Pork producers ask for lifeline as industry in dire crisis
April 18-- Apr. 18--WORTHINGTON -- With pork processing facilities in Columbus Junction, Iowa and Sioux Falls, South Dakota temporarily shuttered due to outbreaks of COVID-19 among employees, the nation's pork producers are facing a financial crisis with estimated farm losses of $5 billion collectively ($37 for every market-ready hog) this year.
That information was presented during a nationwide conference call between leaders of the National Pork Producers Council (NPPC) and reporters earlier this week.
"COVID-19 has had a sudden and devastating impact on U.S. hog farmers.," said NPPC President Howard "A.V." Roth, a pork producer from Wauzeka, Wisconsin. "We are in crisis and need immediate government intervention to sustain a farm sector essential to the nation's food supply.
"A long-standing labor shortage, already limiting plant harvest capacity, has become dramatically worse in recent days as plants have suspended operations and deal with rising worker absentees. As a result, hogs are backing up on our farms, creating a financial crisis as hog values plummet. Market-ready hogs have nowhere to go."
Not only are hogs backing up on farms due to delivery issues with packers, but there's also a glut of pork in cold storage.
Roth said trade retaliation by China has caused significant losses for America's export-dependent pork farmers over the past two years. Now, with COVID-19 leading to shuttered schools and restaurants, U.S. sales of pork have also taken a hit.
"We are now a farm sector in dire crisis," Roth said. "Farmers are already exiting the business, and the damage will worsen without immediate government intervention."
NPPC this week asked the U.S. Department of Agriculture to purchase more than $1 billion in pork to help clear out the backed-up meat supply. In doing so, the USDA could distribute the meat to food bank programs facing increased demand due to rising unemployment caused by the global pandemic.
The organization is also requesting equitable direct payments to pork producers without eligibility restrictions, as well as a legislative fix to emergency loan programs.
"Approximately 10,000 family hog farms are in jeopardy because they do not have access to much-needed capital offered by the Small Business Administration," NPPC shared, noting its request to Congress to increase the cap on qualifying businesses to those that employ up to 1,500, and to make agricultural businesses eligible for the Economic Injury Disaster Loan program.
Roth said farmers hope China will remove its retaliatory tariffs on U.S. pork, which would more than double pork exports to China and put American hog farmers back on a level playing field with competitors, he said.
"We are resilient and typically a self-sufficient bunch," Roth said of pork producers, but COVID-19 has put many of them in danger of losing their livelihood. "If we do not get this help, many decisions will be made on our farms that will affect the world's pork supply for many years to come."
Among those decisions, Roth said, could be euthanizing baby pigs if hog barns are full and there's no place for the piglets to go.
"As a pork producer, we care about our animals," he shared. "The last thing we want is to euthanize one. And we are going to make sure we don't do that so you can have pork on your plate tonight."
"Our producers are in the business of providing safe, nutritious pork to consumers. It's against their grain to see that wasted," said NPPC CEO Neil Dierks. "However, with the backlog, there will be individual decisions, and (farmers) may choose to euthanize."
In recent weeks, the Environmental Protection Agency granted a waiver for pork producers to temporarily exceed animal unit thresholds on farms, provided they have the space, which may help farmers short-term.
Nick Giordano, in global government affairs for NPPC, said the economics of pork production don't make sense at this time. The cost of feeding a hog is higher than the price farmers will get when that hog goes to market.
Giordana said NPPC is talking to the administration every day in Washington, D.C. with the hope of "swift and meaningful relief."
"There are a lot of things beyond (farmer) control," he said. "They need a lifeline from the federal government and they need it fast, or we're going to lose a lot of producers."
The U.S. Department of Agriculture (USDA) on Friday announced a COVID-19 relief package that includes $3 billion in planned agricultural product purchases and $1.6 billion in direct payments to hog farmers, including payment limitations of $125,000 per commodity and $250,000 per individual.
Industry economists conservatively estimate that hog farmers will lose $37 per hog marketed, or $5 billion collectively, for the remainder of the year.
"We fear the lifeline so desperately needed will fall short of what is truly needed.," said Howard "A.V." Roth, president of the National Pork Producers Council and a hog farmer from Wauzeka, Wisconsin. "While the direct payments to hog farmers will offset some losses for some farmers, they are not sufficient to sustain the varied market participants, including those who own hogs as well as thousands of contract growers who care for pigs.
"All of these participants have made sizable investments in a U.S. pork production system that is the envy of the world. Many generational family farms will go bankrupt without immediate financial aid.
"We are thankful for USDA commodity purchases, a step that will hopefully help move a backed up supply of pork to those who need it, creating much-needed plant capacity to harvest market-ready hogs that have lost value as they have backed-up on farms because of COVID-19," Roth added.
"Our farm sector is made up of different market participants who are dependent on one another to maintain profitable operations. Unlike other industries that have received COVID relief aid without restrictions, many of our hog farmers have been left behind. Without quick action to extend support where it is needed most, we will see pork industry consolidation, a decline in healthy competition that drives innovation and the loss of a relished rural lifestyle for many farm families."