Economic

Research

Service

Economic 

Research 

Report 

Number 158

October 2013

United States Department of Agriculture

William D. McBride and Nigel Key

U.S. Hog Production From 1992 to 

2009: Technology, Restructuring, 

and Productivity Growth
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McBride, William D., and Nigel Key. U.S. Hog Production From 1992 to 2009: 

Technology, Restructuring, and Productivity Growth, ERR-158. U.S. Department 

of Agriculture, Economic Research Service, October 2013.

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United States Department of Agriculture

Economic 

Research 

Service

Economic 

Research 

Report 

Number 158

October 2013

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 

benefi ting 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 signifi cant technological innovation. 

Keywords: Hogs, pigs, farm productivity, production contracts, pork prices, scale of 

production, farm structure, total factor productivity, concentration, Agricultural Resource 

Management Survey

Acknowledgments

Thanks go to Charles Haley of USDA-APHIS, James Kliebenstein of Iowa State 

University, Eric O’Donoghue of USDA-ERS, and one anonymous reviewer for providing 

in-depth reviews of an earlier draft of this report. Thanks also go to our editor, Dale 

Simms, and to Curtia Taylor for graphic layout and design. Special thanks go to the hog 

producers who participated in the 1992 Farm Costs and Returns Survey and the 1998, 

2004, and 2009 Agricultural Resource Management Surveys, and to those who collected 

and provided the survey data.

William D. McBride and Nigel Key

U.S. Hog Production From 1992 to 

2009: Technology, Restructuring, 

and Productivity Growth
ii

U.S. Hog Production From 1992 to 2009: Technology, Restructuring, and Productivity Growth, ERR-158

Economic Research Service/USDA

Contents

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Background and Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

 Types of Hog Producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Changing Structure of Hog Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

 Size of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

 Business Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

 Regional Profi le . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

 Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

 Antibiotic Use and Sanitary Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

Improvements in Hog Farm Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Input Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

 Sources of Productivity Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

 Disaggregating Productivity Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

 Implications for Scale of Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

Regional Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

 Organizational Structure and Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

Implications of Structural and Productivity Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

 Lower Consumer Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

 Increasing Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34

 Environmental Risks and Benefi ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
www.ers.usda.gov

What Is the Issue?

Over the past two decades, hog producers have adjusted the size, organizational structure, and 

technological base of their operations; some have ceased hog production. The effects of these 

changes have extended beyond the industry as restructuring may have heightened environmental 

risks and nuisance impacts and lowered prices for pork consumers. In addition, the economic 

environment for pork producers changed as new uses for corn, the primary ingredient of hog 

feed, have increased feed prices. A slowdown in productivity growth after 2004 suggests that 

the era of dramatic growth in hog production is likely over, absent new technological innovation. 

This report presents information about changing structural characteristics and economic relationships in hog production, and discusses what these suggest for the future of hog farms.

What Did the Study Find?

The number of hog farms fell by more than 70 percent from 1992 to 2009 while the hog inventory remained stable. The average hog farm grew from 945 head of hogs sold or removed under 

contract in 1992 to 8,389 head in 2009. Specialized fi nishing operations (feeder-to-fi nish) 

increased their share of production from 22 to 77 percent during 1992-2004, while the share of 

production from farrow-to-fi nish operations fell from 65 to 18 percent. However, from 2004 to 

2009 the shift toward operations specializing in a single phase of production slowed, and farrowto-fi nish producers slightly increased their production share over this period. High corn and 

soybean prices during 2007-09 raised hog feed costs considerably. Declining hog farm numbers 

during this period suggest that many small, likely high-cost operations ceased production, adding 

to the average size of hog operations. 

Hog operations organized under production contracts grew from 5 percent of production in 1992 

to 67 percent in 2004. Operations producing under contract were larger than other operations 

and more likely to specialize in a single production phase. Between 2004 and 2009, the share of 

hogs produced under contract grew only 4 percentage points, to 71 percent. Few farrow-to-fi nish 

farms produce under contract. An expanded share of production from large-scale farrow-tofi nish operations likely slowed growth in the use of production contracts on hog farms after 2004.

United States Department of Agriculture

A report summary from the Economic Research Service October 2013

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of economic research and 

analysis from the U.S. 

Department of Agriculture, 

providing timely information on economic and policy 

issues related to agriculture, 

food, the environment, and 

rural America.

Find the full report 

at www.ers.usda.

gov/publications/eibeconomic-researchreport/err158

Economic

Research

Service

Economic 

Research 

Report 

Number 158

October 2013

United States Department of Agriculture

William D. McBride and Nigel Key

U.S. Hog Production From 1992 to 

2009: Technology, Restructuring, 

and Productivity Growth

William D. McBride and Nigel Key

U.S. Hog Production From 1992 to 

2009: Technology, Restructuring, and 

Productivity Growth
The rapid growth of hog operations along the southeast coast of the United States during 1992-98 slowed in subsequent years partly because the North Carolina State legislature placed a moratorium on expanded hog production 

in the State (the leading hog producer in this area) in response to environmental concerns. In contrast, the size of 

hog operations increased more rapidly in the Heartland (mainly Iowa and Illinois) during 1998-2004 as contract 

production in this area expanded. This trend continued during 2004-09 as average production from both farrowto-fi nish and feeder-to-fi nish hog operations increased in the Heartland.

Substantial productivity gains for hog farms since 1992 were attributable to increases in the scale of production 

and technological innovation. The increased size of operations accounted for almost half of the total increase in 

hog farm productivity since 1992. However, individual and total factor productivity growth on feeder-to-fi nish 

farms, where most market hogs are produced, slowed considerably between 2004 and 2009. 

Productivity gains in hog production during 1992-2009 have likely benefi ted U.S. consumers in terms of lower 

pork prices, and enhanced the competitive position of U.S. producers in international markets. However, 

increases in the scale of production have resulted in greater animal density, creating possible environmental 

risks. On the other hand, increased feed effi ciency accompanying structural change offset some of these risks as 

the waste per animal fell. In addition, concentrating manure sources in fewer locations potentially affects fewer 

people and may also make some manure treatment technologies (e.g., energy from bio-waste, or processing into 

concentrated fertilizer) feasible.

The era of dramatic productivity growth in hog production from 1992 to 2009 will likely remain unmatched, 

absent signifi cant technological innovation. The 1992-2009 data support this conclusion on two fronts. First, 

the gains from exploiting scale economies are nearly exhausted, as most hog production now takes place at a size 

where returns to scale are nearly constant. Second, the measurable technological and organizational innovations contributing to productivity growth (e.g., confi nement housing, production contracts, artifi cial insemination, 

all-in/all-out management) are now widely diffused. 

How Was the Study Conducted?

Data used in this report come from USDA surveys of U.S. hog producers conducted for 1992, 1998, 2004, and 

2009. Summaries of each data year were used to describe hog farm differences by producer type according to 

size, business organization, region, and production technology. A regression analysis was used to measure hog 

farm total factor productivity growth between 1992 and 2009 and decompose it into changes in four components: 

(1) technical change, the increase in the maximum output produced from a given level of inputs; (2) technical 

effi ciency, the farm’s ability to achieve maximum output given its set of inputs; (3) scale effi ciency, the degree to 

which a farm optimizes the scale of its operations; and (4) allocative effi ciency, a farmer’s ability to choose a less 

costly mix of inputs to produce the same level of output. This study focused particularly on economies of scale, 

analyzing how increases in scale have contributed to productivity growth, and investigating whether scale economies in hog production have increased over time. 

www.ers.usda.gov
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Introduction

Background and Objective

The increasing size and specialization of operations refl ect signifi cant structural change in U.S. hog 

production during the past two decades. Once dominated by many small operations that practiced 

both crop and hog farming, the industry has become increasingly concentrated among large operations that produce hogs on several different sites. Further, large operations that specialize in a single 

phase of production (see glossary) have become the norm while the number of farrow-to-fi nish operations that perform all phases of production has diminished, and those remaining are much larger 

operations. Organizational change in hog production, particularly the widespread use of contracts 

with growers, enabled individual producers to grow by specializing in a single phase of production. 

Technological innovation has also been a driving force behind the industry’s structural shift and has 

contributed to substantial increases in hog farm productivity.

This report examines trends and developments in U.S. hog production over the past two decades, 

analyzing changes in the characteristics, production practices, and production costs of U.S. hog operations, and evaluating structural and productivity trends. The objective is to emphasize economic 

relationships that have affected the size and ownership structure of hog production and the impact 

of these changes on industry productivity. The report provides data for 2009 (the latest survey 

results available) as an update to information on farm size, production costs, business arrangements, 

production facilities and practices, and farm operator and fi nancial characteristics of the U.S. swine 

industry previously presented for 1992, 1998, and 2004 (McBride, 1995; McBride and Key, 2003 

and 2007; Key and McBride, 2007). 

