Editorial

Is it time for a pork industry bailout?

Tuesday, May 5, 2009

What's in a name?

If it's something called "swine flu," it's quite a lot, according to the U.S. pork industry.

According to Chris Hurt, ag economist at Purdue University, 25 to 33 percent of the nation's hog producers may have to take a serious look at whether to stay in the industry.

For the record, you can't get "swine flu" from pigs, despite radical actions in some countries that have gone as far as slaughtering entire herds.

It gets its name from the fact the virus contains genetic elements from swine -- as well as avian and human DNA. Why it isn't called "human flu" or "bird flu" -- another more potentially deadly flu that has yet to materialize -- is a difficult question.

But thanks to ignorance and fear, many stopped eating pork, reducing demand and adding to the troubles the pork industry already suffered.

Record grain prices last summer put the squeeze on pork producers, and, like every industry that depends on credit, pork producers suffered from the world financial crisis last fall.

Richard Ellinghuysen, vice president of the Producers Livestock, is calling for a pork industry bailout similar to the one received by the banking and car industries.

"I'll bet $15 per head per market hog sold by a producer during calendar year 2008 in the form of disaster aid would help out," he said. "Pork producers have been suffering from losses for the past 18 months and have been waiting and hoping for the seasonal upswing in the market now hope for an upturn has instead become a downturn, and not only are producers not 'healing,' they're getting sicker financially, and some will not survive.

Economist Dr. David Anderson of Texas AgriLife Extension Service provided insight into just how important the pork industry is.

* The U.S. had 67.22 million hogs and pigs on feed as of March 1.

* Approximately 116.5 million hogs were processed in the U.S. in 2008.

* 23.4 billion pounds of pork were produced in the U.S. in 2008.

* U.S. per capita consumption in 2008 was an estimated 46.5 pounds, retail weight.

* The U.S. is the world's largest pork exporter, with a 39 percent market share in 2008.

* In 2008, the largest export markets for U.S. pork were Japan, China, Mexico and Russia in 2008.

* The U.S. also exported the equivalent of 20 percent of production in 2008.

Faced with a current crisis not of its own, does the pork industry deserve a federal bailout?

Measuring by the standards applied to the banking and automobile industries, it becomes increasingly difficult to say no.

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