The United States hog industry is asking Washington for a commitment of $250 million, most of it to remove surplus pork from the market.
National Pork Producers Council president Don Butler told an Aug. 17 news conference that the industry has lost $4.5 billion in revenue in less than two years because of higher feed costs and since April, consumer resistance because the H1N1 flu is commonly known as “swine flu.”
He said per hog losses of $21.37 US since 2007 are expected to increase to $54 by fall.
“U.S. pork producers are in desperate straits right now and they need a little help from the USDA (U.S. Department of Agriculture),” he told reporters on a conference call.
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“We are facing the loss of tens of thousands of jobs. We are asking for some immediate support and assistance.”
The leader of the American hog industry said direct income subsidies to producers are not part of the lobby agenda.
With billions of dollars in losses, he questioned the feasibility of asking for enough money to alleviate the problem. In addition, direct subsidies would undermine the market orientation of the NPPC and cause trade problems for the industry, he said.
“At this juncture, the leadership of our industry is not prepared to make a request for a direct payment,” said Butler.
In an Aug. 17 letter to U.S. agriculture secretary Tom Vilsack, the NPPC asked Washington to:
- Immediately invest $50 million to buy pork products for various federal food programs, including school lunches.
- Change the rules for a farm bill program set up to fund fruit, vegetable and nut purchases for school feeding programs to allow $50 million of the $300 million budget to be used to purchase pork.
- On Oct. 1 when the new U.S. fiscal year starts, spend $50 million of the 2010 budget to take surplus pork off the market.
nUse $100 million from the government’s $1 billion fund to deal with H1N1 to improve swine disease surveillance, development of vaccines and fund other indirect supports.
The request to Washington also called for increased efforts to open the Chinese market to American pork, closed because of H1N1, and to study the impact on hog industry feed prices of a proposal to sharply increase corn-based ethanol use in the U.S.
Steve Meyer, president of Paragon Economics, told the news conference that despite the losses, the U.S. industry has contracted by little more than three percent, while a 12 percent contraction would have been more appropriate.
“Clearly, there still is surplus production and we have to reduce production more,” he said.
But when asked whether there is any consideration of an NPPC-administered fund to help producers leave the industry, Butler said American anti-trust laws would prevent that.
Under anti-trust laws, only co-operatives are allowed to do that and that is why a dairy buyout through a dairy co-operative is happening.
