Edward Lotterman - Agricultural Economist
Published January 1, 1999 | January 1999 issue
Adjusted for inflation, in late 1998 hog prices broke through the previous record lows set in the spring of 1933. As in 1933, some farmers appealed to the government for relief and government took some action. In 1998 the U.S. government announced increased purchases of pork for use by the Armed Forces and for distribution to the needy through community food shelves. In early January, 1999, Vice President Al Gore also announced a $50 million program of direct disaster payments to hog producers.
In 1933 as in 1998-99, the most important cause of low prices was an excess of hogs. Farmers were simply producing more hogs than consumers were willing to buy at a price that would give them all profits. But rather than trying to increase demand as at present, the Roosevelt administration took more direct action. It killed baby pigs.
The action to reduce supply by killing some portion of the pigs born in the spring of the year made good sense as part of the administration's emergency efforts to raise prices and incomes for the rural poor. But even before the advent of People for the Ethical Treatment of Animals and other animal rights movements, it was a public relations disaster. In 1933 over one-third of US households had some member out of work and many people experienced hunger. Killing hogs to raise hog prices at such a time struck many as wrong-headed.
The administration's Agricultural Adjustment Act also provided for the plowing under of a significant portion of the cotton crop, which was already in the ground. But cotton seedlings are not as photogenic as piglets, as Hollywood well knows, and destroying cotton to raise prices never raised the same public outcry as that of killing baby pigs.
Participation in the program was voluntary, and farmers were paid for pigs that were killed. Most of the hogs killed were sent to packing plants that contracted with the government. Some 5 million light hogs, averaging 53 pounds, were simply "tanked" or processed into inedible meat and bone meal. Sows, which were required to be visibly pregnant for acceptance into the program, were processed into meat that was donated to various local food relief programs.
Historical records show that some 6.4 million pigs and sows were killed at an expenditure of $31 million. (Livestock Under the AAA, The Brookings Institution, 1935.) Using the Consumer Price Index, an equivalent amount today would be about $400 million in 1998 dollars. A history of the program concluded that "it is extremely difficult to estimate the effects of the measures on hog prices," but said that perhaps prices were increased by $1.75 per hundredweight, a 20 percent to 30 percent increase over what prices had been before it's inception. The slaughter program was never repeated, in part due to public outcry and because a system of contracting with farmers not to produce was implemented in succeeding years.