USDA updates rules for Spot Market Hog Pandemic Program
The Agriculture Department on Thursday clarified the definition of a spot market sale and hog eligibility under the Spot Market Hog Pandemic Program (SMHPP), which assists producers who sold hogs through a spot market sale during the COVID-19 pandemic from April 16 through Sept. 1, 2020.
Hog producers will also now be required to submit documentation to support information provided on their SMHPP application.
USDA’s Farm Service Agency (FSA) will accept applications through April 29, 2022, which is an extension of the April 15, 2022, deadline previously set for the program.
“When the pandemic disrupted normal marketing channels, including access to packers, producers sold their hogs through cash sales to local processors or butchers, direct sales to individuals and third-party intermediaries, including sale barns or brokers,” USDA said.
“The use of third-party intermediaries was the only available marketing alternative for many producers and are now included in SMHPP. The only direct to packer sales that are eligible for SMHPP are those through a negotiated sale. Hogs sold through a contract that includes a premium above the spot-market price or other formula such as the wholesale cut-out price remain ineligible. Hogs must be suitable and intended for slaughter to be eligible. Immature swine (pigs) are ineligible.
“FSA will now require documentation to support the accuracy of information provided on the FSA-940 Spot Market Hog Pandemic Program application, including the number of hogs reported on the application that were sold through a spot market sale and how the price was determined for the sale.
“SMHPP payments will be calculated by multiplying the number of head of eligible hogs, not to exceed 10,000 head, by the payment rate of $54 per head. To ensure SMHPP funding availability is disbursed equitably to all eligible producers, FSA will now issue payments after the application period ends. If calculated payments exceed the amount of available funding, payments will be factored,” USDA said.
National Pork Producers Council President Terry Wolters said, “The changes to SMHPP are certainly welcome and producers thank FSA for its commitment to clarifying the parameters of the program.”
“Producers forced into spot market sales have been excluded from many of the previous recovery programs, and these modifications will hopefully lead to these funds making it into the right hands.”
–The Hagstrom Report
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