NPPC: Payments to hog farmers may not be enough
The U.S. Department of Agriculture (USDA) on April 17 announced a COVID-19 relief package that includes $3 billion in planned agricultural product purchases and $1.6 billion in direct payments to hog farmers, including payment limitations of $125,000 per commodity and $250,000 per individual. Industry economists conservatively estimate that hog farmers will lose $37 per hog marketed, or $5 billion collectively, for the remainder of the year.
"We fear the lifeline so desperately needed will fall short of what is truly needed. While the direct payments to hog farmers will offset some losses for some farmers, they are not sufficient to sustain the varied market participants, including those who own hogs as well as thousands of contract growers who care for pigs. All of these participants have made sizable investments in a U.S. pork production system that is the envy of the world. Many generational family farms will go bankrupt without immediate financial aid," said Howard "A.V." Roth, president of the National Pork Producers Council (NPPC) and a hog farmer from Wauzeka, Wisconsin.
"We are thankful for USDA commodity purchases, a step that will hopefully help move a backed up supply of pork to those who need it, creating much-needed plant capacity to harvest market-ready hogs that have lost value as they have backed-up on farms because of COVID-19.
"Our farm sector is made up of different market participants who are dependent on one another to maintain profitable operations," said Roth. "Unlike other industries that have received COVID relief aid without restrictions, many of our hog farmers have been left behind. Without quick action to extend support where it is needed most, we will see pork industry consolidation, a decline in healthy competition that drives innovation and the loss of a relished rural lifestyle for many farm families."