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Falling hog weights suggest the hog industry is managing supply-chain disruptions from COVID-19

Monday, August 3, 2020

Falling slaughter weights of hogs suggest that the U.S. hog industry is managing the supply-chain consequences of COVID-19, with weights falling almost 4 percent since their peak during the week of May 15, 2020 (calendar week 20). Due to the pandemic’s spread to workers at pork processing facilities, slaughter schedules were postponed and/or reduced, causing market-ready animal back-ups in the tightly sequenced—but usually-smooth—operating process. There are indications that many producers have raised the ceilings on stocking rates of production buildings, meaning that more animals are stocked in barns than was the pre-COVID practice. Additionally, many animals have reportedly been placed on maintenance rations, diets relatively low in protein, which tends to slow weight gain. This is critical because conventional slaughter plants often experience safety and technical difficulties processing hogs weighing more than 300 pounds. These measures, together with higher summer temperatures—which tend to decrease swine appetites—and rebounding processing capacity utilization, have contributed to reducing the weekly average slaughter weights of federally inspected hogs from their May 15 peak. This chart is drawn from the Economic Research Service’s Livestock, Dairy, and Poultry Outlook from July 2020.

The number of hogs sold or removed per farm increased from 1998 to 2015

Friday, July 31, 2020

Contract operations (where the hog owner pays a per-unit fee to producers to care for the animals) sold or removed an average of 8,625 hogs per farm in 2015, an increase of about 3,500 from 1998. By comparison, non-contract operations (where producers own the hogs they raise) sold or removed an average of 5,217 hogs per farm in 2015, an increase of about 3,700 from 1998. The removal, or depopulation, of hogs from farms has distinctly different effects on contract operations and non-contract operations. Contract operations do not incur lost value from inputs invested in depopulated herds, whereas non-contract operations stand to bear depopulation and disposal costs as well as the entire costs of foregone hog sales, including costs associated with inputs (such as feed costs) that have already been incurred. While this research predates the COVID-19 pandemic, it can provide insight into potential impacts of depopulation due to the closing of processing hog plants during the COVID-19 pandemic. This chart updates data found in the Economic Research Service report, U.S. Hog Production From 1992 to 2009: Technology, Restructuring, and Productivity Growth, released October 2013.

U.S. pork processing capacity utilization rebounds as COVID-19 infections of plant labor forces recede

Wednesday, June 24, 2020

Capacity utilization in the U.S. pork processing industry is on the rebound as workers in plants, earlier infected by COVID-19, recover and return to work. Defined as the extent to which a processing plant uses its installed productive capacity, capacity utilization in the U.S. pork sector was operating at or near full capacity at the beginning of April. Starting on April 6 with the temporary closure of a major plant in Iowa, virus-related labor force absences and necessary plant deep-cleaning have caused a succession of plant slow-downs and temporary closures. However, since April 29, when capacity utilization bottomed-out at 53.9 percent with a daily production of 60.4 million pounds, capacity has averaged 78.5 percent, with daily production averaging about 86 million pounds. For the balance of 2020 and into 2021, processing sector guidances issued by the Centers for Disease Control and Prevention and the Occupational Safety and Health Administration are likely to hold capacity utilization to below pre-pandemic levels. Pork production for 2020 is forecast at about 27.8 billion pounds, less than 1 percent above 2019 production. In 2021, commercial pork production is expected to accelerate, with total pork production forecast at about 28.2 billion pounds, 1.7 percent above forecast production in 2020. Hog prices are likely to continue to lag processing industry recovery rates, reflecting back-ups of slaughter-ready animals on hog farms. Prices are expected to average $42.40 per hundredweight (cwt), almost 12 percent below average prices for 2019. Higher hog prices are expected for most of 2021, with prices for the year expected to average $46.75 per cwt, more than 10 percent above prices forecast for this year. This chart is drawn from the Economic Research Service’s June 2020 Livestock, Dairy, and Poultry Outlook.

