More Government Money for Pork Industry
In September, US Agriculture Secretary Tom Vilsack approved an additional $30 million in September to bail out the financially distressed pork industry after initially denying a $50 million request from Governor Chet Culver and eight other governors.
This is the fourth time government funds were allotted to the ailing industry, bringing the total to $147 million since the spring reports Radio Iowa. In March, the USDA purchased $25 million in pork, followed by a $50 million purchase in April, and 775,000 pounds of ham was purchased in July, reports RadioIowa.com.
Secretary Vilsack initially denied the $50 million request because of financial demands made by the dairy industry and other commodity industries this past year. He indicated that additional funds might be available at the beginning of the new fiscal year in October.
But the USDA located $30 million for purchases through the federal food and nutrition assistance programs, such as the free and reduced school lunch program, food banks, and programs for the elderly.
Senators Chuck Grassley, Tom Harkin, and Representative Leonard Boswell have all lauded the government's decision to purchase the pork.
With pork prices declining over the past two years, the pork industry has lost $4.5 billion to date. Pork producers, who are currently losing over $30 per hog, are expected to see that loss climb to $54 per head this fall.
The industry was hit hard by the outbreak of the H1N1 flu, also known as Swine Flu, which hurt public confidence in pork's safety and led China and other countries to ban the import of US pork. High feed costs have also affected profitability.
Agricultural economists have warned for months that the pork industry should stabilize prices by cost cutting and herd reduction, but the industry has been reluctant to reduce herd size, continuing to increase the pork supply even when facing a dwindling demand.
In August three pork producer marketing groups have recommended a $200 million government program that would buy out sows, reducing the country's overall herd size by one half million.