This report relies on data from detailed surveys of U.S. hog producers for 1992, 1998, 2004, and 

2009 (see box, “Data”). The target population of each survey was farms with 25 or more hogs on 

the operation at any time during the year. Screening out farms with hog inventories below 25 head 

excludes farms raising hogs primarily for onfarm consumption and other noncommercial activities, 

such as youth projects. Each sample included operations with hogs regardless of who owned the 

hogs, and thus included producers who raised hogs under contract with the hogs’ owner. Therefore, 

results differ from those of surveys of hog owners (Boessen et al., 2004), where the sample population of hog owners includes very large operations with hogs produced under contractual arrangements on multiple sites (see box, “Hog Producers and Hog Owners”). 

William D. McBride and Nigel Key

U.S. Hog Production From 1992 to 

2009: Technology, Restructuring, and 

Productivity Growth
2

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Data

Data for 1998, 2004, and 2009 come from USDA’s Agricultural Resource Management Survey 

(ARMS), while data for 1992 come from the ARMS predecessor, USDA’s Farm Costs and 

Returns Survey (FCRS). The surveys covered a cross-section of U.S. hog operations and 

collected information on farm size, production costs, business arrangements, production facilities and practices, and farm operator and fi nancial characteristics. Producers in 16 States, 

including all major hog-producing States, participated in each of the 4 hog producer surveys (fi g. 

1). These 16 States represented nearly 90 percent of U.S. hog production in each survey year.1

--continued

1Eight States were included in the ARMS survey at least 1 year, but not in all 4 years. The target for each 

survey was to account for at least 90 percent of the U.S. hog inventory in each survey year. Some States were 

added during a survey year to reach the 90-percent target, but were not needed in other survey years. An interest 

in studying the expansion of hog operations into western States accounts for some of the additional eight States.

Figure 1

States as part of the 1992, 1998, 2004, and 2009 surveys of hog producers

Note: The samples included 1,221 farms in 1992, 1,633 farms in 1998, 1,198 farms in 2004 and 1,289 farms 

in 2009. 

Source: USDA, Economic Research Service.

Producers in the 16 States surveyed in all four years accounted for nearly 90 

percent of the hog and pig inventory on U.S. farms in each year.

Surveyed in less than 4 years

Surveyed in all 4 years
3

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Data (continued)

Each surveyed farm represents a number of similar farms in the population, as indicated by the 

surveyed farm’s expansion factor. The expansion factor, or survey weight, was determined from 

the farm’s selection probability and thereby expands the sample to represent the target population. The expanded samples in each survey represent more than 90 percent of the hog and pig 

inventory on U.S. farms in each survey year (USDA, NASS, Feb. 2010; Jan. 2006; Dec. 1995-

2009). However, the hog samples expand to cover only about a third of the farm operations that 

had any hogs or pigs due to the 25-head threshold.2 

Estimates from the surveys in 1992, 1998, 2004, and 2009 are comparable because of the consistent way in which the surveys were conducted and processed. Each survey had broad national 

coverage, represented the same target population (operations with 25 head or more), involved 

a complex sampling scheme designed to represent the target population, was conducted the 

same way (hand enumerated) by the same organization (NASS), and collected much the same 

information in a similar format. Also, the defi nitions of different types of hog producers used 

to summarize and present the data were identical in all 4 years.

The ARMS is a repeated cross section – operators are chosen randomly to participate in each 

survey; it is not a panel where the same operators are surveyed repeatedly. For this reason, some 

of the differences across time in average operator and operation characteristics result from the 

fact that different operators were selected for each survey, rather from actual changes in average 

characteristics. When differences across individuals are large and the sample is small, a panel 

may have greater statistical power to identify changes over time than repeated cross sections. 

However, in the past decades, a large number of operations have exited and entered the hog 

business and these operations differ substantially from continuing operations. For example, new 

entrants tend to be larger and exiting operations smaller than continuing operations (Key, 2013). 

A panel survey that samples only continuing operations would not provide an accurate perspective on the industry, making a repeated cross sectional survey preferable for the purposes of this 

study. 

This study describes changes in the structure of hog producers defi ned as sites with 25 head or 

more hogs on the place during 2010, not necessarily the hog owners, because of the nature of 

the ARMS (see box, “Hog Producers and Hog Owners”). Signifi cant changes in the structure 

of hog ownership also occurred during the study period, but due to data limitations an analysis 

of these changes is outside the scope of this report.

2Because of the minimum-size threshold, the share of farms with fewer than 100 head are signifi cantly lower in 

ARMS than in NASS statistics. While these small hog operations represent about 70 percent of U.S. hog farms, 

they account for less than 1 percent of the hog inventory.
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Hog Producers and Hog Owners

The rapid growth of contract production has increasingly separated hog production from hog 

ownership. Under contract production, a hog owner (a contractor) engages a producer (a grower) 

to take custody of the pigs and care for them in the producer’s facilities. The producer is paid 

a fee for the service provided. Contractors typically furnish inputs for growers, provide technical assistance, and assemble the commodity to pass on for fi nal processing or marketing. 

Contractors often market hogs through marketing contracts or other arrangements with packers 

or processors. Packers or processors also act as contractors and have production contracts 

directly with producers.

The data summarized in this report targeted farms with 25 or more hogs on the operation at any 

time during the year regardless of who owned the hogs. Therefore, the survey samples included 

operations where hog producers own their hogs as well as contract grower operations that are 

producing hogs owned by a contractor. Contractors are often large conglomerate or corporate 

organizations that contract with many growers to produce hogs. For example, Smithfi eld Foods, 

a packing company, was by far the largest contractor in 2009 with more than 900,000 sows 

(Successful Farming, 2010). In the survey data, information about the hogs owned by contractors such as Smithfi eld Foods is collected by contacting their contract growers. 

Hog industry surveys can have different target populations and hence provide complementary, 

rather than duplicate, information. For example, data reported by Boessen et al. (2004) and 

Lawrence and Grimes (2001) are based on a survey of packers and other hog owners, who may 

have hogs on many different contract farms. The ARMS data are derived from a survey of sites 

with hog production facilities, which include farms with hogs under contract, farms owned 

by contractors, and independent operations that grow their own hogs and sell them locally or 

directly to packers.

NASS data show 8,150 fewer hog owners than hog producers (locations with hogs) in 2009, 

indicating that several hog owners had hogs on multiple operations. The hog inventory was also 

heavily concentrated among the largest owners, as those with 5,000 head or more owned 81 

percent of the U.S. total. Of these, the largest 130 hog owners, those with 50,000 or more head, 

owned 57 percent of the inventory. 

Hog producers Hog owners

Head Operations Share of inventory Operations Share of inventory

Number Percent Number Percent

1-99 50,400 0.9 50,370 0.9

100-499 6,100 2.3 5,370 2.2

500-999 3,200 3.3 2,050 2.2

1,000-1,999 3,440 7.5 1,900 4.0

2,000-4,999 5,250 24.0 2,200 9.7

5,000 or more 2,950 62.0 1,410 81.0

 U.S. total 71,450 100.0 63,300 100.0

Source: USDA, ERS using data from USDA, NASS, February, 2010.
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Types of Hog Producers

The traditional approach of farrow-to-fi nish production—where breeding and gestation, farrowing, 

nursery, and fi nishing phases of production are performed on one operation—is being replaced 

by operations that specialize in a single production phase (see box, “A Primer on U.S. Hog 

Production”). In 1992, more than 50 percent of U.S. hog operations used the farrow-to-fi nish 

approach (fi g. 2). By 2009, less than 25 percent were farrow-to-fi nish producers. In contrast, hog 

operations specialized in fi nishing hogs (feeder-to-fi nish) accounted for less than 20 percent of hog 

producers in 1992 but nearly 50 percent in 2009. Growing numbers of operations specializing in 

farrowing (farrow-to-wean) and the raising of weanlings (wean-to-feeder) provide further evidence 

of changing approaches to hog production.1 These highly specialized operations, rarely reported in 

surveys prior to 2004, accounted for 11 percent of hog operations in 2009 (table 1). These specialized operations were also more likely to be producing hogs under contract (see glossary) than were 

farrow-to-fi nish farms.