Growth in pork sales to China led record U.S. pork exports in first quarter 2020

Thursday, June 4, 2020

Errata: On June 4, 2020, the Chart of Note on growth in pork sales to China was reposted to correct a unit error in the text. U.S. pork exports during first quarter 2020 were corrected to 2 billion pounds. Pork sales to China, including Hong Kong, were corrected to 597 million pounds. The original graph was accurate.

Significantly larger pork sales to China boosted U.S. pork exports during first-quarter 2020 to a record-high volume of over 2 billion pounds. Sales to China (including Hong Kong) were a record 597 million pounds, up nearly fivefold, and more than 50 percent above earlier quarterly highs in 2008 and 2011. China/Hong Kong sales outpaced growth in pork exports to other top markets, which include Mexico, Japan, and Canada. China/Hong Kong was the top export market, accounting for almost 30 percent of first-quarter U.S. pork exports. The export boom is driven by a shortfall in China’s pork output, following an African swine fever (ASF) epidemic that shrank China’s swine herds by 40 percent or more during 2018-19. China’s COVID-19 lockdown, from January through March 2020, further constrained supplies. According to official Chinese data, the country’s first-quarter 2020 pork output was down almost 30 percent from a year earlier—a 9.3-billion-pound decline—and consumer prices for pork were up more than 122 percent. Robust sales to China are expected to continue. According to official statistics for March 2020, China’s swine herd was still more than 29 percent smaller than before the epidemic. Even if China avoids new ASF outbreaks and succeeds in rebuilding production capacity, biological lags in sow gestation and growth of finished hogs will delay China’s restoration of domestic pork supplies until 2021 or later. Exemptions to punitive tariffs imposed on U.S. pork were granted beginning in March 2020, giving a further boost to Chinese purchases. This chart was drawn from the Economic Research Service’s May 2020 Livestock, Dairy and Poultry Outlook report. The topic is also discussed in the February 2020 Amber Waves article, "African Swine Fever Shrinks Pork Production in China, Swells Demand for Imported Pork."

Hog prices fall sharply in April as slaughter capacity is constrained due to COVID-19

Wednesday, May 6, 2020

Closures and production slowdowns of several hog-processing facilities beginning in early April due to workforce absences caused by the COVID-19 virus decreased processor demand for hogs, reducing weekly hog slaughter numbers and driving April hog prices (prices paid to hog producers by processors) more than 35 percent below prices in April 2019. As of late April, the closures comprised more than a third of the industry’s processing capacity. At the time of the first plant closing, pork demand was already low, as much of the hotel, restaurant, and institutional sector had been shut down to block transmission of the virus. In 2020, between the weeks ending March 27 and April 24 (weeks 13 and 17 of the calendar year), prices fell $13 per hundredweight (cwt) as plants took measures to protect processing-plant workers from COVID-19, reducing the rates at which hogs were slaughtered. For the week ending April 24 (week 17), live hog prices averaged about $34 per cwt, the second lowest weekly price since November 2016, and significantly below most hog producers’ break-even price. Average prices for the week ending April 24 moved about 5 percent higher from the previous week, likely attributable to rapidly increasing wholesale pork prices (prices received by processors for sales of pork cuts), to which many hog sales transactions are linked. This chart is drawn from ERS’s Livestock, Dairy, and Poultry Monthly Outlook report from April 2020 and is updated using data from USDA’s Agricultural Marketing Service.

