Tuesday, August 14, 2012

USDA announces $170M-program to "help" some livestock sellers

In the face of this summer’s withering weather, the US Department of Agriculture Monday gave what farmers like Tentinger saw as a modest show of support, offering to buy up $170 million worth of meat products between now and Sept. 31. Livestock farmers have been squeezed hard this year, forced to pay dramatically higher prices for feed, which consumes much of the American corn crop. Prices for meat have risen, too, but not as fast as the cost of feed. The USDA says the buy-up will help support the price of meat even as farmers who raise hogs, chicken, sheep, and even catfish, cut back their flocks, herds, and stocks to save money on feed. The meat will go to government food programs, such as school lunches and food banks. The program excludes farmers who raise beef cattle. Although they, too, have been selling off animals to reduce costs, the USDA says the selling off will likely end soon...more

---The government pays 417,000 farmers to not farm on 30 million acres, lessening the supply of all grains

---Government incentives result in 40% of the corn crop going into ethanol, further lessening the supply of feed grain

---These two government supply-restricting programs result in huge increases in the price of feed grains, putting livestock producers in a bind

So, do the DC Deep Thinkers get rid of the programs that are a major contributor to the problem?

Nope.  They use another government program to restrict the supply of livestock.  This is a great example of how one government intervention in the market place creates a problem, resulting in another government program to "solve" that problem, which creates another problem ad infinitum.  The government grows and grows and we all suffer from the results.

1 comment:

Lewis said...