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‘Spot market’ program aims pandemic aid at hog farmers

The government will send up to $50 million to hog farmers who were forced to sell hogs at pandemic-depressed prices on the spot market during the summer of 2020, said the Agriculture Department on Monday. The announcement came a month after the USDA said it was disbursing $270 million to contract growers of hogs and poultry through its Pandemic Assistance for Producers initiative.

Some $7 billion has been paid to farmers and ranchers since the Biden administration remodeled coronavirus relief programs in March to “reach a broader set of producers,” including socially disadvantaged farmers, specialty crop and organic producers, timber harvesters and biofuel producers.

The new Spot Market Hog Pandemic Program will pay farmers $54 per head on up to 10,000 hogs sold at negotiated prices between April 16 and Sept. 1, 2020. Pork processors bought fewer hogs and offered lower prices for them because of COVID-19 outbreaks among slaughterhouse workers that reduced production. Signup will open on Wednesday and run through Feb. 25, 2022. Contract growers and packers are not eligible for the aid.

“Previous pandemic assistance used a flat rate across the hog industry and this didn’t take into account the various levels of harm felt by different producers,” said Zach Ducheneaux of the Farm Service Administration. “We worked closely with industry partners and USDA’s Agricultural Marketing Service to target assistance to hog producers who were hit the hardest during the pandemic.”

Agriculture Secretary Tom Vilsack first mentioned the spot market payments in July, saying research indicated that small hog farmers, especially those who sold their stock for spot or negotiated prices, bore a disproportionate share of losses due to low market prices.

Hog farmers have received $1.16 billion in coronavirus relief since the USDA’s Coronavirus Food Assistance Program went into operation in May 2020. Cattle producers have gotten nearly $8.4 billion, or more than a quarter of the $30.8 billion that has been distributed. Other top recipients were corn farmers, $6.8 billion; soybean growers, $3.4 billion; dairy farmers, $3 billion; and wheat growers, $1.5 billion.

The leading states for payments were Iowa, $2.67 billion; California, $2.157 billion and Nebraska, $2.02 billion.

To reach the home page for Pandemic Assistance for Producers, click here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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