ERS Charts of Note
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Number of U.S. hog operations declined between 1997 and 2017, while farm size and contract production increased
Friday, December 9, 2022
The structure of the U.S. hog sector changed between 1997 and 2017, shifting hog production to fewer, but larger, farms. According to data from the Census of Agriculture, which is administered by the USDA, National Agricultural Statistics Service, the number of hog operations with inventory declined 37 percent between 1997 and 2002 and continued to drop through 2012. Despite ticking upward in 2017, the number of operations with inventory ended at roughly 66,000 operations, 47 percent less than in 1997. In contrast, the average farm size roughly doubled over those two decades, as measured by the number of head of hogs in inventory per farm. The share of the U.S. hog inventory on farms with 5,000 or more head rose from 40 percent in 1997 to 73 percent in 2017. Overall, the U.S. hog inventory increased by 18 percent over the period, and the average hog farm size rose to more than 1,000 head of hogs. Reductions in the number of hog operations and increases in hog farm size have occurred alongside increases in production contract use. For example, by 2017, the percentage of hogs sold under a production contract rose to more than 50 percent in Iowa and Minnesota (combined) and in North Carolina, three hog-producing States that together contributed to more than half the hogs sold in the United States. From 2012 to 2017, contract production rose from 51 to 59 percent in Iowa and Minnesota and from 83 to 91 percent in North Carolina. This chart appears in the USDA, Economic Research Service report U.S. Hog Production: Rising Output and Changing Trends in Productivity Growth, published in August 2022.
Removal of China’s domestic price trade barriers could increase China’s imports of agricultural commodities
Tuesday, November 29, 2022
China imported more than $205 billion worth of agricultural products in 2021, including more than $37 billion from the United States, yet trade barriers deterred China’s imports from reaching even higher levels. China’s import barriers create what are called “price wedges,” in which domestic prices for agricultural commodities including beef, corn, pork, and wheat are higher than the world price. Researchers at USDA’s Economic Research Service (ERS) recently found that removing these price wedges would lead to increases in agricultural imports for the four commodities over the subsequent 5 to 10 years. For corn and wheat, removing price wedges was estimated to increase China’s imports by 91 and 249 percent, respectively. Both of these commodities are subject to a tariff-rate quota which could constrain additional imports. Removal of the beef price wedge was estimated to increase China’s beef imports by 46 percent, while for pork, it was estimated to increase China’s pork imports by 402 percent—the largest increase among the commodities considered. Overall, the benefits of removing these trade barriers would be widespread, increasing sales for producers in the United States and other exporting countries and yielding lower food prices for China’s consumers. This chart is drawn from the ERS report China’s Import Potential for Beef, Corn, Pork, and Wheat, published in August 2022.
Wednesday, October 5, 2022
The U.S. hog industry has experienced structural change, productivity growth, and increased output since the early 1990s. The average U.S. hog farm has become larger, more specialized, and focused on contract production. Hog and pig producers sold more than nine times the volume of hogs per farm in 2015 than in 1992, ending at 8,721 head of hogs per farm in 2015. Over the same period, feeder-to-finish operations—those specializing in raising feeder pigs from 30-80 pounds to market weights of 225-300 pounds—became the majority, growing from 19 to 60 percent of all hog operations. Hog operations also became increasingly likely to use production contracts. A sharp increase in contract production occurred from 1992 to 2004, but contract production leveled off near 70 percent between 2004 and 2015. By 2015, the majority of hogs and pigs were being produced on specialized operations (89 percent) and under contract production (69 percent). From 1992 to 2015, production contract use increased from 3 to 53 percent of operations, with roughly 71 percent of feeder-to-finish operations engaged in contract production by 2015. These agreements were attractive because contractors typically provided the hogs and feed, made many management decisions, transported animals to market, and decided where and when hogs were to be sold. This chart appears in the USDA, Economic Research Service’s report U.S. Hog Production: Rising Output and Changing Trends in Productivity Growth, published August 2022.
