USDA issues payments for hog pandemic program

SPRINGFIELD — The U.S. Department of Agriculture (USDA) is increasing the amount of funding available for the Spot Market Hog Pandemic Program (SMHPP). They expect to issue approximately $62.8 million in pandemic assistance payments to hog producers starting this week. SMHPP assists eligible producers who sold hogs through a spot market sale between April 16 and September 1 of 2020. USDA’s Farm Service Agency (FSA) was accepting SMHPP applications earlier this year, with the deadline being April 29, 2022. “In order to provide more targeted support to hog producers affected by the pandemic, FSA was able to increase funding for SMHPP to provide full payments to producers instead of applying a payment factor,” said FSA Administrator Zach Ducheneaux. “We are pleased to be able to provide more equitable opportunities for hog producers who were hard-hit by the pandemic.”

Calculation of SMHPP payments

SMHPP payment calculation determinations are done by multiplying the number of head of eligible hogs by the payment rate of $54 per head. There is a limitation of 10,000 head. FSA originally planned to apply a payment factor if calculated payments exceeded the allocated $50 million in funds for SMHPP.  There are currently no expectations for payment calculation factoring due to Agriculture Secretary Tom Vilsack’s decision to increase funding enabling producers to receive 100% of the SMHPP payment. There is no per person or legal entity payment limitation on SMHPP payments.

SMHPP background

USDA offered SMHPP in response to a reduction in packer production due to the COVID-19 pandemic. This would result in the procurement of fewer hogs and subsequent lower market prices. The program is part of USDA’s broader Pandemic Assistance for Producers initiative. The initiative addresses gaps in previous assistance for hog producers.