The trend toward specializing in individual production stages is apparent in the relative number of 

years in business. Farrow-to-fi nish producers had been in business an average of 26 years in 2009, 

compared with less than 20 years for specialized farrowing, weanling, and fi nishing operations. 

Average operator age was also higher on farrow-to-fi nish farms, with a greater share of these operators (20 percent) over age 65 than on more specialized hog farms (11 percent).

Increasing specialization in hog production is also indicated by how important the hog enterprise 

is to the farm operation. Farrowing and weanling production occurred on farms with an average of 

$1 million and $830,000 respectively, of farm product value in 2009. Of that total, hog production 

1Specialized farrowing and weanling rearing operations provide feeder pigs to feeder-to-fi nish operations that fi nish 

hogs to a market weight. Hog-fi nishing operations may also obtain feeder pigs from other countries, mainly from Canada 

(USDA, ERS, 2012).

A Primer on U.S. Hog Production

The production of hogs to be slaughtered for pork is a process involving four phases: (1) 

breeding and gestation (breeding females and their maintenance during the gestation period), 

(2) farrowing (birth of baby pigs until weaning), (3) nursery (care of pigs immediately after 

weaning until about 30 to 80 pounds), and (4) fi nishing (feeding hogs from 30 to 80 pounds 

to a slaughter weight of 225 to 300 pounds). Hog producers are commonly classifi ed by the 

number of production phases conducted on the operation into either: (1) farrow-to-fi nish (all 

four phases), (2) farrow-to-feeder (phases 1, 2, and 3), (3) feeder-to-fi nish (phase 4), (4) weanling-to-feeder (phase 3), and, (5) farrow-to-weanling (phases 1 and 2). 

Most U.S. hog production historically occurred on farrow-to-fi nish operations in areas with an 

abundant supply of corn and soybeans. Hog farmers typically fed their hogs crops grown onsite 

and then sold their hogs at local markets. Beginning in the 1970s, hog production transitioned 

into partial or totally confi ned housing. Since then, advances in technology and management 

have made a science of hog production in large specialized buildings staffed with specialized 

labor. As part of the restructuring of hog production, operations became more specialized, 

typically conducting only a single phase of production before the hogs are moved to another 

operation or to market.
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U.S. Hog Production From 1992 to 2009: Technology, Restructuring, and Productivity Growth, ERR-158

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accounted for 84 percent of the value on farrow-to-wean operations and 76 percent on wean-tofeeder operations.2 Hog fi nishing (feeder-to-fi nish) occurred on farms with an average production 

value of over $1.2 million in 2009 (71 percent from hogs). Farm product value on farrow-to-fi nish 

operations was $609,000 (58 percent from hogs) in 2009. Despite producing many more hogs, the 

hog producers that specialized in individual production phases generally had much less acreage than 

farrow-to-fi nish farms (table 1).3

More than 60 percent of all hog operations in 2009 were located in the Heartland (fi g. 3), but the 

prevalence of different types of hog producers varies by region.4 For example, farms that fi nished 

hogs (farrow-to-fi nish and feeder-to-fi nish) were more often located in the Heartland where abundant feed supplies, primarily corn and soybeans, are available to fi nish hogs. Many farms that 

specialized in growing nursery pigs (wean-to-feeder) were located in the Southern Seaboard (23 

2Hog producers often do not realize the value of production (net of production expenses) as farm income; in particular, 

contract growers receive fees for the growing services that are well below the value of the hogs when sold by the owner 

(see section titled Business Organizations). Contact growers are a large part of the specialized hog producer types surveyed in the ARMS.

3This is not to say that farrow-to-fi nish operations more often use the land directly for hog production, rather that 

farrow-to-fi nish operations have more land available to produce crops for hog feed and to dispose of hog manure than do 

other types of hog operations.

4 These regions, constructed by the Economic Research Service, depict geographic specialization in the production of 

U.S. farm commodities.

Figure 2

Hog operations by type, 1992 to 2009

Source: 1992 Farm Costs and Returns Survey; 1998, 2004, and 2009 Agricultural Resource Management Survey.

Farrow-to-finish operations declined from more than 50 percent of operations to 23 percent, 

while specialized finishing operations went from 19 to 47 percent.

Percent of hog operations

Farrow-to-finish

Feeder-to-finish

0

10

20

30

40

50

60

1992 1998 2004 2009
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Table 1

Characteristics and practices by type of hog producer, 2009

Item

Farrowto-fi nishFarrowto-feederFeederto-fi nishFarrowto-weanWeanto-feederAll 

producers

Characteristics:

 Percent of farms1 24 5 47 4 7 100

 Percent using contracts2 1 9 74 46 98 48

 Years in hog business 26 22 16 17 19 19

 20 yrs. or more (percent3) 70 44 32 28 9 41

 Operator age (years) 55 53 51 51 52 52

 65 or older (percent3) 20 18 11 9 8 14

 College degree (percent3) 19 21 20 24 23 21

 Location (percent3)—

 Heartland 56 12 76 50 60 62

 Northern Crescent 16 22 9 7 7 11

 Eastern Uplands 4 15 1 26 6 4

 Southern Seaboard 5 8 9 7 23 10

 Western regions4 19 42 5 10 4 13

 Farm Production ($1,000) 609 208 1,260 1,040 832 938

 Percent from hogs 58 78 71 84 76 70

 Farm acres operated 811 213 685 446 451 662

 Percent totally from hogs5 12 26 14 30 21 16

 Percent with no cropland3 11 28 14 24 19 15

Practices:

 Facility age (years)—

 Farrowing 21 14 na 12 na 16

 Nursery 17 13 na na 11 12

 Finishing 18 na 11 na na 12

 Farms (percent reporting6)

 Artifi cial insemination 20 38 na 87 na na

 Terminal crossbreeding 30 23 na 52 na na

 Commercial seed stock 8 16 na 49 na na

 Genetics company 29 39 na 64 na na

 Phase feeding 44 na 73 na na na

 All-in/all-out farrowing 58 35 na 56 na na

 All-in/all-out nursery 46 31 na na 87 na

 All-in/all-out fi nishing 34 na 84 na na na

Notes: “na” indicates not applicable. 

1Sum of percent of farms does not equal 100 because some farms could not be classifi ed by type.

2Percent of farms using production contracts.

3Percent of farms.

4Includes the Prairie Gateway, Northern Great Plains, and Basin and Range regions (see fi g. 3).

5Percent of farms where the value of farm production was totally from hogs.

6Some producers refused to respond or did not know the answer to a question. These fi gures are based on the percent 

of total producers who responded, excluding nonresponse.

Source: USDA, ERS using data from the 2009 Agricultural Resource Management Survey.
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percent of such farms). Farrow-to-feeder operations were prominent in the West (42 percent), 

suggesting that many of the weanling and feeder pigs produced in other regions are then transported 

to the Heartland for fi nishing.5

The technologies and practices used by the different types of hog producers varied widely. Age of 

facilities is an indicator of the technology employed. On average, hog operations specializing in 

individual production phases tended to have newer hog production facilities in 2009 than did the 

farrow-to-fi nish operations (table 1). Nursery and fi nishing facilities were also of a more recent 

vintage among the specialized weanling and fi nished hog producers. In addition, specialized 

farrowing, weanling, and fi nished hog producers were more likely to use improved technologies such 

as artifi cial insemination, terminal crossbreeding, commercial seedstock, and all-in/all-out management (see glossary).

5 For example, Iowa included 17 percent of the breeding hog inventory in December 2009, but 30 percent of the market 

hog inventory (USDA, NASS, Dec. 2009). Some of the additional market hog inventory in Iowa and other States is from 

feeder pigs imported from Canada (USDA, ERS, 2012).

Figure 3

Farm resource regions

Note: The percent of hog producers in each farm resource region is shown in table 1.

Source: USDA, Economic Research Service.

Hog finishing is primarily done in the Heartland where abundant feed supplies, particularly 

corn, are available. Many farms specialized in weanling and feeder pig production are in other 

regions, mainly the Eastern Uplands and Southern Seaboard.

