August 10, 2009

Iowa Governor Chet Culver, and pork industry leaders and members requested additional support Friday (August 7) for the nation's hog producers from the Obama administration.

 

Neil Dierks, chief executive of the National Pork Producers Council, said during a teleconference held with the media concerning issues facing pork producers and the industry that producers have lost about US$21 per head marketed since September 2007.

 

According to livestock and meat industry analysts, US pork producers collectively have lost nearly US$4.5 billion in the past two years. They face continued mounting losses in the months to come based on current hog prices and feed costs.

 

US swine producers have lost money for nearly two years from volatile grain prices that hit record highs last summer, the economic crisis and the emergence of type AH1N1 influenza in April. The new influenza was originally referred to as swine flu by US and world health organizations, which contributed to concerns among consumers worldwide about the safety of pork. No connection between pork consumption and the AH1N1 influenza has been established, yet consumption has reportedly slowed in some countries.

 

Culver, representing the nation's largest hog producing state, led a letter campaign among governors of eight other states requesting help for US producers from President Obama. Additional states may also send separate letters to the president and Congress.

 

Industry analysts said producers collectively need to reduce their breeding herds by 5 percent to as much as 10 percent in order to pull hog prices up to profitable levels. Even if they were to do that, it would take nearly a year before cutbacks in the breeding herd would be reflected in barrow and gilt slaughter rates.

 

Analysts and livestock dealers said the majority of US hog producers have high capital investment in their operations. Producers are not in a position to easily trim production without their operations becoming inefficient. Therefore, little downsizing has taken place so far.

 

Since pork producers are "facing an economic crisis that is catastrophic in nature," according to the NPPC, industry leaders support the farm-state governors' efforts as listed in a letter sent to Obama, urging his support for producers.

 

The first prong of a three-part support program includes an additional $50 million in pork purchases for government feeding programs. The second is a request for immediate action to remove the spending cap on the USDA's Farm and Food Support under Section 32 Program to allow additional purchases of surplus agriculture products to be used in food assistance programmes.

 

The third part of the request is for the administration to address the "unwarranted" import ban by China on US pork based upon the AH1N1 influenza. Russia also placed temporary bans on imports from some US states in reaction to outbreaks of AH1N1 influenza.

 

Dierks said most of the import bans on US pork imposed after the AH1N1 influenza outbreaks have since been reopened, but China has not yet done so.