U.S. hog industry establishes a new, higher level in litter rates in 2019

Monday, February 24, 2020

The USDA Quarterly Hogs and Pigs report issued on December 23, 2019 indicated that the U.S. hog industry achieved a third consecutive quarterly litter rate of 11 or more pigs per litter. National litter rates of 11 pigs per litter or more have been a long-standing goal of the U.S. hog industry, although such litter rates have been commonplace in Canada (particularly in Manitoba) and in Europe for quite some time. Factors contributing to the 11+ litter rates in the United States last year—the September-November litter rate of 11.09, the June-August litter rate of 11.11, and the March-May rate of 11 pigs per litter—are varied; they include innovations in pre- and postnatal sow and weanling management and care, sow nutrition, weather adaptations, and management of disease occurrences. Chief among litter-rate enhancement factors, however, are improvements in genetics. Superior litter rates in 2019 likely indicate that distribution and optimal utilization of high-quality genetics is gaining traction in the industry. The suggestion of “more to come” is supported by considerable anecdotal evidence of trickle down effects of genetics transfers from nucleus farms to multiplier farms and then on to commercial farms. It is likely that higher litter rates will characterize the near future of U.S. pork production as highly productive genetics spread further in the U.S. commercial hog sector. This chart was previously published in the USDA, Economic Research Service report, Livestock, Dairy, and Poultry Outlook: January 2020.

Lower prices have likely blunted the effect of Mexican tariffs on U.S. fresh and frozen pork exports

Friday, November 2, 2018

Since Mexico imposed retaliatory tariffs against the United States in June, export volumes (June to August) of U.S. fresh and frozen pork products subject to the tariffs have maintained the same levels as last year. Typically accounting for more than 97 percent of monthly U.S. pork shipments to Mexico, these exports consist mainly of fresh and frozen ham and shoulder cuts. The lower prices of 2018 U.S. ham primal cuts—averaging 20 percent lower in June-August 2018 than in June-August 2017—are likely a significant offset to the import tariff. In contrast to stable exports of fresh and frozen pork products, a different category of pork exports, that includes some processed pork products as well as cooked hams and shoulders, is down almost 45 percent in the June-August period. This chart is drawn from data in the ERS Livestock, Dairy, and Poultry Outlook newsletter, released in October 2018.

Pork imports slow in China as domestic pork production rebounds

Friday, September 22, 2017

China produces roughly half of the world’s pork, generating 55 billion pounds per year since 2013. But, over the past decade it has nevertheless become a leading importer of the meat. Domestic pork production contracted in 2015 and 2016 because of lower pig supplies. That period followed 7 years of growth that drove prices below profitable levels. Imports soared during 2016, as shrinking Chinese pork supplies helped push the country’s pork prices to record levels. But, the most recent data show that imports have fallen about 52 percent from a year ago, reflecting an ongoing recovery in Chinese domestic production. Over the past year, the country reduced its pork imports from all major pork exporting countries, including the United States (-38.0 percent), Canada (-51.6 percent), the E.U. (-56.3 percent), and Brazil (-60.6 percent). In addition, a dozen or more feed and livestock companies have announced aggressive expansion plans within China. With higher domestic hog and pork production, supplies in China appear more than adequate, as the prices for feeder pigs, pork, and live hogs are all below the levels of a year ago. The chart appears in the September Livestock, Dairy, and Poultry Outlook report.

Even as the leading producer, China still leads among global pork importers

Tuesday, January 24, 2017

China produces roughly half of the world’s pork, but it has nevertheless become a leading importer of the meat. China first emerged as a significant importer of pork during 2007-08, when a swine disease epidemic reduced its domestic supply. Imports declined during 2009-10, when China banned pork from the United States—the main supplier at the time—over an alleged disease concern, but imports rebounded after the ban was lifted. From 2011 to 2015, China consistently imported large volumes of pork each year. Imports soared during 2016, as shrinking Chinese pork supplies helped push the country’s pork prices to record levels. China and Hong Kong together now constitute the world’s largest import market for pork. The United States was the leading supplier of China-Hong Kong pork imports during 2007-12, and the second-leading supplier behind Germany during 2013-15. This chart appears in the ERS report China’s Pork Imports Rise Along with Production Costs, released in January 2017.

