The COVID-19 pandemic is ham-stringing pork producers with plummeting hog prices, animals stockpiling on farms and mounting costs for euthanization.
As the Senate returns to Capitol Hill to consider the next pandemic relief package, pork producers’ message is clear, Howard “A.V” Roth, president of National Pork Producers Council, said in a press call on Monday.
“We need help now to weather this unprecedented crisis,” he said.
Producers face a $5 billion loss, and the situation is taking a significant financial and emotional toll. Without assistance, many producers could go out of business — forever changing the agricultural and economic landscape, he said.
NPPC is urging the Senate to pass a bill introduced earlier this month that would compensate producers for euthanizing or donating animals.
The bill would also provide increased funding for animal-health surveillance and laboratories and revise the Commodity Credit Corporation charter so a pandemic-driven national emergency qualifies for funding.
NPPC also supports additional federal assistance led by House ag committee Chairman Collin Peterson, D-Minn.
“The consequences of inaction are too great and would upset a healthy, dynamic and highly competitive pork production system that has served our farmers, the rural community and consumers so well,” Roth said.
Hog producers are facing a slow-motion disaster, Steve Meyer, economist with Kerns and Associates, said.
“The value of U.S. pig production this year has a taken a dramatic hit,” he said.
Potential revenue from hog sales will be reduced by $4.7 billion from estimates before the pandemic. And producers have had to euthanize both market-ready hogs and younger pigs, he said.
Closures and slow-downs at processing plants reduced capacity to 40% at one point. While that capacity has rebounded to 95%, there were still more than 2 million pigs backed up on farms as of June 1, he said.
From June 1 through last week, the back-up of slaughter-ready hogs was 1.1 million. With changes at processing plants to address social distancing, capacity is likely to remain at 95%, he said.
“The whole impact of that is we can’t push as many pigs through,” he said.
He expects the backlog in slaughter-ready hogs to grow to 1.6 million by the end of August and 2.5 million by the end of the year.
This is by far the largest economic hit the industry has ever taken. Producers are going to be in dire straits, and bankruptcies are coming, he said.
At the start of the year, producers were looking at a profit of $20 a head. They’re now facing a loss of $10 a head, and that’s after two years of breakeven, he said.
He estimates 300,000 to 400,000 market-ready hogs were euthanized in May, with another 1 million younger pigs euthanized on farms.
Given the number of animals backed up on farms, there will likely be more, said Nick Giordano, NPPC vice president and counsel for government affairs.
“We know we’re going to lose producers — small, medium and large — the question is how many,” he said.
NPPC’s priority is to keep as many producers in business as possible, he said.
“We need a lifeline,” he said.
The Link LonkJuly 21, 2020 at 07:00AM
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Pork producers in dire straits | Livestock - Capital Press
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