Northern Crescent 

Mississippi Portal

Eastern Uplands

Fruitful Rim

Southern 

Seaboard

Heartland

Prairie Gateway

Northern Great 

Plains

Basin and Range
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The remainder of this report describes the structure and productivity of farrow-to-fi nish and feederto-fi nish hog operations. These operations accounted for more than 70 percent of U.S. hog farms 

in 2009, and suffi cient data are available to evaluate the structural and productivity trends of these 

farms from 1992 to 2009. Summaries of each data year are used to describe hog farm differences 

by producer type according to size, business organization, region, and production technology. 
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Changing Structure of Hog Production

Size of Operations

The size of U.S. hog operations has changed dramatically during the past two decades. While the 

number of all farms in the United States remained fairly constant, the number of hog farms fell by 

about 70 percent between 1992 and 2009, from over 240,000 to about 71,000.6 Despite fewer hog 

farms, the Nation’s hog inventory was stable during the period, averaging about 60 million head, 

with cyclical fl uctuations between 56 and 68 million head (USDA, NASS, 1995-2009 and March 

2010). Thus, hog production consolidated considerably as fewer and larger farms accounted for an 

increasing share of total output. From 1992 to 2009, the share of the U.S. hog and pig inventory on 

farms with 2,000 head or more increased from less than 30 percent to 86 percent (fi g. 4). In 2009, 

farms with 5,000 head or more accounted for 61 percent of all hogs and pigs.7

Changes in the size of operations varied dramatically across different types of hog producers. The 

average size of farrow-to-fi nish operations grew 66 percent between 1992 and 2004, but then grew 

170 percent from 2004 to 2009, increasing to 3,980 head (table 2). Specialized hog-fi nishing opera6Hog farms in this case refer to any place having one (or more) hog or pig on hand on December 31.

7Hog inventory is the number of hogs and pigs on an operation at a point in time. Often this is the beginning or end of a 

year, but may refer to the maximum number on the operation at any time during a year. In contrast, hog production refers 

to the fl ow of hogs on and off the operation during a year. 

Figure 4

U.S. hog and pig inventory on the largest operations, 1992 to 2009

Source: USDA, NASS, December 1995-2009 and March 2010. 

Operations with 5,000+ head were not reported in 1992.

Farms with 2,000 head or more accounted for 86 percent of the total U.S. hog and pig inventory 

in 2009, up from 28 percent in 1992.

Percent of inventory

+ operations with 2,000+ head operations with 5,000+ head

0

10

20

30

40

50

60

70

80

90

100

1992 1998 2004 2009
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tions were more than fi ve times larger in 2004 than in 1992, and then grew another 80 percent 

between 2004 and 2009. The share of U.S. market hog production from farrow-to-fi nish operations 

decreased considerably from 1992 to 2004, but stabilized between 2004 and 2009. The increased 

size of farrow-to-fi nish operations from 2004 to 2009 compensated for the decline in the number 

of operations, so that the share of market hog sales from farrow-to-fi nish operations was up slightly 

in 2009 from 2004. Despite this rise, most market hog production takes place on feeder-to-fi nish 

operations. These operations accounted for more than 70 percent of market hog sales and contract 

removals in 2004 and 2009 (table 2).

As hog farm size increased, so did specialization in hog production. For farms with more than 25 

hogs, farm product value from hogs increased from 46 percent of total farm production value in 

Table 2

Structural characteristics by type of hog producer, 1992-2009

Producer/Item 1992 1998 2004 2009

Farrow-to-fi nish

 Operations1 (percent of operations) 54 49 31 24

 Market hogs sold/removed1 (percent of hogs) 65 38 18 20

 All hog sales/removals (head per farm) 886 1,239 1,472 3,980

 Contract operations (percent of operations) * * * 1

 Contract production (percent of hogs) * * * 4

 Farm product value from hogs (percent) 48 47 59 58

 Farm-grown grain fed (percent of feed fed) 55 51 38 47

Feeder-to-fi nish

 Operations1 (percent of operations) 19 31 40 47

 Market hogs sold/removed1 (percent of hogs) 22 55 77 73

 All hog sales/removals (head per farm) 804 2,756 4,730 7,222

 Contract operations (percent of operations) 11 34 50 74

 Contract production (percent of hogs) 22 62 73 79

 Farm product value from hogs (percent) 35 54 72 71

 Farm-grown grain fed (percent of feed fed) 45 22 15 18

All hog and pig producers

 Operations1 (percent of operations) 100 100 100 100

 Market hogs sold/removed1 (percent of hogs) 100 100 100 100

 All hog sales/removals (head per farm) 945 2,589 4,646 8,389

 Contract operations (percent of operations) 3 15 28 48

 Contract production (percent of hogs) 5 40 67 71

 Farm product value from hogs (percent) 46 56 67 70

 Farm-grown grain fed (percent of feed fed) 49 35 19 26

Notes: * indicates less than 1 percent. 

1The sum of operations and sales/removals for the producer types will not equal 100 percent because not all producer 

types are shown (see table 1).

Source: USDA, ERS using data from the 1992 Farm Costs and Returns Survey and 1998, 2004, and 2009 Agricultural 

Resource Management Surveys.
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1992 to 70 percent in 2009. At the same time, farm-grown grain fed to hogs, as a share of total hog 

feed, declined nearly 25 percent as more hog feed was obtained from off-farm sources.8

Data from the 2009 ARMS show that average hog production costs are negatively correlated with 

operation size, particularly among farrow-to fi nish operations (fi g. 5).9 The greatest difference in 

costs was between the smallest two sizes of farrow-to-fi nish operations, where average costs were 42 

percent lower among operations with 500-1,999 head than for operations with fewer than 500 head. 

There were also signifi cant cost differences between the largest two sizes of farrow-to-fi nish operations, where per-unit costs were 22 percent lower among operations with 5,000 head or more than 

for operations with 2,000-4,999 head. The largest farrow-to-fi nish operations were much larger than 

other farrow-to-fi nish operations, with an average production of 46,000 market hogs compared with 

about 4,500 head from operations in the 2,000-4,999 head group. 

8Much of the changes in size, specialization, and farm-grown grain fed are associated with the growth of contract hog 

production, which is discussed in the next section.

9Hog production costs are computed using the ARMS data and secondary data on feed, labor, capital, and other production input prices (see http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx). Average production 

costs refer to operating and ownership costs, defi ned in the glossary.

Figure 5

Cost of production by producer type and size, 2009

Source: 2009 Agricultural Resource Management Survey.

Average operating and ownership costs declined as size increased, especially among 

farrow-to-finish producers.

Dollars per cwt

Farrow-to-finish

Feeder-to-finish

Largest inventory on operation

30

40

50

60

70

80

90

100

Fewer than

500 head

500-1,999

head

2,000-4,999

head

5,000 head

or more
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The cost-size relationship on farrow-to-fi nish operations likely contributed to the shift to much larger 

operations between 2004 and 2009. Also, prices for corn and soybeans, the major components of 

hog feed, rose signifi cantly in 2007 and 2008. Corn prices moved to over $3.00 per bushel (from 

about $2.00 in 2005 and 2006) in 2007 and reached more than $5.00 per bushel in 2008, while 

soybean prices reached more than $13.00 per bushel in 2008, more than double its price of about 

$6.00 per bushel in 2005 and 2006 (USDA, NASS, Agricultural Prices). High feed prices were an 

incentive for small, high-cost farrow-to-fi nish operations to exit the industry (perhaps to concentrate 

on crop production), resulting in the shift to much larger farrow-to-fi nish operations between 2004 

and 2009. 

Production costs varied much less among feeder-to-fi nish than among farrow-to-fi nish operations 

(fi g. 5). Average production costs of feeder-to-fi nish operations declined with size by 23 percent 

from the smallest to the largest operations in 2009, but declined little for operations with 2,000 head 

or more. Also, most market hogs on feeder-to-fi nish operations were produced under contract.10 

There is evidence that large contract operations had lower exit rates than similar non-contract operations between 2002 and 2007 (Key, 2013). Large contract growers, because they obtain much of 

their feed from contractors and because their compensation does not depend directly on hog prices, 

are better positioned than most non-contract producers to manage the input and output price risks of 

hog production.

Business Organization

Changes in the scale of hog production have been made possible, in part, by changes in the organizational structure of hog operations, as evident in the substantial growth of contract production (see 

glossary). Production contracts govern the relationship between growers (hog producers) and hog 

owners (“integrators,” or “contractors”), specifying the inputs provided by each party (feeder pigs, 

feed, labor, capital, energy, transport, and veterinary services and supplies) and the compensation 

due to each. Contractors typically retain ownership of the hogs on contract operations and provide 

the feed fed to the hogs. Growers typically provide the production facilities and labor, and are 

compensated based on a fee-for-service arrangement. 