Farmer share of retail value of red meat is declining

Thursday, March 10, 2016

The spreads between farm prices for hogs and cattle and retail prices for pork and beef have widened over the past 18 months, leading to a decline in the farmer share of retail red meat prices. Growing cattle inventories and increased pork production are pushing cattle and hog prices lower. For the fourth quarter of 2015, hog prices (51-52% lean) averaged about $45 per hundredweight, down about 33 percent from a year earlier and nearly 50 percent below the prices received in the second quarter of 2014. Similarly, cattle prices (5-market steer price) averaged $128 per hundredweight in the last quarter of 2015, down nearly 23 percent from the fourth quarter 2014. Retail prices for both beef and pork are down as well, but by a smaller magnitude as they tend to adjust more slowly to changes in the farm price due to the wide variety of other costs—including labor, packaging, storage, and transportation—that also contribute to retail prices. This chart is based on the ERS Meat Price Spreads data product.

Restrictions on antibiotic use for production purposes in U.S. hogs and broilers likely to have modest effects on prices, quantities

Tuesday, February 2, 2016

Livestock farmers use antibiotics to treat, control, and prevent disease, and also for production purposes, such as increasing growth and feed efficiency. A new U.S. Food and Drug Administration initiative seeks to eliminate the use of medically important antibiotics for production purposes. ERS research shows that only a portion of hog and broiler producers use antibiotics for production purposes, and the productivity increases from such uses are 1-3 percent. Modelling the effect of production-specific antibiotic restrictions suggests that such a policy would have a modest effect on wholesale prices and quantities produced of chicken and pork—less than a 1-percent increase in wholesale prices and a net decline in production of less than 0.5 percent. Because prices increase more than quantities decrease, gross revenues (price times quantity) would increase slightly. This chart is based on the table found in the Amber Waves feature, “Restrictions on Antibiotic Use for Production Purposes in U.S. Livestock Industries Likely To Have Small Effects on Prices and Quantities,” November 2015.

More pork produced with fewer breeding animals, as sow productivity increases

Thursday, January 28, 2016

U.S. annual pork production has grown by more than 63 percent since 1990, and in 2015 it reached an all-time record of more than 24.3 billion pounds. Over the same period, the size of the U.S. hog breeding herd declined by more than 13 percent, reflecting strong productivity increases in hog production. Technical innovation in breeding and genetic research has yielded larger numbers of piglets per sow: U.S. average litter rates grew from fewer than 8 pigs per litter in 1990 to more than 10 today. At the same time, improvements in nutrition and barn management practices, together with heavier slaughter weights, have allowed the hog industry to reduce the size of its breeding herd while expanding production of pork. This chart is based on the ERS Livestock & Meat Domestic Data and the January 2016 Livestock, Dairy, and Poultry Outlook report.

Chicken's popularity makes it the most consumed U.S. meat

Monday, January 25, 2016

In 2013, 57.7 pounds of chicken per person on a boneless, edible basis were available for Americans to eat, compared to 53.6 pounds of beef and 43.4 pounds of pork, according to ERS’s food availability data. From 1909 to the early 1940s, chicken availability had been around 10 pounds per person a year, while yearly per-person beef and pork availability had ranged from between 30 and 50 pounds. Chicken began its upward climb in the 1940s, as innovations in breeding, mass production, and processing made chicken more plentiful, affordable, and convenient for the dining-out market and for cooking at home. By 1996, chicken had overtaken pork as the second-most-consumed meat, and in 2010, chicken overtook beef for the No. 1 spot. Beef availability rose during the second half of the last century, peaking at 88.8 pounds per capita in 1976. Pork availability, which had fallen in 2010 and 2011, was up in 2012 and again in 2013. This chart appears in ERS’s Ag and Food Statistics: Charting the Essentials data product.

