As drought spurs livestock selloff, USDA will buy meat

mquillin@newsobserver.comAugust 13, 2012 

The U.S. Department of Agriculture will buy up to $100 million worth of pork, up to $50 million worth of chicken and up to $10 million each worth of lamb and catfish to help producers who are struggling because of the Midwestern drought, the White House announced Monday.

It’s not clear how much of the additional meat purchases would come from North Carolina, the nation’s second-largest producer of pork, and of poultry and eggs. The purchases are expected to take place by the end of the fiscal year on Sept. 30.

The purchases will help the meat and catfish markets from being flooded if growers – facing a scarcity of feed and sharply rising feed prices – decide to sell off or cut back their livestock.

Response to the announcement was mixed, with some growers saying it could be helpful and others writing anonymously in online forums that it was a political ploy that will only drive up prices for consumers. Many said the government could help livestock producers far more by temporarily reducing the federal ethanol-production mandate. The mandate uses about 40 percent of the nation’s corn crop each year.

Livestock producers in North Carolina and across the country are facing record-high feed prices because of the drought, which has hammered corn and soybeans, the two biggest components of animal feed. Low yields on the crops now in the field mean that feed could be scarce for the next year.

To prepare, producers have taken steps to reduce the number of animals they’ll raise, and some are feeding their animals less.

Under these conditions, “We certainly appreciate anything we can get,” said Bob Ivey, a hog farmer and the general manager of Maxwell Foods, the pork-production side of Goldsboro Milling Co. “I think this will help some in the short run, but what we really need is to change the ethanol mandate.”

The meat purchases announced Monday would be used in federal nutrition assistance programs, which supply school breakfasts and lunches and food banks, and distribute food on Indian reservations and to disaster victims, among other things.

The White House said the plan demonstrates “the Obama Administration’s commitment to do everything it can to help farmers, ranchers, small businesses and communities being impacted by the nation’s persistent drought.” In recent weeks, the USDA also has opened some conservation lands to emergency haying and grazing, and lowered the interest rate for emergency loans.

Members of Congress from livestock-producing states, including North Carolina, have asked EPA Administrator Lisa Jackson to consider lowering the requirement on how much ethanol must be produced as a gasoline additive.

Bob Ford, executive director of the N.C. Poultry Federation, said North Carolina poultry farmers welcome the federal support, but it is unclear how much local farmers or national operations will benefit.

“Is that $50 million worth of thighs, legs, breast meat, or what? We don’t know. They’re just going to buy that amount of product from somebody, and that’s good. But we don’t have any way of knowing where it’ll come from,” he said.

Typically, Ford said, the government will send out a notice of what it wants to purchase and accept bids from producers. About 40 companies handle about 95 percent of the nation’s poultry production, Ford said, and many of them operate in the state.

Quillin: 919-829-8989

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service