Wednesday, January 26, 2022
Collectively, Iowa, Kansas, Missouri, and Nebraska compose the largest hog processing region in the United States. More than 40 percent of all U.S. hogs are processed within the borders of this four-State area USDA’s National Agricultural Statistics Service (NASS) identifies as Region 7 of 10 Federal regions. The region is also home to more large and medium-size processing plants than the other regions. Large plants employ more than 1,000 people and medium plants employ 100 to 1,000 people. In the first three months of the (Coronavirus) COVID-19 pandemic (March–May 2020), Region 7 experienced a 40 percent decline in hog slaughter compared with rates during the same period in 2019. Labor shortages attributed to COVID-19 infections among workers resulted in slow production and temporary shutdowns at large processing plants for about 10 weeks. However, when looking at hog slaughter and reported COVID-19 cases for the entire year, slaughter increased even as cases of infection also increased. From June 2020 through the end of December 2020, weekly slaughter rates were generally on par with 2019 levels for the corresponding weeks. The recovery was in part due to improvements in labor availability and the adoption of plant-specific strategies aimed at improving worker safety and efficiency. Overall, hog slaughter for the region in 2020 was approximately 2 percent higher than in 2019, according to NASS’ Livestock Slaughter 2020 Summary, even with the sharp declines in production that occurred at the onset of the pandemic. This chart is drawn from Economic Research Service’s COVID-19 Working Paper: Changes in Regional Hog Slaughter During COVID-19.
Wednesday, September 29, 2021
The Coronavirus (COVID-19) pandemic has continued to exacerbate longstanding labor shortages in the U.S. pork processing industry. Because the production of deboned products requires more labor, associated prices are higher than bone-in product prices, which have smaller labor requirements. Weekly price spreads between a specified assortment of deboned pork cuts and a bone-in ham weighing 23–27 pounds highlight the price differential. When labor shortages are acute—as in the spring of 2020 when COVID-19-related infections of processing plant employees caused some plants to slow or temporarily shut down production—plant managers often shift labor away from deboning activities. The price of deboned pork products then increases in accordance with reduced supplies, while bone-in product prices decline as supply expands. This results in wider price spreads. Although the price spread declined through early May 2021 as hog numbers declined in a typical seasonal pattern, it did not return to pre-COVID levels. In mid-to-late August, the price spread became increasingly variable and featured several spikes, suggesting that COVID-related impacts on the labor availability of employees is ongoing, and that price spread turbulence is continuing. This chart is drawn from the September 2021 issue of the USDA, Economic Research Service Livestock, Dairy, and Poultry Outlook.
Friday, March 26, 2021
The recently released USDA Cold Storage stocks report showed February 2021 ending stocks of pork in the United States at 491 million pounds, more than 24 percent below levels in February 2020. With USDA forecasting 2021 hog prices to average more than 29 percent above prices last year, it is unlikely pork stocks will build to pre-COVID-19 levels in 2021. Pork stocks have remained significantly below year-earlier levels since last spring, in response to turbulence in the U.S. pork processing sector related to the COVID-19 pandemic. In May 2020, stocks fell more than 23 percent from April 2020 levels because of major disruptions in pork production that included several temporary processing plant shutdowns. In February 2021, ending volume represented about 22 percent of February's estimated federally inspected pork production. A more typical stocks-to-production ratio for February is about 29 percent. USDA is forecasting prices of live equivalent 51-52 percent lean hogs to average about $56 per hundredweight, 29 percent higher than hog prices averaged in 2020. The increase reflects, in part, expectations for continued robust consumer demand for pork products. Lower levels of pork stocks could limit the price-moderating role that stocks have played in the past, in the event of unforeseen spikes in pork prices. This chart is drawn from USDA, Economic Research Service’s Livestock, Dairy and Poultry Outlook, March 2021.
Friday, December 18, 2020
Ham is often served as a centerpiece on the holiday table. Grocery stores frequently feature hams in November and December, and consumers may choose between bone-in or boneless hams. Those who opt for the convenience of boneless hams may be paying higher prices than they have in recent years. Retail ham prices are generally lower in November and December than in other months of the year, but retail ham prices have been high throughout most of 2020. The March 2020 boneless ham price of $4.46 per pound as reported by the Bureau of Labor Statistics (BLS) tied the highest reported price from 2015 to 2019. While BLS did not report a boneless ham price in April, the reported prices for the rest of 2020 were above that previous high. USDA’s Economic Research Service uses prices like these from BLS to report on price spreads—the difference between what consumers pay for a certain type of meat at a retail store and what producers actually receive for that meat. These spreads are used to analyze the demand for meat products such as ham, and consequently, the value of hogs and other livestock. This chart is drawn from Economic Research Service’s Meat Price Spread Data, December 2020.
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.
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.
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."
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.
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.
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.
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.
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.
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.
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.