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Culver asks Fed to aid pork industry

By Staff | Aug 17, 2009

Gov. Chet Culver is asking the federal government to take several key actions to help the nation’s struggling pork industry, including the purchase of an additional $50 million of pork products for government feeding programs.

DES MOINES – A struggling economy, high input costs and the late April outbreak of the H1N1 virus have created a perfect storm that’s devastating the U.S. pork industry, and Gov. Chet Culver is spearheading an effort to propose solutions that will help producers in Iowa and across the nation.

“I’m committed to a strong, rural economy,” said Culver, who has organized a letter-writing campaign in conjunction with governors in eight other pork-producing states to ask President Obama and the federal government for aid. “In 2008, pork producers suffered their second worst year ever, and we must do what we can to keep this industry viable.”

Pork producers have lost $4.5 billion in equity since September of 2007 – a decline of about half. “We’ve had tremendous loss of equity and little or no profit for months,” said Dave Moody, a pork producer from Nevada and immediate past president of the Iowa Pork Producers Association. “We know there is no simple or perfect solution, but we need to find solutions to bring back profitability to the pork industry.”

That’s why Culver, along with governors from Colorado, Michigan, North Carolina, Wisconsin, Illinois, Kentucky, Nebraska and Oklahoma, is asking the federal government to take three key actions, including:

1. Purchasing an additional $50 million of pork products for government feeding programs. “Buying pork for commodity distribution programs is a tremendous opportunity to offer high-quality protein at a reasonable price for those in need,” said Neil Dierks, chief operation officer of the National Pork Producers Council, who joined Culver on an Aug. 7 conference call.

2. Removing the spending cap on the government’s Section 32 program. This would allow the U.S. Department of Agriculture to buy more surplus agriculture products, including pork.

3. Opening markets abroad. While Russia has reopened most of its markets to U.S. pork in the wake of the H1N1 outbreak in late April, China has continued to deny U.S. imports. “I want to stress that H1N1 is not a foodborne illness, and you can’t get it from eating or handling pork,” Culver said. “I’ve had contact with Chinese officials about lifting the ban on U.S. pork, but I’ve had no luck to date.”

Bringing profitability back

Reopening the China market is a crucial issue for the U.S. pork industry, according to Steve Meyer, president of Paragon Economics in Adel. Through March of 2009, the United States had shipped 1.3 percent of its total pork production to China. “While this may not sound like a lot, it adds up to a great deal of product, especially pork variety meats,” Meyer said.

These are unprecedented times, added Meyer, who noted that 2009 held promise for an economic recovery in the pork industry until H1N1 broke in the spring. The disease impacted demand both at home and abroad at a time when the economy was already locked in a global recession. While Mexico, which is traditionally a leading U.S. pork importer, never stopped buying U.S. pork, demand dropped significantly due to fears of H1N1. The widely-publicized disease compounded the many financial challenges already facing average producers, who have lost about $21 for every animal marketed since September 2007. “Iowa producers can’t stand many more of these kinds of losses,” Meyer said.

Although U.S. pork producers are doing everything in their power to remain in business, their tremendous productivity gains in recent years have sometimes worked against them. “We’ve been reducing the sow herd by about two percent a year in the past few years, but this has been offset by genetic and management progress, along with control of the circovirus,” said Dierks, who noted that financial pressures are being felt throughout the livestock industry, from beef to dairy production.

Producers aren’t the only ones in the industry feeling the pain, said Joe Swedberg, vice president of legislative affairs and marketing services for Hormel Foods, who thanked Gov. Culver and the eight other governors for their efforts. “These leaders have proposed practical, effective steps to make sure this important industry continues to contribute to the rural economy.”

Culver said he plans to keep working with pork industry leaders and government officials to address this important issue. “I will continue to find solutions to help Iowa and our nation’s pork producers get through these tough economic times.”

Contact Darcy Dougherty Maulsby at yettergirl@yahoo.com.

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