More federal aid is needed if hog farmers are to survive the coronavirus pandemic, which has depressed market prices and slowed pork production so greatly that millions of hogs will have to be destroyed, said pork industry leaders on Thursday. They urged the Senate to approve compensatory payments for hogs that are culled and an additional round of cash payments to all U.S. farmers and ranchers.
“The U.S. Senate must act quickly to help U.S. pork producers who remain in crisis,” said Howard Roth, president of the National Pork Producers Council. During a teleconference, NPPC officials said producers suffer doubly from the coronavirus: They lose $60 to $70 per head when they sell hogs to packers, and they face the cost of killing and disposing of hogs that have no buyer.
Two million hogs are stranded on farms because packing plants have run for weeks at reduced capacity, and the number is growing daily, said analyst Steve Meyer. Some producers are killing hogs, though there are no precise figures on how many.
The Pork Council stood alone among U.S. farm groups in calling publicly for the Republican-run Senate to approve the agricultural provisions of the $3 trillion coronavirus assistance bill passed by the Democratic-controlled House on May 15. Action on the bill has stalled. The House plan allots $16.5 billion for direct payments to farmers and directs the USDA to compensate producers for losses due to “depopulation” of livestock and poultry. Payments would begin at 85 percent of the USDA’s calculation of a producer’s losses and decline by 10 percentage points in each following month.
Hog farmers face a collective loss of $5 billion for the rest of this year, said Roth. Enrollment opened on Monday for a USDA program that would provide $16 billion in cash payments to farmers. An estimated $1.6 billion of it would go to hog farms. “It falls short of what is needed to sustain thousands of producers,” said Roth.
The pandemic has disrupted the usual pattern of hog farming, in which hogs are sent to market at regular intervals and replacement animals are moved into their barn space, said three farmers who joined Roth on the conference call. “It’s day to day. It’s hard to look even a week ahead,” said Chad Leman of Eureka, Illinois, because of fluctuations in slaughter plant capacity. Kevin Hugoson, who farms in Granada, Minnesota, said a loss of $60 or $70 per hog “is not sustainable” and could force some farms out of business.
“My wife and I were weaning pigs this morning,” said Mike Paustian, president of the Iowa Pork Producers Association. “I started thinking about … is there a future for these pigs?”
For coronavirus relief, the USDA set a payment limit of $250,000 for farmers and $750,000 for corporate entities. Groups representing livestock and specialty crop growers have said that the limits are too low given the thin profit margins and high production costs of modern agriculture. They have argued for higher, or no, restrictions on payments. The limits are double the caps on crop subsidies in the traditional farm program.
“When you start talking about euthanizing 300-pound pigs and the loss that it is for each pig, then maybe $250,000 … isn’t very reasonable in a situation that is way beyond the farmer’s control,” said Iowa Sen. Chuck Grassley, when asked if the coronavirus limits were too high. Still, Grassley, a longtime proponent of directing farm subsidies to family-size operations, said, “I’m not going to badmouth a decision by the secretary of agriculture.”