Washington - The Clinton administration stepped up its effort Monday to help hog producers struggling with the lowest prices in more than four decades amid a call from Senate Democrats for an anti-trust investigation of the pork industry.
Despite farmers getting about a dime a pound for their hogs, a slump of 70 percent for producer prices, retail prices have remained much firmer. Agriculture Secretary Dan Glickman told reporters last week that one reason he wanted to meet with meat packers was to find out why retail prices have not dropped more.
After Glickman spent much of the day meeting with farm and industry groups to discuss the pork crisis, Vice-President Al Gore announced that the agriculture department would buy an additional $15 million worth of pork to help bolster prices.
The department has already bought more than $80 million worth of pork since March. The additional purchases will be used to replenish food banks for the hungry, Gore said.
Glickman began his day meeting with meat packers and ended it meeting with the American Farm Bureau Federation, the nation's largest U.S. farm organization.
The packers told Glickman they doing “all they can” to reduce current hog surpluses, including operating six days a week and running double shifts, said Sara Lilygren, a vice-president at the American Meat Institute.
“Building demand is going to be the biggest help in the short term,” she said, referring to the need for more government purchases.
After his last meeting, Glickman told reporters that the administration would continue to look at a number of options, including one raised by the Farm Bureau for a loan program.
However, there is a question of whether the department could do that own its own authority or would need new legislation, he said.
Current hog prices near $10 per hundred pounds are well below the cost of production, which the Farm Bureau conservatively estimated at $36 per hundred pounds.
With that price gap, an “average hog producer” is losing about $6,700 per week if he markets 100 hogs a week that each weigh about 260 pounds, the Farm Bureau said.
A loan program of “several hundred million to a half billion dollars,” based on hog marketing between Oct. 1, 1998 and April 1 would help keep producers afloat until prices recovered, Farm Bureau President Dean Kleckner told reporters.
Without a credit package, “the current problem will be exacerbated by producers being forced to dump their hogs on the market, further depressing prices,” he said.
Meanwhile, a group of Democratic senators, including Senate Minority Leader Tom Daschle, saw sinister forces at work in the pork price plummet.
“Enough evidence exists to raise some strong suspicion that more than just the invisible hand of the market is at work,” the seven farm state senators wrote in a letter to President Clinton.
The senators contradicted the packers' claim that were doing “all they can” to reduce hog surpluses and accused the industry of closing some plants that should have been kept open.
In addition to requesting an anti-trust investigation of the pork packing industry, the senators asked Clinton to submit new legislation next year if the administration feels it needs more power to fight industry consolidation.
The United States should also urge “Canada to slaughter more of its own hog production” in its own packing plants to stop a flood of live hogs coming over the border that are depressing U.S. prices, the senators said.
Meat Industry Insights News Service
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