U.S. Hog Production from 1992 to 2009: Technology, Restructuring, and Productivity Growth

Abstract

U.S. hog farms declined in number by more than 70 percent over the past two decades while hog inventories remained stable. The result has been an industry with larger hog enterprises, increased specialization in a single phase of production, greater reliance on purchased feed rather than feed grown on the farm, and an increased reliance on formal contracts — connecting farmers, hog owners, and packers — to coordinate production. This structural change contributed to substantial productivity gains for hog farms, likely benefiting U.S. consumers in terms of lower pork prices and enhancing the competitive position of U.S. producers in international markets — though larger hog farms may increase environmental risks by concentrating production in areas with limited land available for manure application. With most hogs now grown on very large operations and with productivity-enhancing technologies widespread, the slowdown in hog farm productivity growth after 2004 suggests that the era of dramatic productivity gains will likely remain unmatched, absent significant technological innovation.

Keywords: Hogs, pigs, farm productivity, production contracts, pork prices, scale of production, farm structure, total factor productivity, concentration, Agricultural Resource Management Survey

JEL Classification: Q12