Antibiotic use in U.S. hog production varies by age and purpose

Monday, November 30, 2015

Hog producers use Hog producers use antibiotic drugs to treat/control animal diseases, but they also feed them to their hogs to prevent disease and to promote faster growth through improved absorption of feed. There is growing concern that widespread use of antibiotics in humans and animals may encourage microbial resistance and make the drugs less effective for maintaining their health, and the U.S. Food and Drug Administration (FDA) is moving to end the growth-promotion uses of medically important antibiotics in animal agriculture. Antibiotic use varies across the hog sector, according to a USDA survey of hog producers, and the FDA’s action will affect some but not all producers. Over half of pigs in the nursery stage do not receive antibiotics for growth promotion, and that figure could be as high as 75 percent, because 26 percent of hogs were raised by growers that stated they did not know if antibiotics are in the feed. Some contract growers don’t know if antibiotics are in the feed provided by the company for whom they raise hogs. Antibiotics are more likely to be used for growth promotion in finishing hogs (those being fed to market weight), but even here at least 40 percent of hogs did not receive the drugs for growth promotion. This chart is found in the ERS report, Economics of Antibiotic Use in U.S. Livestock Production, ERR-200, November 24, 2015. antibiotic drugs to treat/control animal diseases, but they also feed them to their hogs to prevent disease and to promote faster growth through improved absorption of feed. There is growing concern that widespread use of antibiotics in humans and animals may encourage microbial resistance and make the drugs less effective for maintaining their health, and the U.S. Food and Drug Administration (FDA) is moving to end the growth-promotion uses of medically important antibiotics in animal agriculture. Antibiotic use varies across the hog sector, according to a USDA survey of hog producers, and the FDA?s action will affect some but not all producers. Over half of pigs in the nursery stage do not receive antibiotics for growth promotion, and that figure could be as high as 75 percent, because 26 percent of hogs were raised by growers that stated they did not know if antibiotics are in the feed. Some contract growers don?t know if antibiotics are in the feed provided by the company for whom they raise hogs. Antibiotics are more likely to be used for growth promotion in finishing hogs (those being fed to market weight), but even here at least 40 percent of hogs did not receive the drugs for growth promotion. This chart is found in the ERS report, Economics of Antibiotic Use in U.S. Livestock Production, ERR-200, November 24, 2015.

U.S. hog industry is recovering from PEDv outbreak

Monday, February 9, 2015

The litter rate (pigs per litter) is an efficiency indicator of the U.S. hog industry. Litter rates have been steadily increasing over time due to improvements in genetics, diet, and animal care and management. The emergence of Porcine Epidemic Diarrhea virus (PEDv) in the U.S. swine herd in the spring of 2013 caused a sharp—but temporary—drop in litter rates. PEDv afflicts young piglets in particular, and caused millions of newborn pigs to die as the disease spread to herds in 33 States. The virus flourishes in cold, damp climates, so its effect on litter rates was strong in the fall and winter months of late 2013 and early 2014. The pigs-per-litter rate began to decline in the fourth quarter of 2013, and then dropped sharply in the first quarter of 2014. Litter rates rebounded in the spring of 2014, responding to the warmer, dryer climates and to aggressive actions by producers, including increased biosecurity measures and vaccination. These measures contributed to lower disease incidence and limited losses of newborn pigs from PEDv; they are also expected to limit the incidence of the disease this winter and will help to minimize the impact of future outbreaks. This chart is based on information in the January 2015 Livestock, Dairy and Poultry Outlook.

U.S. hog production increasingly occurs on the largest operations

Monday, January 12, 2015

While the number of all farms in the United States remained fairly constant, the number of hog farms fell by about 70 percent between 1992 and 2009, from over 240,000 to about 71,000. Despite fewer hog farms, the Nation’s hog inventory was stable during the period, averaging about 60 million head, with cyclical fluctuations between 56 and 68 million head. Thus, hog production consolidated as fewer, larger farms accounted for an increased share of total output. From 1992 to 2009, the share of the U.S. hog and pig inventory on farms with 2,000 head or more increased from less than 30 percent to 86 percent. In 2009, farms with 5,000 head or more accounted for 61 percent of all hogs and pigs. This chart is found in the ERS report, U.S. Hog Production From 1992 to 2009: Technology, Restructuring, and Productivity Growth, ERR-158, October 2013.

