The Department of Justice (DOJ) told a hog farmers’ association, the National Pork Producers Council (NPPC), in a letter that it will not challenge their proposal to euthanize surplus hogs resulting from the COVID-19 pandemic. The Department of Agriculture will work with hog farmers and the National Pork Producers Council to euthanize unmarketable hogs.
“Today’s letter addresses some of the challenges created for farmers when packing capacity shuts down,” said Assistant Attorney General Makan Delrahim. “Meanwhile, we remain committed to vigorous enforcement of the antitrust laws to ensure that farmers and consumers see the benefits of competition.”
Although the DOJ said they would not challenge cooperation between government agencies and the private sector in this instance because it “appears procompetitive,” they stressed that during the COVID-19 pandemic competition in the pork industry and other industries is a top priority.
The DOJ specified that the letter specifies its current intention, and reflects an expedited review which should only relate to the specific decision. “In accordance with our normal practices, the Department reserves the right to bring an enforcement action in the future if the actual operation of the proposed conduct proves to be anticompetitive in purpose or effect,” the letter says.
White & Case, legal representatives for NPPC, wrote a letter to Delrahim on May 8 asking for a response addressing the situation. “NPPC wishes to confirm that its efforts to keep pork products available for America’s tables and to facilitate the orderly euthanization of hogs for which there is no market do not violate the antitrust laws. Due to the crisis that hog farmers face in this rapidly changing environment, NPPC respectfully requests that the Antitrust Division issue a favorable response on an expedited basis,” the letter states.
The NPPC represents 60,000 hog farmers in the U.S. pork industry. The letter explains the toll of COVID-19 on pork farmers and pork packing companies. Pork packing companies are “exercising the force majeure clauses in their contracts with hog farmers,” and taking less pork than they had previously agreed. Hog farmers are expected to lose almost $5 billion as a result of the pandemic. The letter says that on April 29 about 44 percent of pork processing capacity was not operating. They also cited that the “price for hogs has crashed,” and said it is projected to stay below average throughout the year.
The letter to the DOJ states, “due to severe capacity restrictions at pork packing plants, NPPC, USDA, and industry analysts understand that the need to euthanize a large number (approximately 700,000 per week) of hogs will be unavoidable.”
Hog farmers generally do not have the equipment or expertise to euthanize hogs, so cooperation is needed according to the NPPC, asking for a coordinated approach. “The prospect of hog farmers across the country being forced to euthanize thousands of unmarketable hogs poses numerous challenges that will require an urgent response from all levels of government and the industry itself if this crisis is to be handled responsibly,” the letter states.
The issue has been discussed in the government, Members of Congress recently wrote to President Trump asking for guidance regarding the excess animal population due to shutdowns or slowdowns in the meatpacking industry.
