its Rating Outlooks from "stable" for any of the companies noted in the release. (Fitch doesn't have a rating on Smithfield Foods, however.)

Meanwhile, lean hogs futures contracts may be pointing to better days ahead: Steve Meyer and Len Steiner noted in their Daily Livestock Report newsletter that at the close of trading on Wednesday, all futures contracts were up, save for the May '09 contract. At mid-day Thursday, the May '09 contract was down further, but price changes for the rest of the contracts through April 2010 were mixed.

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