‘Spot market’ hog payments may be pro-rated
Hog farmers will have an additional two weeks, until April 29, to apply for federal payments to offset the pandemic-depressed prices offered by packers on the cash market during the summer of 2020, said the Agriculture Department on Thursday.
Payments of $54 per hog may be pro-rated if applications exceed funding for the Spot Market Hog Pandemic Program, it said.
The USDA announced the program last December to assist hog farmers who were forced to accept low cash bids for their stock from April 16 to Sept. 1, 2020.
Up to $50 million was available for payments.
Pork processors bought fewer hogs and paid lower prices for them because of Covid-19 outbreaks among slaughterhouse workers that reduced pork production.
Payments are available on up to 10,000 hogs per farmer.
The USDA announced the extension of the application period and the possibly pro-rated payments at the same time that it clarified its definitions of a spot sale and the pigs that are eligible for payments.
“The only direct-to-packer sales that are eligible for SMHPP are those through a negotiated sale,” said the USDA. “Hogs sold through a contract that includes a premium above the spot market price or other formula such as the wholesale cut-out price remain ineligible. Hogs must be suitable and intended for slaughter to be eligible. Immature swine (pigs) are ineligible.”