Arden Hills, MN - Land O'Lakes commends Ag Secretary Dan Glickman for the actions announced to help pork producers. In a letter to Glickman, Land O'Lakes CEO Jack Gherty offered a list of ideas for USDA to consider as it seeks additional ways to deal with the crisis in the hog industry.
“The Secretary's announcement offers a ray of hope, to beleaguered hog farmers,” Gherty says. “Accelerated purchases of pork for federal food assistance programs, and including quantities of pork in the Russian food aid package, will help soak up some of the excess supply. But we need to identify and implement additional measures to help independent producers survive the current crisis and to avert future problems.”
Glickman has created a Pork Crisis Task Force to recommend other actions to help support hog prices. In his letter to Glickman, Gherty outlined several ideas.
“As a national leader in agriculture and as a farmer-owned cooperative, we believe the situation is urgent and requires some creative solutions. We've given a lot of thought to the situation and come up with some ideas,” Gherty says.
-- Continue and increase purchases of pork for domestic feeding programs and international hunger relief.
-- Seek Congressional authority and emergency funding for a "market loss payment" to pork producers similar to the emergency payments to farmers authorized in the FY 1999 budget agreement.
-- Consider a "whole hog buyout." USDA could buy breeding herds either for export or for slaughter. This would provide a temporary relief valve to lessen the supply of hogs in the short term. It also would provide an alternative for hog producers who want to shift their investment to another enterprise, or to retire.
-- Implement a "pork options pilot program" to help hog farmers learn how to use the futures market as a risk management tool.
-- Conduct a thorough review of marketing contracts, 1) to assure that producers' interests are protected within the contracts, and 2) to help standardize marketing contracts as a tool that helps producers manage risk.
-- Develop new risk management tools to help producers protect themselves from future hog market price volatility.
-- USDA recently announced $200 million to support the creation of cooperatives through the Business and Industry Guaranteed Loan fund. Gherty suggested that the department should consider supporting a producer-owned packing facility to stimulate competition and help producers benefit from further processing their hogs.
Gherty also advised Glickman that the Land O'Lakes board has reaffirmed its commitment to keeping a strong, farmer-owned involvement in the hog industry. Land O'Lakes has developed producer-oriented consulting and financing programs, as well as contract operations and an aligned swine system geared to family farmer's needs and demands.
Meat Industry Insights News Service
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