WASHINGTON – Even with pork capacity continuing to stabilize throughout the United States, The National Pork Producers Council (NPPC) warned that the backup of hog production is still a problem for farmers across the country.
During a press conference on July 20, Steve Meyer, PhD, an economist with Kerns & Associates, projected that 2 million hogs remain backed up on farms with the possibility of hog sales losing $4.7 billion in 2020. Meyer made his analysis based on lean hog futures prices on March 1 and July 10 and actual hog prices in the interim.
“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.”
According to Meyer, other losses by hog farmers during the rest of 2020 will be associated with euthanasia, disposal and donation of pigs with no market outlet and insufficient space to hold them. He also said it appears those losses will likely continue into 2021.
“Many US hog farmers will not survive this crisis,” said Howard Roth, NPPC president. “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 officials are trying to rally support for the pork industry following the introduction of the RELIEF for Producers Act of 2020 in early July. The bill was sponsored by Senators Jim Inhofe (R-Okla.), Richard Burr (R-NC), Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa) and Thom Tillis (R-NC).
The trade association said it strongly supported the legislation along with additional federal assistance proposed by Representative 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 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 US pork industry.”