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Dr. Ted Schroeder and Dr. James Mintert with Kansas State University recently completed an analysis of the impact on beef that the eight-point pork bailout plan proposed by the National Pork Producers Council would have. The first step in the plan asks USDA to purchase sows and market hogs in a program similar to the dairy herd buy-out where the pork would be donated internationally for humanitarian aid "Dumping pork on world markets would likely spur friction with other meat exporting countries that could encourage retaliatory trade practices," the economists said. Further, giving away pork internationally does not make it disappear from world markets. It simply displaces pork exports, resulting in depressed world pork prices. "The reduction in domestic pork prices will have a negative impact on retail beef prices. And reductions in retail beef prices will ultimately cause declines in wholesale, slaughter and feeder cattle markets." Another proposal asks for $600 million in direct cash payments to hog producers. This would encourage continued pork production. "Since pork is a direct substitute for beef, this proposal is expected to negatively affect beef and cattle prices." |
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