Such arrangements allow individual contractors to grow into substantial operations because the 

signifi cant capital costs of hog production facilities are borne by contract growers. In 2009 and 

2010, the three largest contractors owned about a quarter of the national sow herd (Successful 

Farming, 2010). Many of the largest contractors are also pork packers that are vertically integrated, 

obtaining hogs under production contracts directly with growers. Contract growers obtain economies of size by specializing in a single phase of production, and benefi t from reduced exposure to 

changes in hog and feed prices.11

Marketing contracts differ from production contracts, and typically govern the relationship between 

hog owners and hog packers. Marketing contracts specify expected hog quantities and qualities, the 

location and timing of delivery, and compensation, expressed as a hog price or a price formula. The 

same hog produced under a production contract between a contractor and grower can be sold to a 

10Many of the production costs on contract operations were paid by the contractors. Feed and other input costs were 

obtained from information provided by contractors. Nursery and feeder pig costs were calculated using prevailing pig 

prices in 2009 (USDA, NASS, Agricultural Prices). 

11However, growers do face the risk of contractors failing or refusing to place pigs on their operations if there is a downturn in demand for pork products.
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packer under a marketing contract between the contractor and a packer. In this report, contract operations refer to production contracts because the focus is on the growing stage, not on packer procurement (see box, “Hog Producers and Hog Owners”). 

Hog operations with production contracts accounted for only 3 percent of overall U.S. hog operations and 5 percent of U.S. hog production (sales and removals) in 1992, but grew to 48 percent of 

operations and 71 percent of production by 2009 (table 2). Three-fourths of feeder-to-fi nish operations and nearly 80 percent of production on feeder-to-fi nish farms were under production contracts 

in 2009. Contract production had been virtually nonexistent among farrow-to-fi nish farms in years 

prior to 2009, but accounted for 4 percent of production in 2009.

The average size of hog fi nishing operations increased fastest from 1992 to 2004 for those producing 

under contract (fi g. 6). Contract feeder-to-fi nish operations averaged about 1,000 more head 

produced in 1992 than did non-contract operations. By 2004, the difference had reached 4,500 

head. Between 2004 and 2009, the increasing size of contract operations slowed, while the average 

size of non-contract hog fi nishing operations more than doubled from about 2,500 head to more than 

5,400 head. 

As with farrow-to-fi nish operations, high feed prices during 2008-09 created an incentive for small 

higher-cost hog fi nishing operations to exit the hog industry, and may underlie the shift to much 

larger non-contract feeder-to-fi nish operations by 2009. Many small non-contract hog fi nishing 

operations also produce corn and soybeans and with historically high crop prices during 2008-09 

they may have decided to sell crops directly as opposed to feeding hogs. In 2009, hog fi nishing 

Figure 6

Size of feeder-to-finish operations by business arrangement, 1992 to 2009

Source: 1992 Farm Costs and Returns Survey; 1998, 2004, and 2009 Agricultural Resource Management Survey.

Average size of contract hog finishing operations was significantly greater than for non-contract hog 

finishing operations in each year, but the difference narrowed in 2009 as the size of non-contract 

operations grew more rapidly between 2004 and 2009.

Head of hogs sold/removed per farm

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Contract operations Non-contract operations

1992

1998

2004

2009

2009

2004

1992

1998
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operations producing under contract were still much larger than non-contract operations, but the 

difference in size had narrowed from about 4,500 head in 2004 to less than 2,500 head (fi g. 6). 

Contract hog fi nishing operations were less affected by higher feed prices, possibly because of their 

larger size and lower production costs, or because large contractors are less exposed to input price 

risk.

In 2009, the average farm value of production (for all commodities produced) on contract feeder-tofi nish operations was nearly $300,000 greater than on non-contract operations (fi g. 7). The average 

value of hogs produced on contract operations was about $400,000 more than what was sold from 

non-contract operations. However, average net farm income on non-contract operations was about 

$60,000 higher than on contract operations. Much of farm income on contract operations was 

earned from fees paid by contractors, comprising a small percentage of the value of hogs produced. 

Despite having smaller operations, noncontract producers retained the value of hogs sold plus earned 

high prices for any crops produced and sold.

Regional Profi le

Geographical shifts in hog production have accompanied the structural and organizational changes 

in the industry. Historically, hog production was concentrated in the Heartland (see fi g. 3), where an 

abundant supply of corn and soybeans provided a cheap source of hog feed. During the 1980s and 

1990s, hog production grew dramatically in nontraditional areas, driven mainly by the growth of 

large contract operations (Kliebenstein and Lawrence, 1995; Rhodes, 1995). For example, in North 

Carolina the inventory of hogs and pigs more than doubled between 1987 and 1992, as the State’s 

rank in total hog inventory went from sixth to second, and then more than doubled again between 

Figure 7

Farm value of production and farm income, feeder-to-finish operations, 2009

Source: 2009 Agricultural Resource Management Survey.

Average farm and hog values of production were greatest on contract operations in 2009, but gross 

and net farm incomes were greater on non-contract feeder-to-finish operations.

1,000 dollars

Contract 

operations

Non-contract

operations

0 250 500 750 1,000 1,250 1,500

Net farm income Gross farm income

Hog value of production Farm value of production
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1992 and 1998 (fi g. 8). Between 1992 and 2004, hog production also moved aggressively into 

Western States where the combined inventory of Oklahoma, Colorado, Texas, and Utah grew from 

1.2 million to 4.9 million head.

Rapid growth in the North Carolina hog industry ended after a State law enacted in August 1997 

placed a moratorium on the construction of new and expanded hog operations with 250 or more hogs 

(North Carolina General Assembly, 1997). The purpose of the moratorium was to provide State and 

local government time to adopt zoning ordinances and gather information on environmental impacts 

and alternative waste management technologies. Restricted growth in North Carolina may help 

explain the industry growth in Western States between 1992 and 2004. Open space and a relatively 

low population density in these States provide greater fl exibility in managing animal waste. As the 

North Carolina moratorium continued through the 2004-2009 period, Iowa may have benefi ted as 

much of the hog industry growth during 2004-09 was in Iowa (fi g. 8). The hog inventory in Iowa 

grew by 2.7 million head, or 17 percent, from 2004 to 2009.

Average production (sales and contract removals) per farm from Heartland hog operations grew 

steadily from just under 1,000 head in 1992 to more than 7,500 head in 2009 (table 3). Southern 

Seaboard operations (see fi g. 3) increased average production per farm from 1,200 to nearly 20,000 

head over that span, while in the Western region average production grew from 700 to more than 

6,000 head per farm.12 Average production by farrow-to-fi nish operations grew substantially in all 

regions from 1992 to 2009, up fi ve-fold in the Heartland and 12 times higher in the West. Feeder-to12Average size of operations in the Southern Seaboard is much larger than in the other regions partly because many 

of these operations specialize in a single production phase. The turnover of hogs from specialized operations is much 

higher than for farrow-to-fi nish operations, so hog/pig sales and removals are much higher.

Figure 8

Hog inventories in selected States, 1992 to 2009

Source: USDA, NASS, December 1995-2009 and March 2010.

Hog numbers grew rapidly in North Carolina between 1992 and 1998, but little since 1998. 

Hog numbers in Iowa grew significantly between 2004 and 2009.

Million head of hogs

0

2

4

6

8

10

12

14

16

18

20

1992 1998 2004 2009

Iowa

North

Carolina

Oklahoma, Colorado, Texas, and Utah
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fi nish operations also grew substantially in the Heartland and West regions, but average production 

per farm on operations in the Southern Seaboard remained much the same between 1998 and 2009, 

partly due to the North Carolina moratorium.

In contrast to earlier periods, farrow-to-fi nish operations in all regions grew much more from 2004 

to 2009 than did specialized hog fi nishing operations (table 3). Average production per farm from 

farrow-to-fi nish operations in 2009 was more than two times higher in the Heartland, more than 

three times higher in the Southern Seaboard, and more than fi ve times higher in the West than in 

2004. This growth is partly the result of small farrow-to-fi nish operations exiting the industry 

when confronted with much higher corn and soybean prices. Market hog prices were less than $50 

per hundredweight during much of this period, creating a cost-price squeeze that would have been 

hardest on small, higher-cost producers.13 Also, new farrow-to-fi nish farms starting during this 

period would most likely have been large operations able to take advantage of economies of size.

The increasing size of feeder-to-fi nish farms accompanied rapid growth in regional contract production on these operations. The share of hogs fi nished under contract in the Heartland increased from 

only 4 percent in 1992 to more than 70 percent in 2009 (fi g. 9). Contract production in the Southern 

Seaboard increased from 12 percent in 1992 to virtually all market hogs produced in 2004 and 2009. 

The 1992 survey did not measure any contract production of market hogs in the West, but by 2009 

more than 80 percent were produced under contract.

Technologies

Like contract production, technological innovation has facilitated change in hog production. 

