Pork producers facing a national COVID crisis

U.S. hog farmers continue to face an unprecedented emergency as a result of COVID-related challenges, with an estimated two million hogs still backed-up on farms according to an analysis by Steve Meyer, an economist with Kerns & Associates. At a press briefing in July, the National Pork Producers Council (NPPC) described the damage exacted on hog farmers and urged Congress to act swiftly to preserve their livelihoods.

Meyer said U.S. hog farmers face massive losses due to multiple COVID-19 crisis-related factors, which have turned profit potential for 2020 from robust to disastrous. According to his analysis, based on lean hog futures prices on March 1 and July 10 and actual hog prices in the interim, potential 2020 revenue from hog sales has been reduced by roughly $4.7 billion. Other losses associated with euthanasia, disposal and donation of pigs with no market outlet and insufficient space to hold them mean U.S. pork producers have lost nearly $5 billion in actual and potential profits for 2020. He said it appears those losses will continue into 2021.

“This is, by far, the worst financial disaster ever for American hog farmers, who were already in a weakened financial position due to two years of trade retaliation” Meyer said. “As we entered 2020, hog farmers were finally looking at a profitable year, only to have COVID-19 turn the industry on its head. Hog farmers are now looking at $5 billion in losses — or $37 per hog — relative to what they expected for 2020 before the COVID-19 crisis began. Roughly two million hogs are still backed up on farms and this is likely to cause more pigs to be euthanized to prevent suffering due to overcrowding. If COVID prompts additional plant disruptions — a real possibility — the number of hogs backed-up on farms will swell precipitously.”

Earlier in July, Sens. Jim Inhofe (R-Okla.), Richard Burr (R-N.C.), Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa) and Thom Tillis (R-N.C.) introduced the RELIEF for Producers Act of 2020, providing compensation for farmers who are forced to euthanize or donate animals that can’t be processed into the food supply as a result of COVID-19, among other provisions.

“Many U.S. hog farmers will not survive this crisis,” said Howard “AV” Roth, NPPC President and a hog farmer from Wisconsin. “As the Senate begins work on the next COVID relief package, we urge lawmakers to provide a critical lifeline to hog farmers across the nation to minimize what has already been significant damage to our producers.”

NPPC strongly supports this legislation, as well as additional federal assistance championed by Rep. Collin Peterson (D-Minn.), and urges Congress to quickly address this unprecedented crisis plaguing pork producers.

“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 economy and consumers so well,” Roth said. “It’s imperative that Congress act now, or else thousands of farmers could go out of business, leading to consolidation and contraction of the U.S. pork industry.”

For more information on U.S. pork industry’s response to COVID-related challenges, please visit http://nppc.org/issues/issue/your-food-is-our-priority/.

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