The “Meat the Need” program developed by the National Association of State Departments of Agriculture would establish a federally funded buying program to resolve the oversupply of dairy, pork and poultry industries.
On the pork side, the U.S. Department of Agriculture (USDA) would buy pork in 100-million-pound segments until a target of $0.49/lb. is reached in the pork market. Those purchases would be given to domestic food assistance programs.
However, would this plan work and provide a long-term benefit to the livestock industry?
Senators Bob Bennett of Utah and Kay Hagan of North Carolina and Rep. Larry Kissell of North Carolina requested an economic analysis from the Food and Agricultural Policy Research Institute (FAPRI) to find out.
FAPRI economists evaluated USDA purchases of 225 million pounds of cheese over four months, a one-time purchase of 25 million pounds of nonfat dry milk, the purchase of 300 million pounds of pork over six months and a one-time purchase of 100 million pounds of whole turkeys and turkey meat.
FAPRI economists say those purchases would raise the price for pork, turkey and dairy products. Pork prices would climb 8.2% as purchases of pork continue. Turkey would see a 9.2% price increase before prices fade over the next year. Milk prices would rise 9.4%.
However, those increases would only last through late 2009 and the first three quarters of 2010 when the various purchases are scheduled.
FAPRI says the proposal results in less than a 1% change in the supply of meat and dairy products.
“Purchasing products from the market will increase prices for these products in the short run. However, in the long run, these programs will have little to no effect,” FAPRI concludes.