Technological innovation in hog production includes advances in genetics, nutrition, housing and 

13Breakeven on the total costs for market hog production (feeder-to-fi nish) have been above $50 per cwt since 2005 

(USDA, ERS, 2013).

Table 3

Regional hog and pig sales and contract removals by type of hog producer, 1992-2009

Producer/Item 1992 1998 2004 2009

Farrow-to-fi nish

 Heartland 901 1,288 1,851 4,482

 Southern Seaboard 1,093 1,163 1,068 3,548

 Western regions1 621 1,305 1,459 7,660

Feeder-to-fi nish

 Heartland 833 1,972 4,152 7,126

 Southern Seaboard 1,035 10,951 12,057 11,180

 Western regions1 358 3,589 3,255 7,841

All hog and pig producers

 Heartland 975 2,098 5,106 7,549

 Southern Seaboard 1,206 10,021 13,995 19,952

 Western regions1 702 2,231 1,859 6,232

1Includes the Prairie Gateway, Northern Great Plains, and Basin and Range regions (see fi g. 3). Source: USDA, ERS 

using data from the 1992 Farm Costs and Returns Survey and 1998, 2004, and 2009 Agricultural Resource Management 

Surveys.
18

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handling equipment, veterinary and medical services, and management that improves the performance of hogs and the effi ciency of the operation and/or reduces production risk. 

Data from USDA’s National Animal Health Monitoring Service (NAHMS) surveys conducted in 

1990, 1995, 2000, and 2006 indicate change in technological innovation on hog operations with 100 

or more head (USDA, APHIS, 2008). For example, artifi cial insemination (AI) improves the genetic 

potential of the swine herd and the conception rates of breeding animals. The share of farrowing 

hog operations using AI increased from 7 to 23 percent between 1990 and 2000, and reached about 

40 percent in the 2006 NAHMS data. Another innovative practice to enhance productivity, all-in/

all-out housing management, commingles pigs of a similar age and weight and keeps the entire 

group together as it moves through each production phase. The hogs are marketed a room or 

group at a time, and rooms are washed and disinfected after each group leaves. The NAHMS data 

revealed that the use of all-in/all-out management for fi nishing hogs increased from 25 percent of 

hog operations in 1990 to 71 percent in 2006. 

Both the 2004 and 2009 ARMS collected information about AI, all-in/all-out management, and 

other practices, including terminal crossbreeding programs, phase feeding, and feeding antibiotics 

by purpose (see glossary). The number of farrow-to-fi nish operations using AI, terminal crossbreeding, and all-in/all-out farrowing and fi nishing increased between 2004 and 2009 (table 4). 

Among feeder-to-fi nish operations, phase feeding and all-in/all-out fi nishing increased between 

2004 and 2009.

Figure 9

Market hogs removed under contract by region, feeder-to-finish operations, 1992 to 2009

Source: 1992 Farm Costs and Returns Survey; 1998, 2004, and 2009 Agricultural Resource Management Survey.

The use of production contracts for finishing hogs increased significantly in the Heartland and Western regions 

from 2004 to 2009.

Percent of market hogs

1992

1992

1998

1998

1998

2004

2004

2004

2009

2009

2009

0

20

40

60

80

100

Heartland Southern seaboard Western regions
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Larger farrow-to-fi nish farms more often used these practices than did smaller farms, as evident by 

the share of production on farms using these practices. For example, 20 percent of farrow-to-fi nish 

farms used AI in 2009, but these farms accounted for 84 percent of farrow-to-fi nish production. The 

share of farrow-to-fi nish farms using any one of the following technologies—AI, terminal crossbreeding, phase feeding, or all-in/all-out management—was at 50 percent or below in both 2004 

and 2009, but a decided majority of farrow-to-fi nish production occurred on farms using these practices in both years. These practices were widely used on feeder-to-fi nish farms and accounted for a 

majority of production in both 2004 and 2009.

Antibiotic Use and Sanitary Practices

Antibiotics are fed to hogs at subtherapeutic levels for disease prevention and growth promotion 

(see box, “Subtherapeutic Antibiotics in Hog Production”). These antibiotics may be promoting 

the development of antimicrobial drug-resistant bacteria, prompting concerns that this resistance 

can spread to bacteria that infect humans (Nature, 2012; USGAO, 2011). In 2012, the U.S. Food 

and Drug Administration implemented a voluntary strategy to promote the judicious use of antibiotics that excluded antibiotics used for growth promotion (USFDA, 2012). In a survey of meat 

Table 4

Technologies and practices used on hog farms, by type of hog producer, 2004 and 2009

Percent of farms 

reporting1

Percent of production 

on reporting farms1

Producer/Item 2004 2009 2004 2009

Farrow-to-fi nish

 Artifi cial insemination 12 20 62 84

 Terminal crossbreeding 22 30 52 64

 Phase feeding 48 44 67 66

 All-in/all-out farrowing 43 50 70 66

 All-in/all-out fi nishing 20 34 60 84

 Antibiotics fed to nursery pigs for2:

 Growth promotion 38 31 53 40

 Disease prevention 62 55 67 60

 Antibiotics fed to fi nishing hogs for2:

 Growth promotion 43 23 59 40

 Disease prevention 38 35 51 45

Feeder-to-fi nish

 Phase feeding 67 73 71 75

 All-in/all-out fi nishing 79 84 88 84

 Antibiotics fed to fi nishing hogs for3:

 Growth promotion 42 35 52 38

 Disease prevention 58 49 64 50

1Some producers refused to respond or did not know the answer to a question. These fi gures are based on the percent 

of producers who responded, excluding nonresponse.

2Nonresponse in 2004 was less than 1 percent for both nursery pig and fi nishing hogs. Nonresponse in 2009 was 

about 14 percent for nursery pigs and less than 5 percent for fi nishing hogs.

3Nonresponse in 2004 was less than 5 percent. Nonresponse in 2009 was between 20 and 25 percent.

Source: USDA, ERS using data from the 2004 and 2009 Agricultural Resource Management Surveys.
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consumers, 86 percent of respondents thought that meat raised without antibiotics should be available in their local supermarket. Among the 13 largest supermarket chains, 1 offers nothing but meat 

and poultry produced without antibiotics and most offer some such products at prices that are not 

prohibitively higher (Consumer Reports, 2012).

Analysis of the ARMS data suggests that the use of subtherapeutic antibiotics in hog production 

declined between 2004 and 2009, possibly in response to consumer interest in and retail demand 

for pork produced without antibiotics. Fewer farrow-to-fi nish and feeder-to-fi nish producers fed 

antibiotics for growth promotion and disease prevention in 2009 than in 2004. The share of farrowto-fi nish farms feeding antibiotics to nursery pigs declined 7 percentage points for both growth 

promotion and disease prevention (table 4), whereas the share feeding antibiotics to promote growth 

among fi nishing hogs declined 20 percentage points from 2004 to 2009. Among specialized hog 

fi nishers14, the share using antibiotics for growth promotion and disease prevention declined 7 and 

9 percentage points, respectively, between 2004 and 2009.15 The share of production from these 

14Nonresponse to the questions about antibiotic use was between 20 and 25 percent on feeder-to-fi nish farms in 2009, 

up from about 5 percent in 2004. Many nonrespondents produced hogs under contract and may not have known whether 

or not the feed provided by contractors included antibiotics.

15NAHMS data indicate a decline in feeding antibiotics for growth promotion to grower/fi nisher pigs of about 8 percentage points between 2000 and 2006 (USDA, APHIS, 2002 and 2009).

Subtherapeutic Antibiotics in Hog Production

Subtherapeutic levels of antimicrobial drugs have been fed to hogs to prevent disease, promote 

growth, and improve overall animal health since the 1950s. The productivity of major inputs 

used in swine production—feed, labor, and capital—can be improved on some operations by 

feeding antibiotics. Possible modes of action for antibiotics include (1) nutritional effects, (2) 

disease prevention effects, and (3) metabolic effects (Cromwell, 2002). Feed effi ciency can be 

increased by feeding low levels of antibiotics to improve nutrient absorption and depress the 

growth of organisms competing for nutrients. By suppressing disease-causing organisms in the 

animals’ environment, antibiotics may reduce the incidence of diseases that hinder growth and 

thus raise the effi ciency of labor and capital use. The 2004 ARMS data indicated a relationship 

between improved farm productivity and the feeding of subtherapeutic antibiotics to nursery 

pigs, but the impact of feeding antibiotics to fi nishing hogs was insignifi cant (McBride et al., 

2008). 

