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The Little Blue Pill or the Other White Meat?

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Argentina's leaders are pushing pork instead of Viagra.

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Pfizer's (PFE) Viagra may be facing a challenge from a new competitor: Pork.

Argentina's president, Cristina Fernandez, recommended pork as an alternative to Viagra in a meeting this week with leaders of the country's pig farming industry.

"I've been told…that eating pork improves your sex life. I'd say it's a lot nicer to eat a bit of grilled pork than take Viagra," she said.

She noted that after she and her husband, former president Nestor Kirchner, ate a meal of pork, "things went very well [over the] weekend."



In recent years, the Argentinean government has been promoting pork consumption in response to rising beef prices.

This morning, Meat Trade News Daily wrote that "Prices have surged since November on worries over supply and the traditional increase in demand for holiday barbecues. The average price for a live steer at the benchmark Liniers cattle market has risen almost 25% since November, trading at 4.73 pesos ($1.24) a kilo Wednesday."

The report also pointed out that the US Department of Agriculture expects Argentina's beef production to fall 13%, to 2.8 million tons in 2010.

Arturo Llavallol, a board member at the Argentine Beef Promotion Institute, said, "Cattle breeders are cutting production because the government has restricted exports and attempted to regulate prices since late 2005. The South American country's cattle herd has declined in the past year as the worst drought in a century harmed pastures."

Llavallol continued, "Next year, there will be 4 million fewer head of cattle than this year, which means 30% less cattle going to the slaughterhouse."

Obviously, less available beef equals higher prices. Hence, Fernandez's push for pork.

"Trying it doesn't cost anything, so let's give it a go," she suggested.

Bolstering Fernandez's argument, Juan Luis Uccelli, head of Argentina's association of pork producers, claimed that residents of Denmark and Japan have much more "harmonious" sex lives than Argentines because they consume more pork.

"In Osaka, Japan, there is a village in which the people who reached 105 years old and ate a lot of pork had a lot of sexual activity," he told Radio Mitre.

President Fernandez's statements didn't have an effect on frozen pork belly futures after her statement on Wednesday:


Click to enlarge

But, does it have Pfizer nervous? Viagra's market share is already being chipped away by drugs like Eli Lilly's (LLY) Cialis and Levitra, which is co-marketed by Bayer Pharmaceuticals, GlaxoSmithKline (GSK), and Schering-Plough (MRK).

Pfizer's latest numbers bear this out:

For the first nine months of 2009, revenues from Viagra stood at $466 million, compared with $509 million for the same period in 2008, a decrease of 8%.

Vitaliy Katsenelson, CFA, vice president and portfolio manager with Denver's Investment Management Associates Inc. says, "I understand why investors don't want to own Pfizer; there is little excitement in the stock. It is down significantly from the Viagra-high it reached in 1998."

However, he says that Pfizer's valuation is very attractive.

"Everybody hates it, and that's priced into the stock," Katsenelson says. "Look, even if Pfizer doesn't come up with a single new drug, its price will not change much; it will be where it is today. Any new drugs are just an added bonus and Pfizer does have over 100 drugs in the pipeline."

As far as Pfizer needing to worry about swine consumption further eroding Viagra profits, at least one expert believes there's nothing for the company to worry about.

"'There is no study showing that pork meat significantly improves sexual activity,'' Amado Bechara, a specialist in sexual dysfunction, told the newspaper La Nacion.

Maybe not, but to this refined palate, pork tastes far better grilled than Viagra, Cialis, or Levitra.
No positions in stocks mentioned.
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