Dear Secretary Vilsack,
We are requesting that USDA suspend all loans to specialized hog and poultry facilities. USDA is currently guaranteeing loans to new production facilities, which contribute to over-supply in an already saturated marketplace. At the same time, USDA is using taxpayer dollars for bonus pork and poultry buys in order to stabilize prices resulting from overproduction. (On March 31st, USDA committed to a $25 million bonus pork buy, and in May the industry asked for an additional $50 million pork buy.)
The use of USDA loan programs for new specialized hog and poultry facilities is an irresponsible use of taxpayer dollars.
When similar situations occurred in the past, USDA suspended the use of loan programs for the construction of these specialized facilities to ensure that the Agency did not continue to contribute to the overproduction situation.
In a January 8th, 1999 explanation of why USDA was suspending loans to specialized hog facilities, FSA says:
“It is inconsistent with USDA policies for FSA to continue to finance construction of additional production facilities through direct loans and loan guarantees while other agencies within USDA expend resources to ameliorate over-supply conditions.” -- Federal Register-January 1999
Continuing overproduction in both the hog and poultry industries are resulting in long-term depression of producer prices, closing of pork plants, cancelling of poultry contracts, integrator requests for government assistance and further concentration of markets. All the while, USDA continues to make loans that further exacerbate the problem.
For these reasons:
We call for USDA to suspend all direct or guaranteed farm ownership or operating loans for the construction or expansion of specialized hog or poultry production facilities. I hereby add my name: