COVID-19 will cause US to lose 2.5 million hogs in 2020

COVID-19 will cause US to lose 2.5 million hogs in 2020

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National Pork Producers Council seeks additional federal relief for producers who are forced to euthanize or donate their pigs due to processing plant slowdowns

By the end of this year, there will be 2.5 million fewer hogs slaughtered than there should have been due to the novel coronavirus (COVID-19) pandemic, and the National Pork Producers Council (NPPC) says hog producers need more financial help to weather the storm.

The value of U.S. pigs has fallen dramatically since the beginning of the pandemic, according to Steve Meyer, an economist with Kerns & Associates, who spoke during an NPPC media call on July 20.

“If we look at what this year’s production was worth on March 1 … as far as what the futures market said the producers could expect on pricing through the end of 2020 and compare that to July 10, the difference is about US$4.7 billion,” he said. “Producers haven’t lost that much money yet, but relative to where they were going to be by the end of the year, they’re going to be US$4.7 billion short.”

In addition to the loss of hog value, many pork producers have been forced to euthanize or donate their pigs when processing plant capacity tightened.

“Producers have had to euthanize a number of animals – some market hogs back in April and May, a large number of young pigs – because they just don’t have space for them,” Meyer said. “Producers have done everything they can to avoid euthanizing pigs … and, in so doing, they have backed up supplies of pigs in their other barns on their farms all across the United States.”

NPPC President Howard “AV” Roth said some pork producers will not be able to survive this financial hardship.

“Without swift congressional action to address this dire situation, me and thousands of generational farm families could go out of business, forever changing the agriculture and economic landscape in our great country,” he said. “The impact of COVID-19 has caused hog values to plummet, creating a financial disaster for pork producers nationwide who face a collective US$5 billion loss this year. The past four months have taken a significant financial and emotional toll on pork producers and their families.”

NPPC has urged members of Congress to quickly finalize the RELIEF for Producers Act of 2020, which would provide compensation for farmers who are forced to euthanize or donate animals that can’t be processed into the food supply as a result of COVID-19, among other provisions.

Processing plants at 95% capacity

Meyer said that since May, when eight U.S. pork processing plants were closed and 40% of capacity was idle, the capacity “has come back dramatically.”

“They’ve made tremendous progress on that, but we’re still hovering around 5% of idle capacity,” he said, adding that plants may never get back to 100% capacity because of social distancing and spacing guidelines.

“We just can’t push the pigs through our plants as we once did and we think that that loss is, more or less, permanent,” he said.

With plants operating at 95% capacity and the number of pigs that are on-farm right now, Meyer predicted more pigs would need to be removed from the supply chain in order for packing plants to be able to handle the slaughter demand.