Spot Market Hog Assistance
This assistance is only for hog producers who sold pigs on the spot market and not under a contract. The payment will be equal to $54 per pig times the number of eligible pigs not to exceed 10,000 pigs. Therefore, the maximum payment will be $540,000. The good news is that there is no per person or per entity payment limit. However, the normal $900,000 average AGI limit does apply to both the entity and each owner in the entity.
The application period begins December 15 and ends February 25, 2022.
The producer must of have owned the pigs and not been a contract grower and sold the hogs through a negotiated sale contract during that period. Contract producers, packers, and hog purchase types including other market formula, swine or pork market formula, other purchase arrangements, and packer owned are not eligible for SMHPP.
Breeding stock is also not eligible.
These payments are taxable income and can’t be deferred to 2023 if received in 2022. A Form CCC-1099-G will be issued by USDA reporting the amount of payments received under this program.
USDA may require to you to provide supporting documents such as negotiated sales agreement, veterinarian records, feeding records, inventory records, etc. to back up your claim.
USDA is still “mulling” whether to provide an additional top-up payment for all hog producers. We will keep you posted on this topic.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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