Source:  NC PORKLINE, 10/23/09

Laying out the origins of a 2-year-old economic crisis, including the effect on the  pork industry of the novel H1N1 flu, the National Pork Producers Council yesterday asked Congress to take steps to help U.S.  pork producers.

The U.S. pork industry has lost more than $5.3 billion since September 2007, with producers losing nearly $23 on each hog  marketed since then, NPPC President Don Butler told the House Committee on Agriculture Subcommittee on Livestock, Dairy,  and Poultry in testimony yesterday.

Many factors have contributed to the economic crisis, including the unwarranted bans on U.S. pork by some countries, citing  fears of the H1N1 flu, Butler pointed out. But the biggest reason, he said, has been high feed grain prices. Feed prices, which  account for 60 percent of the cost of raising a hog, have increased over the past two years mostly because of U.S. biofuels policy.

Butler asked Congress to:

• Urge the U.S. Department of Agriculture to make more purchases of pork for various federal food assistance programs. USDA recently bought $30 million of pork.
• Reexamine a spending cap on USDA's Section 32 program so the agency can meet the goals of the program. Congress implemented the cap as part of the 2008 Farm Bill.
• Pressure U.S. trading partners, particularly China and Russia, to eliminate their barriers to U.S. pork imports.
• Approve as soon as possible the pending free trade agreements with Colombia, Panama and South Korea, which would add greatly to pork producers' bottom line.
• Conduct a study of the economic impact on the livestock industry of an expansion of corn-ethanol production and usage. EPA is considering an increase in the amount of ethanol that must be blended into gasoline to 15 percent from its current 10 percent.
• Support allowing the ethanol import tariff and federal blenders' tax credit to expire.
• Support regulations and legislation that promote pork producers' ability to run their operations.
• Oppose measures that would place on pork producers undue burdens and higher costs such as restrictions on access to capital and contract arrangements or prohibitions on production practices, including banning the use of certain animal health products.

"To stop producer foreclosures and bankruptcies and for us to continue providing consumers around the globe with the safest, most nutritious meat protein, we need to find a way out of this 2-year-old crisis," Butler said. "We are asking Congress and our government for some help."

At the conclusion of the hearing, Congressman David Scott, Chairman of the House Agriculture Committee's Subcommittee on Livestock, Dairy and Poultry, commented that, "Over the last several years pork producers have suffered a serious decline in their financial well-being.  Clearly, if this situation persists and producers continue to lose money, many will simply leave farming altogether, which is certainly an undesirable outcome.  Something must be done, both in the short term and long term, in order to help pork producers turn their industry around."
 
"Today's hearing outlined many of the factors contributing to the current crisis and also offered some potential solutions.  I look forward to working with my colleagues and other stakeholders to examine these issues more closely and to pursuing ideas that will lead to better outcomes for our farmers," Scott said. 
 
Others testifying at the hearing included

Mr. Michael Scuse, Deputy Under Secretary, Farm Service Agency, U.S. Department of Agriculture; Mr. Mark Greenwood, Vice President, Agri Business Capital, AgStar Financial Services, Mankato, Minnesota; Brian Buhr, Ph.D., Professor in Applied Economics, University of Minnesota; Mr. Rod K. Brenneman, President and CEO, Seaboard Foods, Shawnee Mission, Kansas; and Mr. Dave Moody, Public Policy Chair and Past President, Iowa Pork Producers Association.

Click here for a copy of Butler's testimony.