Sector at a Glance
Hogs are produced in three types of specialized enterprises:
- Farrow-to-finish operations raise hogs from birth to slaughter weight, about 240-270 pounds.
- Feeder pig producers raise pigs from birth to about 10-60 pounds, then generally sell them for finishing.
- Feeder pig finishers buy feeder pigs and grow them to slaughter weight.
Most hog producers use some type of confinement production, with specialized, environmentally modified facilities. Confinement production allows year-round production by protecting hogs from seasonal weather changes, disease exposure, and predators. Manure collected from hog operations is typically spread as fertilizer on nearby cropland.
Some overlap exists in enterprise type. For example, farrow-to-finish operators may sell or buy feeder pigs if their feed production is smaller or larger than their own production needs. However, most producers use only one production system.
The Biological Hog Cycle
The biological hog cycle is longer than that of broilers, but shorter than for cattle. (The economic hog cycle refers to the peaks and valleys in hog inventories over time, while the biological hog cycle refers to the biological time lags involved in hog production.) A sow can produce an average of slightly more than two litters per year, each consisting of an average of nearly nine pigs. Production of hogs has consisted of five different phases: farrow-to-wean, feeder pig or nursery, finishing, breeding stock, and farrow-to-finish.
Source: Dr. Paul Pitcher and Sandra Springer, University of Pennsylvania School of Veterinary Medicine, 1997.
It takes about 32 weeks, from birth to breeding age, before a gilt (a female hog that has not farrowed—that is, given birth) is ready to reproduce. The reproduction process begins with the mating of a gilt capable of conception and a boar (male hog) or by artificially inseminating the gilt with semen from a desired boar. Once the gilt has been bred successfully, she will farrow an average of at least 10 piglets (young pigs) in approximately 16 weeks. A sow (adult female hog that has farrowed at least once) can be bred again shortly after pigs from the previous litter are weaned.
In a farrow-to-finish operation, 22-26 weeks (starting at birth) are required to grow a pig to slaughter weight. Sows nurse their piglets for an average of 3 weeks before they are weaned (separated from the sow). This is the farrow-to-wean phase of hog production. Weighing about 10 pounds, the weaned pigs are either moved on to the next phase of production (known as wean-to-feeder pig) or they are shipped directly to finishing operations. Pigs in the wean-to-feeder pig phase are fed rations varying in protein content until they reach an average weight of about 40 pounds. From the feeder pig stage, the animals enter a finishing/feeding stage and remain there until they reach a desired slaughter weight of about 280 pounds. Operations of this type are known as the feeder pig-to-finish phase, or simply the finishing phase.
U.S. hog industry underwent a significant structural change over the past few decades
One of the most striking features of the U.S. hog industry—associated with technological change and evolving economic relationships among producers, packers, and consumers—has been the rapid shift to fewer and larger operations. Since 1990, the number of farms with hogs has declined by over 70 percent, as individual enterprises have grown larger. U.S. hog operations tend to be heavily concentrated in the Midwest—Iowa and southern Minnesota, particularly—and in eastern North Carolina.
Large operations that specialize in a single phase of production have replaced farrow-to-finish operations that performed all phases of production. The use of production contracts has increased. Operations producing under contract are typically larger than independent operations and are more likely to specialize in a single phase of production. These structural changes have coincided with efficiency gains and lower production costs. Most of the productivity gains are attributable to increases in the scale of production and technological innovation (figure 2).
- See ERS publication U.S. Hog Production From 1992 to 2009: Technology, Restructuring, and Productivity Growth .
Federal programs for hogs are not comparable to those for crops. Federal legislation provides assistance to farmers with emergency feed, meat purchasing, disease eradication, drought assistance, and conservation/environmental programs.
- When producers are undergoing financial stress, USDA's Agricultural Marketing Service (AMS) may purchase meats for domestic feeding programs to help strengthen prices through Commodity Purchase Programs.
- USDA's Animal and Plant Health Inspection Service (APHIS) oversees USDA's disease eradication programs such as that for pseudorabies, a viral swine disease.
- USDA's Farm Service Agency (FSA) provides assistance to producers for natural disaster losses resulting from drought, floods, fire, freezes, tornadoes, pest infestations, or other calamities.
- Other programs for livestock operations include the Environmental Quality Incentives Program (EQIP), which provides technical, educational, and financial assistance to eligible farmers and ranchers to address soil, water, and related natural resource concerns on their lands in an environmentally beneficial and cost-effective manner.
The trend toward fewer and larger enterprises has brought environmental issues to the forefront of public policy regarding the hog industry. As animal density increases, so do concerns regarding air and water quality, occupational health, and waste management. In areas where hog production is most concentrated, human population density is increasing as well. These trends portend growing conflicts between nearby residents and hog producers over odor, water contamination, and other environmental problems associated with concentrated production.
