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USDA offers help for pork producers who were forced to sell on 'spot market' during COVID pandemic

The Spot Market Hog Pandemic Program should help "the smaller end of the hog producer spectrum," Farm Service Agency Administrator Zach Ducheneaux said.

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A Tyson Foods pork processing plant, temporarily closed due to an outbreak of the coronavirus disease (COVID-19), is seen in Waterloo, Iowa, U.S. April 29, 2020. Brenna Norman / Reuters

WASHINGTON — The shutdown of processing facilities early in the COVID-19 pandemic sent a shock to the system of the hog industry, prompting some farmers to sell animals at reduced prices wherever they could find a buyer.

A new "spot market" program through the U.S. Department of Agriculture will pay $54 a head to producers who sold hogs through a negotiated sale during that time, from April 16, 2020, through Sept. 1, 2020.

This is a program that should help "the smaller end of the hog producer spectrum," Farm Service Agency Administrator Zach Ducheneaux said in an interview.

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Zach Ducheneaux is administrator of Farm Service Agency. Michelle Rook / Agweek

FSA announced the Spot Market Hog Pandemic Program, or SMHPP, on Monday, Dec. 13. It will be taking applications Dec. 15, 2021, through Feb. 25, 2022.

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"That should be plenty of time for a producer to compile their records," Ducheneaux said, noting that there are several ways for a producer to verify their sales.

Producers can contact their local FSA office or check out farmers.gov/smhpp for more details. He noted that some FSA offices are still operating with limited in-person availability because of the pandemic, so farmers should call ahead and in some cases may need to drop off records at their FSA office.

The Farm Service Agency has set aside up to $50 million for the spot market program. The money comes from the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act.

Ducheneaux said another important aspect is that the FSA will issue payments as applications are received and approved, rather than waiting for the end of the application period to begin approval. The application form will be known as FSA-940.

FSA has put a 10,000 hog limit on the overall program, but there is no limit per hog producer at this time.

Midwest hog processing plants grabbed headlines early on in the pandemic as coronavirus infections swept through plants, like the Smithfield plant in Sioux Falls, South Dakota, forcing plants to temporarily shut down and leaving many producers scrambling to find a place to market their hogs .

Ducheneaux, whose family ranches on the Cheyenne River Sioux Reservation in South Dakota, lamented how hogs had to be euthanized in one part of the country while there were food shortages in others.

"It's astonishing to contemplate the fragility of that food industry," he said.

Reach Jeff Beach at jbeach@agweek.com or call 701-451-5651 (work) or 859-420-1177.
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