Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 8/18/09

The National Pork Producers Council on Monday renewed requests for federal assistance in taking excess pork off the market, while over the weekend, the Canadian government announced a C$75 million program to reduce hog production and oversupply.

Canadian Agriculture Minister Gerry Ritz on Saturday announced a C$75 million Hog Farm Transition Program to allow producers to tender bids for the amount of funding they need to leave the hog industry for at least three years.

The Canadian government is also offering financial institutions government-backed credit for viable producers and setting up an International Pork Marketing Fund of C$17 million to find new customers for Canadian pork products.

NPPC knocking at the door

On Monday, NPPC sent a letter to Agriculture Secretary Tom Vilsack asking for assistance to U.S. pork producers to help them weather a nearly 2-year-old economic crisis. Specifically, NPPC asked USDA to:

immediately buy an additional $50 million of pork for various federal food programs other than ones in USDA's Section 32 program — using fiscal 2009 funds

urge Congress to lift a spending cap on the Section 32 program, and use $50 million of $300 million available to purchase pork for the program (which includes school lunch)

buy on Oct. 1 a minimum of $50 million of pork, using fiscal 2010 funds. Fiscal 2010 begins Oct. 1. The purchase would be in addition to USDA's annual buy.

use $100 million of the $1 billion appropriated for addressing the H1N1 virus for the swine industry. This would include $70 million for swine disease surveillance, $10 million for diagnostics and H1N1 vaccine development and $20 million for industry support

work with the U.S. Trade Representative to open export markets to U.S. pork, including China and other that imposed bans on U.S. pork because of the H1N1 flu and

study the economic impact on the livestock industry of an expansion of corn-ethanol production and usage.

Not a solution

Even if USDA granted all NPPC's wishes, it would not turn the U.S. pork industry around.

"We need to remember these purchases, while sizable, are not huge relative to the product on the market," Paragon Economics President Steve Meyer said on an NPPC teleconference. "Let's not let ourselves think this action will help us get back into the black."

Meyer reiterated the need for a 10 percent reduction in the U.S. sow herd, noting the herd is down just over 3 percent so far this year.

NPPC Communications Director Dave Warner told Meatingplace additional herd reduction is happening now, as lenders cut off credit to producers who have used up all their equity over the past 22 months.

Meyer said pork producers who had more than 75 percent equity in their operations in 2007 are now looking at equity ratios of 40 percent or less.

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