Washington - The Agriculture Department will temporarily stop lending money for new pork production plants, the latest move in an effort to reverse declining hog prices.
The moratorium on USDA loans was one of several steps announced Thursday by Agriculture Secretary Dan Glickman a week after he formed a task force to look at ways to help hog farmers, struggling with their lowest prices in four decades.
“Because the crux of the problem is oversupply, we want to stop any government action that could exacerbate the situation,” Glickman said.
To further reduce the oversupply, Glickman said he was working with members of Congress, governors and the heads of major slaughterhouses to try to increase the number of hogs that are butchered, thus decreasing the supply and eventually driving the price up.
In addition, he said he has asked other federal agencies to boost their purchases of pork. And 50,000 tons of pork are headed for Russia under the current food aid package, he said.
Glickman also announced an acceleration of a voluntary program to destroy as many as 1.7 million hogs that could carry the pseudo-rabies virus, which does not affect humans but is fatal to domestic animals such as dogs and cats. Being able to certify hogs as virus free would open up other foreign markets to U.S. pork products, he said.
The agriculture secretary's actions come against a backdrop of sharply declining hog prices. Prices have dropped to less than $10 per hundredweight in some areas of the country, down from $46.50 just a year ago.
Donna Reifschneider, president of the National Pork Producers Council, called Glickman's actions a “positive first step.”
Meanwhile, Glickman said, farmers can apply for federally guaranteed loans to help them through the current crisis.
Glickman also asked for an investigation of pork prices, a step that drew the support of Republican Sen. Chuck Grassley of Iowa, the nation's largest hog state.
“Over the long haul,” he said, “the most important announcement may be the secretary's pledge to investigate noncompetitive practices in the industry.”
Last month, the government said it would buy $50 million worth of pork for the federal food assistance programs to try to boost prices.
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