Washington - Plummeting pork prices probably will stabilize soon, but it will take hog farmers a long time to recover from the lowest prices in four decades, experts say,
Nearly a dozen pork producers met Tuesday with President Clinton and Agriculture Secretary Dan Glickman.
“We are being driven off the precious land entrusted to our care,” said Herman Schumacher, a producer and auctioneer from Herreid, S.D. “Third, fourth and fifth generation farmers and ranchers are being left with as little as the shirt on our back.”
Also at the meeting were Senate Minority Leader Tom Daschle, D-S.D., and several other lawmakers.
A Senate hearing Tuesday to discuss low livestock prices in general, was dominated by talk of hog prices, which have dropped as low as $8 to $10 a hundredweight in recent weeks, down from $46.50 a year ago.
Those low prices are expected to end sometime this summer, said John D. Lawrence, an economics professor at Iowa State University, who said prices will begin to move upward sometime next month. However, he said it will take a major debt restructuring for farmers to survive.
“The damage caused by the losses. . . will leave a lasting legacy on surviving producers and the industry,” Lawrence said.
Michael Dunn, the Agriculture Department's undersecretary for marketing and regulatory programs, had a similar view, saying the oversupply problem that led to a glut of pork seems to be dropping.
For instance, Dunn said the U.S. hog inventory on Dec. 1 was 62.2 million head, 2 percent above the 1997 level. Still, Dunn said the amount was a 2 percent decrease from the September level.
“A corresponding reduction . . . is expected during the fall marketing period if producers follow through with their intentions,” Dunn said. “We are hopeful that this decline in inventories is a signal the situation is beginning to stabilize.”
Dunn said prices have improved since USDA announced last month it would buy $65 million worth of pork to help prices as well as form a Pork Crisis Task Force and defer some loan payments.
“Both cash and futures prices have strengthened since USDA began to take action,” he said.
Meat Industry Insights News Service
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