The U.S. Department of Agriculture (USDA) announced today that it will begin issuing long-awaited pandemic assistance payments to hog producers this week. The agency also increased the amount of funding available for the Spot Market Hog Pandemic Program (SMHPP) to approximately $62.8 million.
USDA offered SMHPP in response to a reduction in packer production due to the COVID-19 pandemic, which resulted in fewer negotiated hogs being procured and subsequent lower market prices. The funding assists eligible producers who sold hogs through a spot market sale from April 16, 2020, through Sept. 1, 2020. USDA’s Farm Service Agency (FSA) accepted SMHPP applications through April 29, 2022.
“In order to provide more targeted support to hog producers affected by the pandemic, FSA was able to increase funding for SMHPP to provide full payments to producers instead of applying a payment factor,” said FSA Administrator Zach Ducheneaux. “We are pleased to be able to provide more equitable opportunities for hog producers who were hard-hit by the pandemic.”
SMHPP payments will be calculated by multiplying the number of head of eligible hogs, not to exceed 10,000 head, by the payment rate of $54 per head.
FSA originally planned to apply a payment factor if calculated payments exceeded the allocated $50 million in pandemic assistance funds for SMHPP. Payments are not expected to be factored due to Agriculture Secretary Tom Vilsack’s decision to increase funding enabling producers to receive 100% of the calculated SMHPP payment.
Terry Wolters, NPPC president and owner of Stoney Creek Farms in Pipestone, Minnesota, commented, “We appreciate FSA’s commitment to providing assistance to those pork producers hit hard by the economic disruptions caused by the pandemic. Producers forced into spot market hog sales are still challenged by the market disruptions of COVID-19, and these funds will contribute to the ongoing recovery of the U.S. pork industry.”
USDA's announcement comes one week after U.S. Representative Randy Feenstra, R-Iowa, sent a letter to Secretary of Agriculture Tom Vilsack demanding answers over “significant” payment delays for hog producers through the SMHPP.
“When the SMHPP program was first announced, producers were told they would be getting a single payment rate of $54 per head. Many producers in my district and the country planned their budgets with this number in mind. Now they are being told that the amount per head is not yet known and that they must wait for a payment factor to be determined,” Rep. Feenstra wrote in the letter
He continued, “This process has been unclear from the beginning – from having to submit additional supporting documents after the hog eligibility was clarified, to producers being left in the dark regarding the timeline of this program, it is long past-due for producers to be given answers.”