MARKETING
PIH-85
pork industry handbook
PURDUE UNIVERSITY COOPERATIVE EXTENSION SERVICE • WEST LAFAYETTE. INDIANA
The Structure of the U.S. Pork Industry
Authors
V. James Rhodes, University of Missouri
Glenn Grimes, University of Missouri
Reviewers
Bill Lazarus, University of Minnesota
David Meisinger, Lafayette, Indiana
Emmett Stevermer, Iowa State University
The structure of the hog industry is changing rapidly in terms of the size of the operation and the importance of contract production, but change in location has occurred at a slower rate. In the early 1970s, a farm marketing more than 5,000 hogs a year was a “big operation.” By 1990, marketing 50,000 hogs per year was considered a big operation. It is likely that early in the 21 st Century a firm may need to market 500,000 hogs to be regarded as big. A few firms may market more than 3 million hogs per year. The shift toward an individual operation (firm) producing on multiple sites, or “farms,” underlies the move toward larger operations. In some instances, multiple sites involve contract production.

Size of Producers
A 1992 survey that we conducted with Pork magazine (Table 1) estimated that the 29,650 U.S. operations annually marketing 1,000 or more hogs, marketed 68.9 million hogs in 1991 (78.1% of total commercial slaughter of hogs including culled breeding stock). Most (28,394 or 95.8%) of these operations were non-contractors, referred to as “independents,”
while 1,256 were contractors. The independents’ marketings accounted for 80% of the total marketings in this survey.

Nearly 36 million market hogs were produced by independents producing on single farms. Next in size were independents with multi-units on two or more farms producing almost 14 million market hogs in 1991. Contractors produced nearly 14 million head.

The top 2,947 operations (size groups 5. 6. and 8 in Table 1) marketed almost 29 million hogs, or one-third of the nation's hogs. Of the six size groups, size 1 (1.000 to 1.999 head) was the most common with 16.647 operations and almost 18 million market hogs (26% of the survey's hogs and 20% of the national slaughter).

Magnitude of Contract Production
In 1991, it is estimated that 1.256 contractors marketed
13,732,000	market hogs and 1,848,000, feeder pigs, and seed stock. Survey data (Table 2) on operations marketing 1.000 or more hogs and pigs a year puts those numbers in perspective:
Table 1. Number of U.S. hog operations marketing more than 1000 head by size of operation (1991).
		Total Marketing (000 Head)	
Size of Operation	Number of Operations	Market Hogs Total Hogs & Pigs	
1 (1000-1999)	16,647	17,904	21,998
2 (2000-2999)	6,435	11,686	14,568
3(3000-4999)	3,621	10,300	12,849
5 (5000-9999)	1,861	8.622	11.858
6 (10,000-49,999)	1.045	11,427	15.964
8 (50,000 plus)	41	8,942	9,950
Total	29,650	68,880	87,188
Cooperative Extension work in Agriculture and Home Economics, State of Indiana, Purdue University, and U.S. Department of Agriculture cooperating: H. A. Wadsworth, Director, West Lafayette, IN. Issued in furtherance of the acts of May 8 and June 30, 1914. The Cooperative Extension Service of Purdue University is an affirmative action/equal opportunity institution.