U.S. hog operations have become increasingly specialized

Tuesday, December 16, 2014

The traditional approach of farrow-to-finish hog production in the U.S.—where breeding and gestation, farrowing, nursery, and finishing to market weight are performed on one operation—is being replaced by operations that specialize in a single production phase. In 1992, more than 50 percent of U.S. hog operations used the farrow-to-finish approach. By 2009, less than 25 percent were farrow-to-finish producers. In contrast, hog operations specializing in raising feeder pigs weighing 30-80 pounds to market weights of 225-300 pounds (feeder-to-finish) accounted for less than 20 percent of hog producers in 1992, but nearly 50 percent in 2009. Specialized operations produced more than 70 percent of U.S. finished hog output in 2009, and were more likely to be producing hogs under contract than were farrow-to-finish farms. This chart is found in the ERS report, U.S. Hog Production From 1992 to 2009: Technology, Restructuring, and Productivity Growth, ERR-158, October 2013.

Grocery store prices for beef, pork, and eggs are up as U.S. supplies decrease

Tuesday, September 16, 2014

Retail food-at-home prices in the second quarter of 2014 were 2.3 percent higher than a year ago, as most at-home food categories increased in price. Retail beef and veal prices were up 10.8 percent as the supply of beef is strained by historically low herd sizes. Over the same time period, pork prices increased 11.2 percent, partially the result of the Porcine Epidemic Diarrhea virus, which has reduced litter sizes and increased piglet mortality. Egg prices are also up, in part due to increasing exports and a strong domestic demand for eggs and egg products. The increases in beef and veal, pork, and egg prices are the largest year-over-year increases since the fourth quarter of 2011. This chart appears in the Food Prices and Spending section of ERS’s Ag and Food Statistics: Charting the Essentials data product, updated September 10, 2014. More information on ERS’s food price forecasts can also be found in ERS’s Food Price Outlook data product.

U.S. hog producers increase slaughter weights to counter PEDv effects

Friday, August 8, 2014

U.S. hog producers are responding to inventory losses associated with the spread of the Porcine Epidemic Diarrhea virus (PEDv) by increasing the average slaughter weights of their remaining inventory, thus mitigating the likely impacts of PEDv on 2014 pork production. The PEDv outbreak reduced the average litter rates for the December 2013-February 2014 and March-May 2014 pig crops by about 5.5 percent and 5.1 percent, respectively, contributing to a 5 percent decline in the June 2014 U.S. hog inventory compared with a year earlier. However, lower U.S. corn prices, combined with excess barn space created by the PEDv losses have allowed producers to respond by holding surviving animals longer on cheaper corn-based rations, thus boosting average dressed weights. During January-May 2014, dressed weights averaged 3.7 percent higher than the same period in 2013. The heavier animals continue to partially offset production losses from PEDv-related deaths. For 2014, USDA forecasts a 5.2 percent drop in hog slaughter, but only a 1.9 percent reduction in pork production. Dressed weights are expected to average more than 214 pounds this year, more than 7 pounds greater than in 2013. Find this chart and additional analysis in Livestock, Dairy, and Poultry Outlook: July 2014.

Hog virus contributes to outlook for higher wholesale and retail pork prices

Thursday, June 26, 2014

Retail pork prices have been rising in recent months, increasing 2.8 percent in the first quarter of 2014. Higher prices at the meat counter are partly due to increasing farm prices for hogs, which rose 41 percent over the same time period. Higher hog prices to date are, in part, the result of strong demand, particularly in export markets, as well as the high price of pork substitutes such as beef and poultry. In addition, the outbreak of Porcine Epidemic Diarrhea virus (PEDv) has increased piglet mortality, reduced litter sizes, and lowered forecasts for U.S. hog slaughter and pork production later in 2014. Farm prices provide early indications of changes at the wholesale and retail levels, although price swings at those levels are dampened by processing, transportation, and retailing costs. The recent increases in hog prices indicate that the current inflation in retail pork prices can be expected to gain momentum in coming months. ERS forecasts wholesale pork prices to increase 7 to 8 percent in 2014 and retail pork prices to rise by 3 to 4 percent. More information on ERS’s food price forecasts can be found in the Food Price Outlook data product, updated June 25, 2014.

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