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Federal funds not much help for area hog farmers

April 15, 1999|By JULIE E. GREENE

WAYNESBORO, Pa. - Max Hade recently received almost $2,000 as part of a federal aid program to help struggling hog farmers.

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Hade is grateful for the help, but he's a long way from turning the Clay Hill Road farm around.

"It's better than nothing," said Hade, who says he'll know by the end of the year whether he'll stay in the business or not.

Hade lost at least $50,000 in the last year during some severe drops in hog prices. The federal aid will cover his electric bill for a few months. Electricity costs him about $400 a month because he uses electric heat lamps to keep baby pigs warm.

Hade is one of 79 hog farmers in the Tri-State area who received financial assistance from the U.S. Department of Agriculture's Small Hog Operation Payment, also known as SHOP. Tri-State area farmers received approximately $35,726 at the end of March.

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Vice President Al Gore announced in early January that $50 million would be given to struggling independent hog farmers.

On Friday, the agriculture department announced a similar program for dairy farmers who saw milk prices drop significantly last year and again in March.

The price per hundredweight of milk is $12 to $13, but the break-even point for the average farmer is $16, said Colleen Cashell, Washington County Farm Service Agency executive director.

Dairy farmers who produced milk during the last quarter of 1998 have until May 21 to apply for the aid through local Farm Service Agency offices. Eligible farms can get up to $5,000 each from the $200 million available nationwide.

The final payment rate per hundredweight of milk won't be calculated until all applications are received, but it is estimated it will be between 18 cents and 20 cents per hundredweight.

Approximately 1,015 dairy farms in the Tri-State area depend on the milk price set by a federal formula that can fluctuate wildly from month to month.

Maryland dairy farmers are waiting for Pennsylvania lawmakers to approve joining the Northeast Dairy Compact so Maryland farmers can join and enjoy stable milk prices.

The major reasons farmers have given for low hog prices are the depressed Asian economy, the closing of three major slaughterhouses and the flood of hogs into the United States from Canada.

Some members of Congress have talked about including more aid for hog farmers in the supplemental budget, but nothing has been approved, said Andy Solomon, spokesman for the U.S. Department of Agriculture.

The $5,310 distributed to 39 hog farmers in Frederick County, Md., "was kind of a slap in the face," said Laura Schlote, county executive director for the Farm Service Agency.

That's up to $1.80 per feeder pig and $5 per slaughter hog when farmers are losing $40 to $50 a hog, Tri-State area Farm Service Agency officials said. Each hog farm could receive a maximum of $2,500.

Not all struggling hog farmers were eligible for SHOP.

Of the $160,000 hole Mike Cushwa said he ended up in by the end of 1998, about $100,000 was attributable to low hog prices.

Cushwa was ineligible for SHOP because he sold more than 1,000 sows from his farm near Hedgesville, W.Va., during the last six months of 1998.

"We're still losing. I thought I had enough money to carry me into June, but it doesn't look like it now," Cushwa said.

Cushwa said the sow herd he bought in October 1997 for $85,000 is now worth $30,000, maybe.

Hog prices were inching up to 31 cents, but Cushwa said his break-even point is 40 cents.

The price had been as low as 4 cents a pound since November 1997 when hog prices began dropping.

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