For many years, governmental and professional organizations have expressed concerns that the 

overuse of antimicrobial drugs in livestock production is promoting the development of antimicrobial drug-resistant bacteria (USFDA, 2012). Since many of the antibiotics commonly added 

to livestock feed and water are the same or similar to drugs used in human health care, the 

development of drug-resistant organisms would present a serious threat to public health. Such 

concerns prompted a European Union-wide ban on the use of antibiotics as growth promoters in 

2006. In the United States, the use of subtherapeutic antimicrobial drugs in hog production has 

recently come under intense scrutiny from public interest groups and the U.S. Food and Drug 

Administration (FDA). In April 2012, the FDA implemented a voluntary strategy to promote 

the “judicious use” of antibiotics in food producing animals (USFDA, 2012). Among other 

things, the FDA asked the pharmaceutical industry to remove antibiotics for “production uses” 

such as feed effi ciency and growth promotion from their FDA-approved product labels.
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farms declined even more, 14 percentage points for both antibiotic-fed growth promotion and disease 

prevention.

Much of the decline in antibiotic use has been among large hog producers. In 2004, nearly 60 

percent of market hog production from farrow-to-fi nish farms was fed antibiotics for growth 

promotion; by 2009, this was down to 40 percent (fi g. 10). Among feeder-to-fi nish operations, the 

use of antibiotics for growth promotion dropped from 52 to 38 percent of market hog production 

between 2004 and 2009. The share of market hogs fed antibiotics for disease prevention dropped 6 

percentage points from 2004 to 2009 on farrow-to-fi nish farms and 14 percentage points on feederto-fi nish farms.

Antibiotic use declined among most sizes of farrow-to-fi nish operations between 2004 and 2009, 

but the percentage point decline was much greater among the largest operations (table 5). The 

smallest farrow-to-fi nish operations (under 500 head) used antibiotics least in both 2004 and 2009. 

Antibiotic use on feeder-to-fi nish operations also declined the most among the largest operations. 

Between 2004 and 2009, antibiotic use increased only among the smallest feeder-to-fi nish operations, but antibiotic use was still lowest among the smallest producers in both 2004 and 2009. 

In addition to antibiotics, hog farmers use an array of strategies to prevent the emergence and spread 

of animal disease. Among these practices are restricting access (animals and humans) to production 

facilities, rodent control programs, bird proofi ng facilities, cleaning and disinfecting vehicles used to 

haul hogs, and preparing a written bio-security plan. It may be possible for sanitary practices like 

Figure 10

Antibiotics fed to market hogs, by use, 2004 and 2009

Source: 2004 and 2009 Agricultural Resource Management Surveys.

The percent of market hogs on operations feeding antibiotics for growth promotion and disease 

prevention declined from 2004 to 2009.

Percent of market hogs

0

10

20

30

40

50

60

70

2004

2009

for growth

promotion

for disease

prevention

for growth

promotion

for disease

prevention

2004

2009

2004

2004

2009

2009

Farrow-to-finish Feeder-to-finish
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these to at least partially offset the effect of restrictions that could be imposed on feeding antibiotics 

to hogs (MacDonald and Wang, 2011). 

The largest farrow-to-fi nish operations were also most likely to use farm sanitary practices, 

including restricting the access of birds and other animals to the hog production facilities, cleaning 

and disinfecting vehicles used to haul hogs, and having a written bio-security plan in place (table 

5). The striking differences in the use of antibiotics and sanitary practices between the largest and 

smaller farrow-to-fi nish operations may be related to hog volume. Operations in the 5,000-head-ormore group produced an average of nearly 46,000 head in 2010, compared with nearly 4,500 head in 

the next largest size group.

As with large farrow-to-fi nish operations, larger feeder-to-fi nish operations more often used several 

of the reported farm sanitary practices than did smaller operations. Most producers with 2,000 head 

or more restricted birds and other animals from the hog production facilities, cleaned and disinfected vehicles for hauling hogs, and had a written bio-security plan. However, the use of sanitary 

practices by feeder-to-fi nish operations varied much less across size groups than it did for farrow-tofi nish producers.

Table 5

Antibiotic use, 2004 and 2009, and sanitary practices, 2009, by size of operation

Producer/Item

Fewer than 

500 head

500-1,999 

head

2,000-4,999 

head

5,000 head 

or more

Percent of farms reporting1

Farrow-to-fi nish: nursery pigs

 Antibiotics for growth promotion: 2004 32 44 58 71

 Antibiotics for growth promotion: 2009 17 51 67 36

Farrow-to-fi nish: fi nishing hogs

 Antibiotics for growth promotion: 2004 39 45 62 71

 Antibiotics for growth promotion: 2009 9 39 59 48

Farrow-to-fi nish: 2009 sanitation practices

 Cats or livestock had access to facilities 74 71 37 10

 Rodent control program used 63 84 100 93

 Facilities bird proofed 11 39 60 81

 Clean and disinfected vehicles hauling hogs 24 41 60 90

 Written bio-security plan in place 8 16 26 75

Feeder-to-fi nish: fi nishing hogs

 Antibiotics for growth promotion: 2004 24 44 48 60

 Antibiotics for growth promotion: 2009 29 39 33 40

Feeder-to-fi nish: 2009 sanitary practices

 Cats or livestock had access to facilities 59 21 12 14

 Rodent control program used 66 87 90 95

 Facilities bird proofed 25 77 93 86

 Clean and disinfected vehicles hauling hogs 39 64 81 80

 Written bio-security plan in place 13 30 51 73

1Some producers refused to respond or did not know the answer to a question. These fi gures are based on the percent 

of total producers who responded, excluding nonresponse.

Source: USDA, ERS using data from the 2004 and 2009 Agricultural Resource Management Surveys.
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Improvements in Hog Farm Productivity

Input Productivity

Substantial increases in hog farm productivity have been driven by and also refl ect the industry’s 

pronounced structural changes. Economic competition and the incentive to maximize profi ts drive 

structural changes in the hog industry. If larger operations are more profi table than smaller ones, 

competitive pressures are expected to result in a larger average farm size in the long run. Similarly, 

operations that are fi rst to adopt a cost-saving technology, in regions with lower input costs, or 

closer to markets have a competitive advantage that makes them more likely to survive and grow. 

Relationships between farmers and processors also evolve to refl ect more cost-effective modes of 

production. Since 1992, the use of production contracts has increased dramatically. The organizational structure of the industry also refl ects effi ciency gains from increased specialization in the 

various phases of hog production on separate operations.

The average quantity of inputs used in production per unit of output illustrates how effi ciently individual factors of production are used on the farm. Such individual factor productivity measures 

allow for comparisons across regions or over time. ARMS collects detailed information about hog 

production, asking farmers about the amount and types of feed purchased, the amount of homegrown feed used, and hours spent working on the hog enterprise (both operator and paid/unpaid 

labor). ARMS also asks farmers about changes in their hog inventory and about the quantity and 

weights of hogs moved on and off the farm. This analysis measures output in terms of hog weight 

gain—the total weight added during the calendar year to born/purchased/placed hogs that were later 

sold/removed, plus the total weight added to the hog inventory. Hog weight gain—unlike the alternative output measure, number of head sold/removed—accounts for changes in inventory and for 

differences in the weights of feeder and fi nished pigs across operations.16

Before 2004, there were rapid increases in productivity on operations producing market hogs, especially on feeder-to-fi nish operations. Between 1992 and 2004 the average quantity of feed required 

per hundredweight of gain declined 14.9 percent (1.3 percent average annual decline)17 for farrowto-fi nish operations and 44.1 percent (4.7 percent annually) for feeder-to-fi nish operations (table 6). 

The average quantity of labor used per hundredweight declined even more—falling 52.5 percent (6.0 

percent annually) for farrow-to-fi nish operations from 1992 to 2004 and 83.1 percent (13.8 percent 

annually) for feeder-to-fi nish operations.

Since 2004, feed effi ciency gains have continued apace on farrow-to-fi nish operations but have 

slowed on feeder-to-fi nish operations. Between 2004 and 2009, the average quantity of feed used 

per hundredweight of gain declined 3.3 percent annually on farrow-to-fi nish operations but only 0.7 

percent on feeder-to-fi nish operations (table 6). Feed effi ciency increased (that is, feed conversion 

decreased) on feeder-to-fi nish farms by 44 percent between 1992 and 2004, but only about 3 percent 

from 2004 to 2009 (fi g. 11). On farrow-to-fi nish farms, feed effi ciency improved 15 percent from 

1992 to 2004, and nearly another 15 percent between 2004 and 2009.

