USDA Continues Moratorium on Hog Building Loans

October 27, 1999

USDA is continuing a moratorium on loans for building new or expanding existing hog-raising facilities. To lift the moratorium would mean contributing to the current oversupply of hogs, says Farm Service Agency Administrator Keith Kelly.

"We don't like the idea of making assistance unavailable for any purpose," said Kelly. "However, we cannot justify adding to the current oversupply of hogs in today's market. Farmers are going out of business because of it, and other USDA programs are expending resources to fight it."

The moratorium was implemented Jan. 8 to address low prices and overproduction in the pork industry. Due to the Asian financial collapse and other factors, pork prices declined to catastrophically low levels last year, financially hurting many hog producers. Prices have rebounded since then but only to break-even levels; the most recent USDA market analysis projects prices to remain low for the next 18 months.

FSA will continue to make and guarantee loans for routine production and other recurring expenses for hog producers. No date has been set for lifting the moratorium.

"I want to emphasize that this moratorium applies only to loans for building new hog production capacity," Kelly said. "Operating loans and loans to repair existing facilities are not affected. Our overriding goal, as always, is to help and preserve America's family farms."