The purchase of as much as $100 million of pork, $50 million of chicken, and $10 million each of lamb and catfish come on top of $30 million in assistance announced last week. Farmers and ranchers are struggling with the worst combination of heat and dryness since the 1950s, the administration said.
Obama said he also directed the Defense Department to speed up purchases and hold the meat for later use. The buying will help farmers, and the government will get a better price on products than if they were bought later, he said.
“We’ll freeze it for later — but we’ve got a lot of freezers,” Obama told supporters in Council Bluffs as he kicked off a three-day visit to Iowa, a swing state that is also the country’s leading producer of pork, soybeans, corn and ethanol. “That will help ranchers, you know, who are going through tough times right now.”
More than half the counties in the U.S. have been declared natural disaster areas by the Department of Agriculture, and 69 percent of the Midwest last week had moderate to exceptional drought, government data show. The price of corn, the main ingredient in livestock feed, has surged 57 percent since mid- June, reaching an all-time high of $8.49 a bushel on Aug. 10 on the Chicago Board of Trade.
Cattle prices are falling as producers slaughter more animals to avoid the higher feed costs, Cody Jensen, 32, who has a 120 head cow-calf operation in Plainfield, Iowa, said in a telephone interview. Jensen said he’s slaughtering a few more cattle than normal to avoid the rising feed costs.
As producers are “putting more and more live animals to kill, that is putting more meat on the table, which is driving the price down,” Jensen said in a telephone interview.
Livestock producers may be at greater economic risk from the drought than growers of grains and oilseeds because they receive less federal support, said Bill Lapp, a former chief economist for ConAgra Foods Inc. For cattle, the drought may further thin a national herd that at the start of the year was the smallest since 1952, as meatpackers including Tyson Foods Inc. and Cargill Inc. boost short-term slaughter, he said.
Later, as he visited a farm in Missouri Valley, Iowa, Obama called for Congress to pass a five-year agriculture policy bill that the White House said would “provide short-term relief and long-term certainty” to farmers and ranchers.
“The best way to help these states is for Congress to act,” Obama said.
A livestock-assistance program in the current farm bill expired last year. The U.S. Senate and the House Agriculture Committee have approved bills to replace the current law which contain livestock relief provisions. House Republican leaders have not set a vote on their legislation. The House on Aug. 2 approved a $383 million stopgap measure to reinstate the livestock aid, while the Senate took no action. The current farm bill was passed in 2008 and expires in September.
The pork purchase will be a “small shot in the arm to help us through a real trying situation here,” said Bill Tentinger, 63, who markets about 10,000 hogs a year from his farm near Le Mars in northwest Iowa.
“With a purchase like that, I can’t help but think it’s going to help us through somewhat,” said Tentinger, who said he’s been considering liquidating his herd because of high feed costs.
In a statement, R.C. Hunt, the president of the National Pork Producers Council, echoed Tentinger’s remarks, adding that the group “will continue to work with the USDA to help pork producers through this current crisis.”