Once again using what seems to be his favored mode of communication with the public—a “letter to employees”—Smithfield CEO C. Larry Pope said the Mexican government has determined that “no virus, including the human strain of AH1/N1 influenza, is present in the pig herd” at the operations Smithfield owns jointly with Granjas Carroll.

The Wall Street Journal reported that Smithfield “became the topic of rampant Internet speculation connecting the pork giant to the disease, even as the company adamantly denied any responsibility.” The company also became the topic of Internet speculation-debunking, though it was less rampant.

The National Pork Producers Council, in a statement begging the federal government for a bailout earlier this month, claimed that its members lost about $7.2 million per day between April 24 and May 3, when flu fear was at its peak.

Smithfield, though, says its pork sales are recovering from their plummet after several flu-fearing countries banned imports despite the fact that pigs didn’t spread the flu to humans. Domestic sales have stabilized too. The company also said it should meet its debt covenants for the fourth quarter of 2009 and all of 2010. Smithfield paid down about $900 million in debt over the past year, Pope said during a conference on Wednesday, where he addressed concerns that the company might not be able to meet its debt obligations.

The flu scare hit at a bad time: meat sales were already way down, and the company is still dealing with high feed costs. In response, it has closed some plants, reduced its hog inventory and renegotiated much of its debt.

Smithfield will report its fiscal 2009 results next month. Analysts expect a loss of about $155 million.

“I think it is possible we will lose money for fiscal 2010 raising hogs,” Pope said at the conference, as quoted by Reuters. “But I believe the meat business is going to be terrific and our international business has improved very nicely.”

Mexico is the epicenter of the flu outbreak that has spread to dozens of countries worldwide, mostly through travelers who have visited Mexico.

Tourism is one of Mexico’s main dollar generators, along with oil exports and remittances sent from Mexicans living abroad. The government estimates the country could lose $4 billion from tourists staying away due to the epidemic.

“The tourist destinations are safe in Mexico,” Health Minister Jose Angel Cordova said. “People can come back with peace of mind because we are monitoring this very intensely.”

The number of fatal victims in Mexico from the outbreak has risen to 58 from 56 as results of tests on people who died in recent weeks came in, Cordova said.

A total of 2,282 people in Mexico caught the new flu, a genetic mixture of swine, bird and human viruses, compared to 2,600 cases in the United States.