USDA to take weeks to mull pork decision-official

WASHINGTON Thu Oct 22, 2009 1:02pm EDT

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WASHINGTON Oct 22 (Reuters) - It will take a month or two for the U.S. Agriculture Department to decide whether to buy more pork to prop up the money-losing hog industry, Deputy Agriculture Undersecretary Michael Scuse said on Thursday.

The National Pork Producers Council (NPPC) wants the government to buy at least $50 million of pork products to use for government food assistance programs.

Hog producers have lost, on average, nearly $23 for each hog marketed since September 2009, "and things look bleak going forward," said NPPC president Don Butler at House Agriculture subcommittee hearing.

Scuse told the subcommittee losses "are expected to moderate from now through 2010 as demand increases and hog supplies decline.

"The department continues to evaluate pork market conditions and, if justified, (USDA) will initiate additional surplus removal purchases this fiscal year," Scuse said.

USDA spent $164.6 million to buy 100 million lbs of pork during fiscal 2009, ending on Sept. 30, mostly for donation to food banks. It was double the total for fiscal 2008 and included a $30 million purchase announced on Sept. 3 to bolster hog prices.

Scuse told reporters "it could be in the next month, it could be within the next two months" when the USDA's Agricultural Marketing Service completes an analysis of proposals to buy more pork.

Up to $250 million is available in so-called Section 32 funds, raised by customs receipts, to assist unsubsidized U.S. farm products, such as pork.

During the subcommittee hearing, pork producers, industry experts and meatpacker Seaboard Foods, a part of Seaboard Corp (SEB.A), and industry experts said high feed costs were a leading reason for losses by hog farmers. They also cited the recession and loss of U.S. export markets due to the H1N1 flu scare. (Reporting by Charles Abbott; Editing by Marguerita Choy)

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