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USDA buys $50 million of pork to aid farmers

By MEGGIE I. FOSTER
Assistant Editor

WASHINGTON, D.C. — USDA Secretary Ed Schafer recently announced the department’s plan to purchase nearly $50 million worth of pork products in a move to lend a helping hand to struggling American pork producers.

“The action by USDA to buy additional pork will benefit America’s pork producers, the U.S. economy and the people who rely on the government’s various food programs,” said National Pork Producers Council (NPPC) President Bryan Black, a pork producer from Canal Winchester, Ohio. “It will help our industry reduce the herd and thereby bring supply and demand back into balance and allow producers to continue to provide consumers with economical, nutritious pork.”

The grand supply of pork will be donated to child nutrition and other domestic food assistance programs, the USDA reported in its announcement on May 1.

“We provide food assistance to one in every five Americans,” Schafer explained.

“We are working to increase benefits due to rising costs and to ensure we have full funding for our food assistance programs.”
The announcement was made following a series of meetings initiated by National Pork Producers Council officers and top staff with the USDA ag chief to urge him to take immediate action in addressing a serious crisis in the pork industry.

NPPC officials reported that over the past seven months, the financial crisis faced by producers has cost the hog industry more than $2.1 billion.

The primary culprit, they said, is the doubling of feed costs, causing producers to lose $30-$50 per hog marketed over the last 30 days.
During their meeting with Schafer, the NPPC requested that the USDA purchase 50.5 million pounds of pork – in 2007, the agency bought 43 million pounds – for various federal food programs.
According to NPPC, this in total would help reduce the U.S. sow herd by nearly 163,600 animals.

The NPPC also asked Schafer to implement emergency programs and loan guarantees to help producers purchase feed, consider allowing early release without penalty of non-environmentally sensitive Conservation Reserve Program acres back into traditional crop production and support pork exports through USDA’s Market Access Program and Foreign Market Development Program. While not all requests were granted, the NPPC, as well as the American Farm Bureau Federation (AFBF) both have strongly commended the Bush administration for its decision to lend assistance to U.S. pork producers to help them weather the current economic storm in the hog business.

Economists have estimated that the industry will need to reduce production by at least 10 percent – meaning a reduction of 600,000 sows – to restore profitability.

Such a cutback, however, could result in less-efficient packing plants closing, less manure for crop fertilizer and correspondingly a need for more man-made, foreign-produced fertilizer, as well as a hike in retail pork prices because of a smaller supply and lost jobs.
“Prices for live market hogs have plunged to levels not seen in nearly a decade” said AFBF President Bob Stallman.

“Experts have predicted that 2008 will likely be the worst financial year for pork producers in modern history. USDA’s help could not have come at a more critical time.

Pork contributes
to national food programs

USDA’s Agricultural Marketing Service (AMS) purchases a variety of high-quality food products each year for distribution by USDA’s Food and Nutrition Service (FNS) for the national school lunch program, the school breakfast program, the summer food service program, the food distribution program on Native American reservations, the nutrition program for the elderly, the commodity supplemental food program and the emergency food assistance program.

USDA also makes emergency purchases of commodities for distribution of victims of natural disasters.

Based upon USDA’s intent to buy an extra supply of pork products, FNS will survey potential recipients to determine how much product will be accepted for shipping. AMS will seek the lowest overall cost by publicly inviting bids to supply the desired quantity and by awarding contracts to responsible bidders.

“This procurement program offers two important benefits,” added Stallman. “It helps farmers facing record-low pork prices, while at the same time providing healthy, nutritious protein to their fellow citizens who are in need. It’s a win-win for producers and the public.”

This farm news was published in the May 7, 2008 issue of the Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.

5/7/2008