Last Saturday, the Canadian government announced a comprehensive restructuring plan for pork producers, which includes key marketing initiatives, government-backed credit to help viable operations, and a “Hog Farm Transition Program.” The latter will allow producers to tender bids for the amount of funding they need to transition out of the hog industry and cease hog production.
The U.S. pork industry is struggling as well. On Monday, the National Pork Producers Council (NPPC) asked for help from the U.S. Department of Agriculture: “U.S. pork producers are in desperate straits right now, and they need a little help from USDA,” said NPPC President Don Butler. “The request NPPC has made not only will help pork producers and Americans who benefit from government feeding programs, but tens of thousands of mostly rural jobs supported by the U.S. pork industry.”
Governors from nine states made a similar request earlier this month, but at that time, Secretary of Agriculture Tom Vilsack answered bluntly, “We don’t have $50 million.”
However, as NPPC points out, Congress could lift a spending cap on the Section 32 program, and use $50 million of the $300 million available, to purchase pork. This program uses customs receipts to buy non-price-supported commodities for school lunch and other food programs.
NPPC also asked for assistance in opening markets that were closed (presumably due to H1N1 concerns), as well as a request for $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.
If USDA doesn’t have $50 million, will the Obama administration or Congress be able to come up with even more in the present economic situation? It’s doubtful.
Even if the money became available, will it be enough, or will the U.S. government need to offer an exit strategy like Canada’s?
"We know Canadian hog producers can become profitable again, but we have to face tough realities to make our pork industry lean and competitive," said Agriculture Minister Gerry Ritz.
It seems to me the pork industries on both sides of the border are already as “lean and mean” as they can possibly be. Producers have had depressed markets for over a year and have been making drastic adjustments to stay in business. The only things that will help are increased demand, more market access, and, most importantly, fewer sows. What do you think?