USDA Spot Market Hog Pandemic Program

Do you raise hogs that were sold through a negotiated, or negotiated formula, sale? You may be eligible for assistance for hogs sold through a negotiated sale from April 16, 2020, through September 1, 2020, through USDA’s Spot Market Hog Pandemic Program (SMHPP). This new program is part of USDA’s Pandemic Assistance for Producers initiative, according to Norman & Clay County FSA Executive Director James Kruize.

Packer production was reduced due to the coronavirus pandemic, resulting in fewer negotiated hogs being procured and lower market prices. USDA has allocated up to $50 million in pandemic assistance funds for SMHPP and other related pandemic assistance.

Negotiated sale, or negotiated formula sale, means a sale by a producer of hogs – excluding breeding stock – to a packer under which the base price for the hogs is determined by seller-buyer interaction and agreement on a delivery day.

USDA will calculate SMHPP payments by multiplying the number of head of eligible hogs, not to exceed 10,000 head, by the payment rate of $54 per head.

To be eligible for SMHPP, an applicant must:

• Be a person or legal entity who has ownership in the hogs and whose production facilities are located in the United States, including U.S. territories.
• Have an average adjusted gross income (AGI) of less than $900,000 for tax years 2016, 2017, and 2018. 
• Comply with provisions of the “Highly Erodible Land and Wetland Conservation” regulations, often called the conservation compliance provisions. These will be addressed via form AD-1026 during the application process.
• Not have a controlled substance violation.
• Be a citizen of the United States or a resident alien.

Contact your local FSA or visit www.farmers.gov for more information.

Listen to the full interview with James Kruize from the KRJB Kaleidoscope Program below: