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Ron Plain

Every third year, my colleague, Glenn Grimes, does a survey of U.S. hog producers. His latest effort indicates a modest slowdown in the shift from small to large hog farms.

In his 1988 study, Grimes concluded that those firms that marketed 5-10 thousand hogs accounted for 9% of all the hogs marketed that year. In 2003, this size group once again marketed 9% of the nation's hogs. Grimes' follow-up studies indicate firms that market fewer than 5,000 head annually have lost market share since 1988 while those that market more than 10,000 head annually have gained market share.

Those firms which market fewer than 5,000 hogs per year have seen their collective market share decline from 72% of U.S. hogs in 1988 to 13% in 2003. The number of hogs being produced by this size group has been declining by roughly 15% annually for the past decade.

There has been a tremendous drop in production by those farms which market fewer than 1,000 hogs per year. In 1988, Grimes concluded that those firms that marketed fewer than 1,000 hogs accounted for 32% of all the hogs marketed that year. In 2003, this size group marketed only 1% of the nation's hogs.

Those firms which market 10,000 hogs or more per year have seen their market share increase from 19% of U.S. hogs in 1988 to 78% in 2003. The number of hogs being produced by this size group increased by approximately 19% per year during the mid 1990s, by 11% annually during the late 1990s and by 5% per year in the first part of this decade. The slowing growth rate for these larger firms is believed to be related to the declining profitability of hog production during the past 10 years and the increasing difficulty in getting permits for large livestock operations. Much of the growth by large hog firms in recent years has been through acquisition of other hog firms rather than construction of new hog facilities.

The greatest growth in the last 15 years has been by those firms which market 50,000 hogs or more per year. In 1988, Grimes concluded that such firms accounted for 7% of all the hogs marketed that year. In 2003, this size group marketed 59% of the nation's hogs.