August 1, 2008

 

USDA rules against releasing CRP lands
 
 

The USDA has decided against releasing land from the Conservation Reserve Programme (CRP) to provide more acreage for crop production, much to the disappointment of the National Pork Producers Council (NPPC).

 

The NPPC warns that the USDA's decision would have adverse consequences for the US pork industry.

 

NPPC president Bryan Black said without the CRP acres, the pork producers would not be able to expand their industry to respond to global demand.

 

Pork producers lose an average of US$20 per hog since the start of 2008 due to low feed supplies but higher feed prices, partly driven by the ethanol industry's corn demand that has jumped by 1 billion bushels on-year.

 

Black said producers are cutting back their swine herd and production by as much as 10 percent over the next several months, and even then they will need more acres and more corn in 2009 to meet the demands of ethanol producers and other users to feed the smaller herd.

 

An additional 5-7 million corn acres are required in 2009, which would help pork producers to stay afloat as they enters 2010, Black said, but added that it only works if there are strong corn yields in 2009 and bad weather next year without the additional CRP acres will lead to producers exiting the business and a further consolidation in the pork industry.

 

Created in 1985, the CRP is a land reserve programme that gives farmers an annual rental payment to take acres out of crop production and use them for conservation purposes for 10 years. There are approximately 34 million crop acres in the programme today.

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