Corn Crisis Hog Farmers Hurt By Rising Corn Prices

4406 words - 18 pages

Corn Crisis PAGE \* MERGEFORMAT 22
Industry DescriptionThe US hog and pig farming industry includes about 65,000 farms with combined annual revenue of $14 billion. The hog market ranks 7th in commodities for the United States. (USDA: Hogs) Major companies include Smithfield Foods, Tyson Foods, JBS Swift, and Cargill. The industry is highly concentrated with over 90% of industry revenue generated by just 10% of farms. Smithfield Foods and Tyson Foods are the largest contributors by farming and processing nearly half of the pork consumed in the US.Industry demand is driven by domestic and international trends in pork consumption. The profitability of individual companies depends on efficient operations and reducing the spread of disease. Large companies have advantages in vertically integrating operations from birthing to packaging and distribution. Small operations, typically family-owned farms, can compete effectively by specializing in a single stage of hog farming or raising humanely treated animals. Hog and pig farms compete against other livestock, poultry, and fish operations.The total national inventory of hogs and pigs (immature hogs weighing less than 125 pounds) is around 60 million head. In 2007, the pork industry produced approximately 22 billion pounds of pork, a number that has remained relatively flat for several years in spite of population gains. There are 694,000 hog farms containing an average of 871 hogs with the majority of farms located in Iowa and North Carolina. The number of US hog farms has fallen about 90% since the 1970s and 1980s due to more efficient industrial operations displacing small, typically family-run farms. Of US hog farms, 70% manage fewer than 100 hogs, yet account for just 1 percent of total industry revenue. The average farm manages 900 pigs and hogs.Pigs weigh from 10 to 20 pounds at the time they are weaned. Young pigs, called feeders, are gathered into a nursery where they consume a high-energy feed of soybean meal and corn. Pigs typically gain three pounds for every pound of feed. Farmers move feeder pigs out of the nursery when they reach 50 to 60 pounds, usually around two to three months old. The final stage, called growing or finishing, is a four-month process of intense feeding until the hog reaches 240 to 270 pounds, which is considered the ideal slaughter weight. 400,000 hogs are transferred to slaughterhouses daily. 10% of US hogs are kept for breeding and 5 to 10 percent are removed from inventory due to death or disease.Key inputs for the industry include corn, soybeans, water, whey, and antibiotics. Feed inputs can be in short supply due to weather and competition from other non-feed harvests, such as biotechnology and human consumption. Hog farmers enter into contracts with providers of corn and soybean in an effort to secure plenty of feed for the anticipated number of pigs and hogs.Technology plays a critical role in the health of the hog farming industry, particularly as large farms...

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