Although the state has the money to pay for disposal of 600,000 hogs stranded by packing plant slowdowns, Iowa producers have applied for payments to cull a comparatively small 43,897 head so far. So the Iowa state Agriculture Department offered on Tuesday to pay for the cost of disposal of hogs killed weeks ago.
The so-called disposal assistance program was announced on May 26, with $40 a head available to defray the cost of killing and disposal of market-weight hogs that have no buyer. The Agriculture Department opened a third round of applications on Tuesday as well expanding the program to include hogs destroyed from May 1-25.
“Covid-19 is causing ongoing disruptions to the food supply chain,” said Iowa Agriculture Secretary Mike Naig in a statement. “The disposal assistance program just one way the state is trying to help producers during this challenging time.”
Iowa is the No. 1 hog state in the country, home to one-third of the U.S. herd. At least one hog analyst has estimated a backlog of 2 million hogs nationwide. The National Pork Producers Council says producers face a $5 billion loss from low hog prices and costs of killing hogs that back up on farms due to processing bottlenecks.
After Iowa launched its disposal assistance program, six farmers asked in the first round of applications for financial assistance for culling 25,502 hogs. In the second round, six farmers applied for payments on 18,395 hogs. A spokeswoman for Naig declined to speculate on the participation rate.
The state allotted $24 million for the program, enough to pay for 600,000 hogs. Farmers can apply in each round for payments on up to 30,000 head.
USDA data showed red meat production last week was slightly larger than the same week in 2019. The USDA said poultry plants were running at 98 percent capacity. Some of the largest meat plants in the country closed temporarily in April because of coronavirus outbreaks among workers.