"We are asking for immediate assistance to address the economic crisis facing our industry," Don Butler, National Pork Producers Council president stated at a news conference today. NPPC has sent a letter to USDA Secretary Tom Vilsack citing specific requests.
"We are seeing pork producers go out of business, which will reduce long-term supply and ultimately increase food costs for consumers," Butler noted. In the past 21 months, pork producers on average have lost 50 percent of the equity in their businesses. During that time, losses have averaged $21.57 per hog; the projected losses into the fall could reach $54 per head.
"We have lenders who are working with producers to get them out of business before losing all of their equity," said Steve Meyer, president of Paragon Economics.
The National Pork Producers Council, on behalf of its pork producer membership, is asking USDA for:
$50 million supplemental pork purchase, using fiscal 2009 funds. USDA had approved a $50 million purchase request back in May, but "to date, that request has not been carried through," noted Neil Dierks, NPPC's chief executive officer, "so this is an extension of that request."
$50 million pork purchase from the $300 million in USDA's Section 32 food program. It currently has a spending cap on it and is locking up those funds.
$50 million additional supplemental pork purchase, using fiscal 2010 funds. These funds could be available as of Oct. 1, just as the seasonal increase in pork supplies pick up steam. "The government could purchase product a very competitive prices for its government feeding programs, allowing taxpayer dollars to go further," added Dierks. Today, Americans are finding themselves in need.
$100 million from the $1 billion, which is already appropriated for Type A H1N1 influenza, for assistance to the U.S. pork industry. Specifically, NPPC is requesting $70 million for H1N1 surveillance within the U.S. swine herd, $10 million for diagnostics and vaccine development, $20 million for "industry support." As Dierks pointed out, industry support could mean market support efforts such as additional pork purchases for government feeding programs.
Work with the U.S. Trade Representative to lift remaining import restriction on U.S. pork. Most specifically, China is keeping its market closed to U.S. pork exports; a ban that was initiated following H1N1 developments in April.
Conduct an impact study on the U.S. livestock industry before raising any ethanol blend rates. "It has been frustrating to us that the federal bio-energy policy was implemented before any impact statements were conducted," noted Butler. Of specific concern is the Environmental Protection Agency's proposal to move ethanol blend rates from 10 percent to 15 percent.
NPPC’s requests come on the heels of a similar one sent to USDA from nine governors. USDA rejected that request, indicating it didn’t have the funds for additional pork purchases. Dierks pointed to the Section 32 funds, to which USDA is bound. “We’ll be working with Congress to get the Section 32 cap lifted,” added Dierks. The governors also didn’t pursue funding tied to the H1N1 allocation; or an ethanol impact study.
Again, input costs and market challenges presented by attaching the "swine flu" moniker to the Type A H1N1 outbreak were cited as continuing to plague pork producers. Actual and projected losses for the U.S. pork industry from April 24 (the first H1N1 reports) thru the end of this year are estimated to reach $1.256 billion.
Asked whether NPPC had considered asking for more direct payment assistance for pork producers, Dierks referred to the industry’s free-trade and free market preferences. "It's been discussed, but our leadership is not willing to pursue that at this time," he added.