Statement About Possible Government Shutdown

April 8, 2011

Contact: Dave Warner 202-347-3600

In the event of a federal government shutdown, NPPC’s understanding is that U.S. Department of Agriculture Food Safety Inspection Service inspections at packing and processing facilities will continue. However, we also understand that the Market News Reporting Offices of USDA’s Agricultural Marketing Service will be closed and, thus, price reports will not be published.

Lack of reporting on market transactions in the pork industry may be problematic. In the short run, the hog and pork trades most likely will treat the situation similar to federal holidays when commerce continues. Should the situation persist for more than a few days, however, the lack of price reports will pose significant challenges to assigning values to pork and hogs traded under formula price arrangements. The difficulties become greater as a shutdown drags on. A particular concern next week will be the clearing of open positions in the April Chicago Mercantile Exchange Group Lean Hogs Futures contract, which expires Thursday, April 14. The CME Lean Hogs Index, which is used to clear any open positions at expiration, is based on price and volume data from USDA’s Daily Hog and Swine Report, one of the reports that will not be published if there’s a shutdown.

A rapid resolution of any shutdown of USDA AMS Market News is critical to avoid confusion in the pork industry.

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NPPC is the global voice for the U.S. pork industry, protecting the livelihoods of America’s pork producers, who abide by ethical principles in caring for their animals, in protecting the environment and public health and in providing safe, wholesome, nutritious pork products to consumers worldwide. For more information, visit www.nppc.org