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DIRE CRISIS HITTING PORK INDUSTRY AS PIGS BACK UP DUE TO COVID-19

The food chain crisis in the pork industry is not yet affecting grocery stores or consumers, say industry leaders, but it is a dire situation down on the farm.

The impact of COVID-19 has caused hog values to plummet and some packing plants to close, creating a financial and logistics disaster for producers.

Producers are losing about $50 a hog today, says the National Pork Producers Council (NPPC). It is requesting immediate relief from the Trump administration and Congress.

“We are taking on water fast. Immediate action is imperative, or a lot of hog farms will go under,” says NPPC President Howard “A.V.” Roth, a pork producer from Wauzeka, Wisconsin.

The suspension of pork packing plant operations and rising employee absenteeism due to COVID-19 has exacerbated an existing harvest facility capacity challenge due to a labor shortage in rural America. With limited harvest capacity, a surplus of pigs exists, causing hog values to plunge. The loss of the food services market and the COVID-related slowdown in most export markets has crashed demand and overwhelmed the cold storage of meat.

“The pork industry is based on a just-in-time inventory system,” says Roth. “Hogs are backing up on farms with nowhere to go, leaving farmers with tragic choices to make. Dairy producers can dump milk. Fruit and vegetable growers can dump produce. But hog farmers have nowhere to move their hogs. Without immediate and significant government intervention, euthanizing is a question that will come up on farms. We care about our animals. The last thing we would ever want to do is euthanize one and we are going to do everything in our power to make sure we don’t do that.”

At this writing, two commercial plants are not operating, a Tyson plant in southeast Iowa and a Smithfield plant in Sioux Falls, South Dakota. Other plants are not operating at full capacity.

Dermot Hayes, an economist with Iowa State University, says packers have a record large storage of pork now, product destined for food service that has not sold. There are several weeks or months of supply. “The number of packing plants that have closed is small relative to the total number of plants. The concern would be if we lose multiple plants, then we don’t have pork in storage and we don’t have plants in operation.”

NPPC, in consultation with hog farmers across the nation, identified several measures it has raised with federal policy makers, including:

Over $1 billion in pork purchases by the USDA to clear out a backed-up meat supply, supplementing agency food bank programs facing increased demand due to rising unemployment. These purchases should accommodate pork products packaged for restaurants and other segments of the food services market.

Equitable direct payments to producer participants without eligibility restrictions.

NPPC is also seeking a legislative fix to emergency loan programs that have left farmers behind. 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 urges Congress to increase the cap on qualifying businesses to those that employee up to 1,500 and to make agricultural businesses eligible for the Economic Injury Disaster Loan program.

Details

  • Des Moines, IA, USA
  • National Pork Producers Council