Washington - National Pork Producers Council (NPPC) President Donna Reifschneider called on Congress to require all packing plants to report the prices they pay for live hogs on a daily basis, as well as other measures necessary to enable producers to “regain and maintain their rightful position as the profit center of this industry.”
“Pork producers believe the time has come to require real transparency in the marketplace,” Reifschneider told members of the Senate Agriculture Committee. “Accurate and timely information will give producers the tools they need to make the marketing decisions appropriate for their operations.”
Reifschneider, a pork producer from Smithton, Ill., noted that in December, reduced processing capacity coupled with higher U.S. production and an increase in Canadian hog exports created severe bottlenecks at American packing plants and drove prices below $10 per hundredweight. The five-year average price for live hogs is $46.77 per hundredweight.
Reifschneider suggested that increased production alone, especially in light of excellent domestic demand for pork, could not account for the steep drop in prices paid to producers.
“Noted agricultural economists Glenn Grimes and Ron Plain (University of Missouri) point out that 1998's production increase was not unusual compared to other hog cycles, yet prices fell much further,” she said. “The four largest packers process 57 percent of all hogs. What effect did this increase in concentration and the resulting marketing relationships have on the live hog price decline? These issues need to be examined further.”
In addition to wholesale price reporting, Reifschneider asked Congress to pass legislation mandating:
-- A mandatory swine marketing contracts reporting program;
-- Improved monthly retail price reporting;
-- Monthly, rather than quarterly, hogs and pigs inventory reporting;
-- Uniform carcass measurement and transparent pricing, and;
-- Swine production building construction reporting.
Reifschneider also suggested Congress ask the General Accounting Office or another respected entity to study the Packers and Stockyards Act to determine what specific powers the Secretary of Agriculture has to respond to the type of price crisis pork producers are presently experiencing.
Reifschneider said while pork producers normally shun government solutions, the present crisis dwarfed others that the industry has witnessed.
“Pork producers are not in the habit of asking the federal government for assistance,” she said. “However, there are thousands of professional, efficient, conscientious pork producers who are teetering on the edge of bankruptcy through no fault of their own.”
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