The Campaign for Family Farms and the Environment submitted a letter with more than 25,000 signatures to Ag Secretary Tom Vilsack Tuesday, asking the USDA to suspend loans and loan guarantees that are used to expand hog and poultry production.

The campaign and several affiliated groups are asking for a suspension of Farm Service Agency (FSA) loans similar to one made under President Bill Clinton in 1999, when hog prices were also depressed.

Once again, hog farming is unprofitable.

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"Hog farmers have been looking at below-cost-of-production prices for two years now," said Rhonda Perry of the Missouri Rural Crisis Center. As the hog industry was entering an economic slump, ag economists predicted the industry would have to cut breeding stock by about 10%, Perry said. So far, it has cut back by about 3%.

Yet, during the 2008 and 2009 federal fiscal years, which end September 30, FSA has made $264 .4 million in loans for expansion of hog and poultry production.

"Hog farmers I asked to sign this can't believe these loans are being made," said Paul Sobocinski, a Wabasso, Minnesota, crop and hog farmer and organizer for the Land Stewardship Project (LSP).

LSP, the Missouri Rural Crisis Center and Iowa Citizens for Community Improvement are members of the Campaign for Family Farms and supporters of the lending freeze.

They said that the freeze would not affect the ability of producers to refinance troubled debt through FSA. And, they said, it doesn't make sense to expand production when prices are depressed and at a time when USDA is already buying large amounts of poultry and pork for school lunch programs.

While on a visit to Iowa Tuesday, Deputy Secretary of Agriculture Kathleen Merrigan was asked her response to the petition.

She hasn't read it yet, she said, although she had heard Rhonda Perry of the Missouri Rural Crisis Center talk about it recently at the Farm Aid concert.

"We'll take a look at it and discuss it at USDA," Merrigan said.

On Tuesday, Perry said that she also thought that the vertical integration of the hog industry has made it less responsive to market signals that hog production needs to be cut back.

Merrigan mentioned that the USDA and Department of Justice will soon be holding public meetings on economic power and competition in agriculture. The meetings are likely to take place in March "but we dont have dates and places yet," she said.

"We think it's a long overdue conversation," she said.

Earlier on Tuesday, Senator Chuck Grassley (R-IA) was asked about the petition to suspend FSA loans for hog and poultry expansion. He said he would not want to do that if it hurt lending to beginning farmers.

"Most of the big farms and big feedlots have private sector money," he said.

Grassley said that he favors targeting FSA loans to small farms, not large producers.

Perry and others asking for the loan suspension said that it would apply only to new buildings for hog and poultry production and would not affect existing operations. And, they said, the loan suspension would make more money available for existing farms that may need loans from FSA.