April 1, 2009
US government to buy US$25 million of pork to help struggling industry
US Department of Agriculture Secretary Tom Vilsack said Tuesday (March 31) the government would buy US$25 million worth of pork to help "struggling" producers.
Vilsack, in testimony before the House Appropriations Subcommittee on Agriculture, said the pork purchase was one of several "bonus commodity purchases." He said the USDA would also buy US$60 million of turkey, US$2 million of lamb and US$30 million of walnuts.
The USDA said in a press release the purchases would be used in federal food nutrition assistance programs.
Vilsack said in the release the purchases would help mitigate further downward prices and stabilize market conditions for these sectors, which are struggling in the current market environment.
He also said the amounts are an expansion of USDA's normal purchases.
According to agricultural economists, livestock prices this year have been too low to cover farmers' expenses.
High prices for corn, fertilizer and energy have pushed up the cost of production, while an oversupply of products kept wholesale prices down.
Vilsack said the USDA purchases will help to stimulate the economy, and provide high quality, nutritious food to recipients of the nutrition programs.
Michigan Turkey Producers chief executive officer Dan Lennon said local farmers will benefit even though they are unlikely to sell products directly into the federal program.
Lennon said the US$60 million in federal turkey purchases will help to stabilize prices in an industry where supply currently exceeds demand.
Most Michigan-raised pork is marketed through processors in other states, but farmers here see the federal programs as one step toward closing a cost gap that has them losing as much as US$20 for each hog brought to market.
