Washington - Agriculture Secretary Dan Glickman offered hard-hit pork producers a bit of early Christmas cheer yesterday, leaning on meatpackers to raise prices paid for hogs and asking food retailers to show cheap pork in their sales cases.
In a briefing with farm radio reporters, Glickman also said the Agriculture Department would help trim the bulging U.S. swine herd by paying farmers to kill as many as 1.7 million hogs under a voluntary program to eradicate "pseudorabies," a lethal viral disease that afflicts hogs and other livestock.
"We are clearly in the midst of a major crisis where hog prices have hit their lowest level in nearly five decades," Glickman said.
But he also urged pork producers and other segments of the industry not to panic.
"Even though folks are in a crunch now, the long-term outlook is positive," he said.
Earlier this week, Farmland Industries, a Kansas City-based farmer-owned cooperative, and Hatfield Inc., a Lansdowne, Pa.-based pork processor, took their own steps to help pork producers. Each announced a minimum price that was above current market prices for hogs from their regular suppliers.
Farmland pledged to pay at least $15 per hundred pounds and Hatfield at least $25, compared with market prices that have dipped to less than $10 in some parts of the country.
Glickman praised the action and called on all U.S. packers to follow suit by setting their own price floors.
But Glickman also said he was concerned that the domination of the meatpacking industry by a few large firms may have contributed to the current low prices and said he would ask antitrust experts at the Justice Department and the Federal Trade Commission to help examine that issue. Glickman has expressed similar concerns over beef packers.
John Eichberger, a spokesman for the American Meat Institute, which represents packers and processors, said it would be up to individual firms to decide whether to set a minimum price.
Despite criticism that meatpackers should be doing more to reduce hog supplies, Eichberger said the industry is on pace to slaughter the largest number of hogs this year since the 1960s.
"We've been working as hard as we can to reduce this supply," he said. "It's just going to take some time."
Glickman also said that food retailers had promised in a meeting this week to feature pork as much as possible in their meat display cases.
To date, the drop in retail pork prices has lagged behind the drop in hog prices, he said.
Farm groups had hoped that Glickman would announce a new loan program to help hog producers manage cash-flow problems. But Glickman said budget and legal restrictions prevented him from doing that without new legislation.
Glickman announced a moratorium on new USDA direct or guaranteed loans to help hog farmers build new facilities.
"Because the crux of the problem is oversupply, we want to stop any government action that could exacerbate the situation," he said.
Meat Industry Insights News Service
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