Pork Producers Facing $5 Billion in Losses
Estimated Two Million Hogs Remain Backed-Up on Farms as Producers Face $5 Billion in Losses
WASHINGTON, D.C., July 20, 2020 – 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 Dr. Steve Meyer, an economist with Kerns & Associates. At a press briefing today, the National Pork Producers Council (NPPC) described the damage exacted on hog farmers and urged Congress to act swiftly to preserve their livelihoods.
Dr.
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” said Dr. Meyer. “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.”
“Many
U.S. hog farmers will not survive this crisis,” said NPPC President Howard “AV”
Roth, a hog farmer from Wauzeka, 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.”
Earlier
this month, 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. 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.”