The swine flu outbreak has been tracked back to cases beginning in February in La Gloria, Veracruz, Mexico.

April 2 Local media source Imagen del Golfo reported that state health officials recorded a 15% increase in disease over an unspecified period in the highland areas of Veracruz, which includes La Gloria. The increase was primarily due to higher levels of upper respiratory disease and gastroenteritis. Specifically, officials noted an increase in pneumonia and bronchial pneumonia cases. Health officials attributed the increase to seasonal climate changes. April 6 Veratect reported local health officials declared a health alert due to a respiratory disease outbreak in La Gloria, Perote Municipality, Veracruz State, Mexico. Sources characterized the event as a "strange" outbreak of acute respiratory infection, which led to bronchial pneumonia in some pediatric cases. According to a local resident, symptoms included fever, severe cough, and large amounts of phlegm. Health officials recorded 400 cases that sought medical treatment in the last week in La Gloria, which has a population of 3,000; officials indicated that 60% of the town’s population (approximately 1,800 cases) has been affected. No precise timeframe was provided, but sources reported that a local official had been seeking health assistance for the town since February.

Update 3a

The Mexican government has now confirmed a that a case of flu in this town was the new strain of swine flu.

A Mexican village whose inhabitants were overwhelmed by an outbreak of respiratory illness starting in February has emerged as a possible source of the swine flu outbreak which has now spread across the world. The state government of Veracruz in eastern Mexico has confirmed one case of swine flu in the village of La Gloria with the sufferer named locally as a four-year-old boy, Edgar Hernandez Hernandez. The federal government said tonight that he tested positive for the same strain of the virus which has claimed lives in Mexico.

La Gloria is the town where Smithfield runs a massive factory pig farm. The virus vector has been identified by Mexicans to be flies that live on pig feces in overflowing fecal waste ponds.

According to the swine flu timeline put together by a company called Veratect, who evidently map infection disease events for clients like the WHO & CDC: Residents [of La Gloria, Perote Municipality, Veracruz State, Mexico] believed the outbreak had been caused by contamination from pig breeding farms located in the area. They believed that the farms, operated by Granjas Carroll, polluted the atmosphere and local water bodies, which in turn led to the disease outbreak. According to residents, the company denied responsibility for the outbreak and attributed the cases to ‘flu.’ However, a municipal health official stated that preliminary investigations indicated that the disease vector was a type of fly that reproduces in pig waste and that the outbreak was linked to the pig farms. It was unclear whether health officials had identified a suspected pathogen responsible for this outbreak. Granjas Carroll is a subsidiary of Smithfield Foods. According to the Smithfield Foods website, Granjas Carroll produced 950,000 hogs in fiscal 2008.

Grist has picked up the story in the U.S.

My rough translation: According to one community resident, the organic and fecal waste produced by Granjas Carrol isn’t adequately treated, creating water and air pollution in the region. I witnessed—and smelled—the same thing in Hardin County, Iowa, a couple of years ago, another area marked by intensive industrial hog production. The article goes on to say that area residents have long complained of "fetid odors" in the air and water, and swarms of flies hovering around waste lagoons. Like their counterparts who live in CAFO-heavy U.S. areas, they also complain of respiratory ailments. Now, with 30 percent of the area’s residents now infected with the virulent flu bug, people are demanding that state and federal authorities inspect hog operations there. So far, reports La Marcha, the response has been: nada.

I haven't seen any mention of factory farms as the likely source of the swine flu outbreak in the U.S. "main stream media".

North Carolina is the second largest producer of pork in the U.S. Pig waste has been a major problem here and under pressure by environmentalists Smithfield has improved sanitation here. However, impoverished rural Mexicans have no power to stop unsanitary practices by Smithfield. Apparently poor sanitation by Smithfield bears a major role in the development of this new strain of swine influenza in Mexico.

Update

Several expert commenters have pointed out the flies may have nothing to do with the flu virus evolving or spreading. The "fly hypothesis" may be wrong. However, another commenter correctly pointed out that flies or other intermediates are not needed. Contaminated water is a known locus of viral genetic mixing for avian flu.

"The ducks, the ducks, the ducks are the key to the whole damned thing," Webster once exclaimed to a Newsday reporter.1271 Due to the growing industrialization and pollution of migratory aquatic flyways, wild ducks are landing in increasing numbers on these farmed fish ponds.1272 The influenza virus found naturally and harmlessly in ducks’ intestines are excreted in the water. The chickens may drink the virus-laden water. The pigs then eat the virus-laden chicken feces. The ducks then drink the pond water contaminated by the virus-laden pig excrement and the cycle can continue. The pond water ends up a "complete soup" of viruses, admits the head of the Hong Kong environmental think tank Civic Exchange.1273 Dead ducks or chickens may also be fed to pigs, providing another potential route of infection. This risky practice is not limited to Asia. In the H5N2 outbreak in the United States in the 1980s, pigs raised under chicken houses in Pennsylvania and fed dead birds came down with the infection as well.1274 Integrating pigs and aquaculture affords this waterborne duck virus a rather unique opportunity to cycle through a mammalian species, accumulating mutations that may better enable it to adapt to mammalian physiology. Migratory ducks could then theoretically fly the mutant virus thousands of miles to distribute it to other ponds, pigs, and ducks across the continent. Although there is concern that the virus could infiltrate the abdominal fluid or even the muscle meat of the farmed fish,1275 the aquatic animals are largely thought to be innocent bystanders.1276 Without the Trojan duck vectors, fish farming wouldn’t pose a pandemic threat. Likewise, without the pigs, the fish farms would be no riskier than the thousands of Canadian lakes where ducks congregate and discharge virus into the water every summer. Any spoonful of lake water from this "veritable witches’ brew of avian influenza" (as Webster puts it) may contain virus, but as long as it stays between ducks, as it has for millions of years up until domestication, it poses no pandemic threat.1277

Update 2

Smithfield tells press it found no flu in its Mexican hogs.

Smithfield Foods Inc. said it has not found any signs of swine flu in the company’s hogs or employees at its joint ventures in Mexico. Smithfield said its businesses in Mexico regularly administer flu vaccinations to its hogs and conduct monthly tests for the presence of swine flu. The company, based in Smithfield, Va., said in a news release that it is cooperating with Mexican officials in their investigation of the outbreak and will submit samples from its herds to the University of Mexico for testing.

Note: Flu vaccine has a significant failure rate in humans. Flu vaccination does not prevent all humans or pigs from coming down with the flu. Sick, unhealthy pigs living in fetid conditions - see Ellinoriannes diary - with compromised immune systems would be subject to vaccine failure.

Update 3.

Now the Guardian is reporting that the Mexican government has sprayed for flies and has named the flies as a likely disease vector. Scientific support for the fly theory may be sketchy but this is the news.