January 5, 1999 | By: Ellen Brightwell

The vast majority of Kentucky pork producers should qualify for a federal payment program to help them weather the economic crisis in the industry. The U.S. Department of Agriculture will make about $50 million available to aid U.S. small hog operations devastated by near record low market prices.

Producers who sold fewer than 1,000 hogs the last half of 1998 and are still in business will be eligible for direct payments of up to five dollars for each slaughter-weight hog or the equivalent for feeder pigs and other swine. Depending on the number signing up for these payments, producers could be paid for up to 500 animals marketed, so $2,500 would be the maximum payment for any operation, according to Richard Coffey, Extension swine specialist with the University of Kentucky College of Agriculture.

Producers who sold hogs under fixed-price or cost-plus contracts won't be eligible for the payments. Also payments will not be made to any operation whose 1998 gross income exceeded two and one half million dollars.

"About 90 percent of Kentucky's pork producers have small operations and should meet eligibility requirements for the direct payments," said Lee Meyer, Extension livestock marketing specialist. "Kentucky's producers could receive an estimated one and a quarter million dollars from this program."

"The hog producer payment program is a good first step, but additional help is needed because all our pork producers have suffered tremendous losses," Coffey added.

To avoid distortion of current hog sales, program eligibility is based on marketings made

the last six months of 1998. This six-month period accommodates the sales practices of small producers who might not market hogs every week or month.

The direct payments will be made through Farm Service Agency (FSA) local offices. Pork producers will sign up for the program February 1 through 12 at local FSA offices. Payments likely will be made two to three weeks after the sign-up program ends.

When signing the application form at the FSA office, producers must certify that they meet program eligibility requirements. The form likely will require the name of the operation and a list of people involved in it, the number of finished and feeder pigs sold during the last six months of 1998, and buyers of those hogs and pigs sold. This form also is expected to include statements for producers to affirm that they are still in business, did not market hogs under fixed-price or cost-plus contracts and are aware the USDA might conduct spot checks to verify eligibility.

The direct payments will be made under Section 32, which the USDA typically uses to buy surplus commodities to distribute through federal food assistance programs. This section also allows direct payments to help farmers reestablish their purchasing power.

Contact: 

Writer: Ellen Brightwell
(606) 257-1376

Sources: Lee Meyer
(606) 257-7276

Richard Coffey
(502) 365-7541, Ext. 244