USDA buying $170 million of pork, lamb, chicken, catfish

The U.S. Department of Agriculture on Monday announced the purchase of $170 million of pork, lamb, chicken, catfish to help farmers, ranchers, small businesses and communities affected by the drought.

The purchased food will be used by federal food nutrition assistance programs, including food banks, and also help bring the nation's meat supply in line with demand.

"These purchases will assist pork, catfish, chicken and lamb producers who are currently struggling due to challenging market conditions and the high cost of feed resulting from the widespread drought,"  U.S. Agriculture Secretary Tom Vilsack said. "The purchases will help mitigate further downward prices, stabilize market conditions and provide high quality, nutritious food to recipients of USDA's nutrition programs."

The USDA will buy up t:

•  $100 million of pork products
•  $10 million of catfish products
•  $50 million in chicken products
•  $10 million of lamb products.

Through the Emergency Surplus Removal Program, USDA can use Section 32 funds to purchase meat and poultry products to assist farmers and ranchers who have been affected by natural disasters.

The pork, lamb and catfish purchases are based on analyses of current market conditions. A major factor affecting livestock producers is the value of hay, which is sharply higher because of the drought.

The hog market reacted to the news of the $100 million USDA pork purchase, raising the October contract price by $1.70 per hundredweight and by $1.37 per hundredweight for the December contract on the Chicago Board of Trade.

Hog prices have fallen by about 15 percent since the end of 2011 as record production of hogs has threatened to oversupply the market.