May 1st, 2008 - Washington D.C. - Senator Norm Coleman today announced the United States Department of Agriculture will use $50 million in Section 32 funds to assist U.S. pork producers who are currently experiencing the worst economic crisis in a decade because of rapidly rising input costs and an increasingly tight credit market. U.S pork producers have lost between $30-50 per hog, over the past seven months, which translates into an estimated loss of $2.1 billion. USDA’s funding will help reverse the negative trend in the pork industry by purchasing pork from reproductive hogs for emergency food programs, food pantries, or other non-commercial channels.
“As a vital component of Minnesota’s economy and food supply, the well-being of our pork industry is directly tied to the state’s—and the nation’s—overall well-being,” said Coleman. “These record losses are jeopardizing Minnesota’s original value added agriculture, and without help Minnesota could lose 2,000 jobs. We still need to work to address the credit crunch facing pork producers, but this action by USDA will have an enormous positive impact.”
Record input costs are the major contributor to this economic crisis. Feed represents 65 percent of the cost of producing a market hog or sow. In the past year, feed costs have more than doubled without a commensurate increase in hog or sow prices. In addition to losing money for every hog and sow brought to market, U.S. pork producers increasingly must invest more working capital to raise animals to market weight, which has resulted in a depletion of cash reserves and lines of credit. The U.S. pork industry is feeling the pinch, with producer equity draining at 4 to 5 percent a month, and producers who are less able to manage risk over the longer term will soon be forced to leave the business all together. Minnesota’s livestock industry is the original “value added” agriculture that keeps more value in America’s small towns and rural communities, and the result of a contraction of the U.S. pork industry would have a tremendous impact on our states’ economies.
Contact(s):
Leroy Coleman, (202) 224-5641
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