The Environmental Protection Agency (EPA) provides information about national environmental requirements related to the production of agricultural animals, including fish and other aquatic animals. EPA promulgates and enforces livestock waste regulations, including those on Concentrated Animal Feeding Operations. Many States and locales have regulations on the size of confined animal operations, as well as odor, waste disposal, and water quality as they relate to agriculture.
Agricultural policy extends to trade, and agriculture is one of the topic areas in the World Trade Organization that is under negotiation. In addition to market forces, sanitary and phytosanitary regulations, tariffs, quotas, and other policies affect the trade of animal products.
The United States is a relatively recent entrant to the international pork market, becoming a net exporter in 1995. Productivity gains allowed the industry to export a higher share of commercial pork—reaching 21 percent in 2016, compared with 2 percent in 1990. Since 2000, the United States has been one of the world’s top five annual pork exporters, shipping over 5 billion pounds (carcass weight-equivalent) of fresh and frozen pork cuts to foreign markets, on average, since 2010 (figures 3-4).
Becoming a net exporter is a consequence of recent structural changes in the U.S. pork industry. Since the mid-1980s, the industry has shifted from many small, independently owned hog operations toward fewer, larger operations that rely on contracting and vertical coordination. Such structural change reduces producer risk and optimizes a year-round processing capacity that can accommodate cyclically large fall and winter slaughters.
Four countries account for 75 percent of U.S. pork exports
The primary markets for U.S. pork products are Mexico (which accounts for about one-third of U.S. exports), Japan, China/Hong Kong, and Canada. Primary pork competitors in foreign markets are the European Union, Canada, and Brazil.
Mexico became the largest foreign destination for U.S. exported pork in 2015. Increasing Mexican demand for U.S. pork products reflects higher incomes and an expanding middle class. In 2016, Mexico accounted for 31 percent of U.S. pork exports.
Japan imports both fresh-chilled pork and frozen pork products. Japan's fresh pork has been supplied primarily by the United States. For frozen pork, the EU has been Japan's primary supplier, followed by the United States and Canada. Imported fresh pork products (higher priced cuts such as loins) are typically marketed through retail channels in Japan, while frozen pork cuts (mainly boneless bellies and shoulders) are used as inputs for processed pork products.
In recent years China/Hong Kong has become a significant importer of U.S. pork products. Since 2010, China/Hong Kong has been either the third or fourth largest foreign buyer of U.S. pork. As China’s pork industry adjusts to greater consumer demand and new environmental restrictions that could slow the growth of domestic pork production, a growing and increasingly urban middle class will likely boost demand for imported pork products.
NAFTA partner Canada is a significant buyer of U.S. pork products. In recent years, Canada has vied with China/Hong Kong as the third or fourth largest importer of U.S pork, facilitated by close proximity to U.S. pork production and few border restrictions.
The United States has accounted for a declining share of world pork imports
The United States has accounted for a diminishing share of world pork imports as U.S. imports fall and world trade expands. The United States now accounts for less than 10 percent of global pork imports.
Most U.S. pork imports originate from Canada and the European Union. In recent years, more than four-fifths of U.S. imports came from Canada, while EU member countries accounted for about one-tenth. However, Canada's preeminence as a supplier to the United States is a recent development. As recently as 1985, Denmark and Canada each supplied about two-fifths of U.S. pork imports.
What has changed? First, the significant expansion of the Canadian pork industry in the last decade has enabled it to supply pork cuts to fill deficit U.S. markets. Also, a number of factors have combined to lower overall costs of trading with Canada relative to Denmark. The North American Free Trade Agreement (NAFTA), low transportation costs, and cross-border investments have all together accelerated integration in the North American pork and foodservice industries. Nevertheless, the EU is likely to be a presence in the U.S. market for some time because it is a low-cost supplier of ribs and other specialty pork cuts.
The United States is a large net importer of live hogs
Significant numbers of live hogs—animals mostly weighing less than 15 pounds and sold under contract to finishing operations in Corn Belt States (figure 7)—are imported from Canada, while a small number of U.S. hogs—mostly breeding animals—are exported sporadically to Mexico (figure 8).
In recent years, many factors encouraged Canadian producers to export feeder pigs to the United States. Foremost was the drive by the Canadian Government to curb expenditures in the 1990s, including the abolishment of the Crow Rate grain transport subsidy in 1995. Eliminating this subsidy provided an incentive for producers in the Western Provinces to use grain for livestock production. Also, lower Canadian subsidies resulted in reduced U.S. countervailing duties on imported Canadian hogs. These policy changes created powerful incentives for the Canadian pork industry to expand.
On the U.S. side, factors such as available slaughter capacity, dependable feed supplies, and environmental regulation favoring the construction of hog-finishing facilities in the Corn Belt coalesced to generate significant U.S. demand for Canadian feeder pigs. The trend is likely to continue.