16Each head produced represents approximately 2 cwt gain (250 pounds for a typical fi nished market hog minus 50 

pounds for a typical feeder pig). Therefore, ignoring losses due to animal mortality, a farm with an output of 6,000 cwt 

gain sells or removes 3,000 head per year. Assuming 3 hog cycles per year, annual production of 6,000 cwt implies an 

operation has an inventory of 1,000 head.

17All annual rates of change are computed using the compound annual growth rate.
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From 1992 to 1998, the labor hours required to produce a hundredweight of hogs declined substantially—about 73 percent on feeder-to-fi nish and nearly 36 percent on farrow-to-fi nish operations 

(table 6). Between 2004 and 2009, the rate of labor effi ciency gains slowed, with labor used per 

hundredweight of gain declining about 10 percent for both farrow-to-fi nish and feeder-to-fi nish 

operations (fi g. 12). 

Productivity gains contributed to a decline in production costs between 1992 and 2004 (table 6). For 

farrow-to-fi nish hog producers, average production costs per hundredweight of gain, expressed in 

2009 dollars, were 27 percent lower in 2004 than in 1992.18 This change amounts to a 2.6-percent 

average annual rate of decline. Infl ation-adjusted costs declined faster for feeder-to-fi nish hog 

producers, falling 43 percent between 1992 and 2004, or 4.5 percent annually.19

Substantial productivity gains continued after 2004 for farrow-to-fi nish operations: the nominal 

cost of producing a hundredweight of hogs was only about 3 percent higher in 2009 than in 2004, 

despite feed prices that increased more than 50 percent (table 6). After adjusting for price changes, 

production costs declined in real terms by nearly 30 percent. In contrast, nominal production costs 

for feeder-to-fi nish operations increased 41 percent from 2004 to 2009; after adjusting for price 

changes, production costs declined 5 percent over this span.

Sources of Productivity Growth

Increases in input effi ciency and declining average costs illustrate the magnitude of the productivity 

gains in the hog sector. Sources of this productivity growth are examined by estimating changes in 

18Feed costs are defl ated to 2009 dollars using the national agricultural feed price index; other input costs are defl ated 

to 2009 dollars using the national agricultural production items index (USDA, NASS, Agricultural Prices). 

19The increased labor productivity impact on production costs has been, to some extent, offset by higher wages paid to 

hired workers on larger and technologically advanced farms (Yu et al., 2012).

Table 6

Effi ciency and production costs per hundredweight (cwt) by type of hog producer, 

1992-2009

Producer/Item 1992 1998 2004 2009

Farrow-to-fi nish

 Feed conversion rate (lbs per cwt gain) 416 374 354 300

 Labor rate (hrs per cwt gain) 1.13 0.72 0.54 0.48

 Production costs, nominal dollars1 46.63 43.50 42.44 43.86

 Production costs, 2009 dollars1 85.89 71.59 62.36 43.86

Feeder-to-fi nish

 Feed conversion rate (lbs per cwt gain) 383 282 214 207

 Labor rate (hrs per cwt gain) 0.89 0.24 0.15 0.12

 Production costs, nominal dollars1 37.54 31.08 26.59 37.62

 Production costs, 2009 dollars1 69.22 51.35 39.69 37.62

1Production costs are the sum of operating and ownership costs less costs for feeder and nursery pigs. Pig costs are 

excluded because they are not an input contributing to weight gain. 1992, 1998, and 2004 feed costs are defl ated to 

2009 dollars using the national agricultural feed price index; other costs are defl ated to 2009 dollars using the national 

agricultural production items index (USDA, NASS, Agricultural Prices). In 2009, feed costs accounted for 58 percent of the 

costs of farrow-to-fi nish production and 74 percent of the costs of feeder-to-fi nish production.

Source: USDA, ERS using data from the 1992 Farm Costs and Returns Survey and 1998, 2004, and 2009 Agricultural 

Resource Management Surveys.
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total factor productivity (TFP)—an aggregate measure of productivity that refl ects how effi ciently 

inputs are converted into outputs. A farm’s TFP will refl ect the production technology it uses (which 

determines the rate at which inputs can be combined to make outputs), whether it is operating at an 

effi cient scale of production, how effi ciently inputs are combined given the production technology 

available, and how well the farmer takes into account the relative prices of inputs. 

The production technology used by a farm is a fundamental determinant of its productivity. In hog 

production, the production technology incorporates livestock genetics, feed mixtures and feeding 

equipment, housing and handling equipment, and veterinary and medical services used. The term

technical change (or progress) describes the increase in productivity resulting from adopting more 

effi cient production technologies. 

An increase in the scale of production is another source of productivity growth when there are 

increasing returns to scale—that is, when a proportional increase in all inputs results in a more 

than proportional increase in output. The returns to scale of a particular production technology 

are measured by its “scale elasticity”—the percentage increase in output obtained from a 1-percent 

increase in the quantity of all inputs.20 The movement toward the optimal scale of production (the 

scale at which the scale elasticity equals one) is said to increase scale effi ciency.

20For example, if a farm has an estimated scale elasticity of 1.25, then a 1-percent increase in all inputs would result in 

a 1.25-percent increase in output. Scale elasticity above 1 implies increasing returns to scale. Having increasing returns 

to scale is not optimal because productivity could be higher if output were increased. Scale elasticity equal to one implies 

constant returns to scale—that is, there is no productivity gain (or loss) from increasing the scale of production. Scale 

Figure 11

Feed efficiency improvement, 1992 to 2009

Source: 1992 Farm Costs and Returns Survey; 1998, 2004, and 2009 Agricultural Resource Management Survey.

The rate at which feed efficiency improved declined between 2004 and 2009 for feeder-to-finish 

operations, but increased among farrow-to-finish operations.

Percent improvement from 1992 (pounds per cwt gain)

Farrow-to-finish

Feeder-to-finish

0

10

20

30

40

50

60

1992 1998 2004 2009
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Table 7 shows the evolution of production costs (infl ation-adjusted dollars per hundredweight gain) 

for farms in different size categories. Costs have declined for most farm size categories. In addition, the data strongly suggest increasing returns to scale in each survey year, with declining per unit 

production costs as the scale of production increases. Some of the decrease in average unit costs 

since 1992 (see table 6) likely resulted from growth in the size of surviving operations. That is, 

between 1992 and 2009, some farms responded to the economic incentive to reduce average costs by 

expanding the scale of their operations; some smaller, less effi cient operations exited the industry; 

and new operations entered at a larger, more effi cient scale. 

It is also likely that some of the differences in productivity growth rates between farrow-to-fi nish 

and feeder-to-fi nish operations since 2004 (table 6) were associated with differences in the rates of 

farm size growth. Farrow-to-fi nish operations expanded rapidly between 2004 and 2009–the average 

operation sold/removed 1,472 head in 2004; this grew to 3,980 head in 2009 (see table 2). Output 

from feeder-to-fi nish operations also grew substantially over this period, but at a slower rate—

increasing from 4,730 head in 2004 to 7,222 head in 2009. 

While increases in scale effi ciency and technological change are likely the largest sources of productivity growth, hog farms also may become more productive by increasing technical and allocative effi ciency. Holding the scale of production and the technology constant, technical effi ciency

increases if farmers use inputs more effi ciently in the production process. For example, a farm 

manager might increase technical effi ciency by carefully blending the contents of feed to maximize 

elasticity below one implies decreasing returns to scale—effi ciency would actually decline if production were increased. 

Decreasing returns to scale is also suboptimal because productivity could be higher if output were decreased. 

Figure 12

Labor efficiency improvement, 1992 to 2009

Source: 1992 Farm Costs and Returns Survey; 1998, 2004, and 2009 Agricultural Resource Management Survey.

Labor efficiency improved greatly between 1992 and 1998, but less in successive years between 1998 

and 2009 for both feeder-to-finish and farrow-finish operations.

Percent improvement from 1992 (hours per cwt gain)

Farrow-to-finish

Feeder-to-finish

0

10

20

30

40

50

60

70

80

90

100

1992 1998 2004 2009
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animal weight gain per unit of feed. The farmer does not use a new technology or produce more, but 

the productivity of the farm increases because input expenditures per unit decline. Farmers increase 

allocative effi ciency if they can improve productivity by choosing a less costly mix of inputs that 

produces the same level of output. For example, if the price of feed increases relative to the price 

of capital, then it becomes more effi cient to substitute capital for feed (say by using machinery that 

more accurately rations feed).21

Disaggregating Productivity Growth

In this section, we disaggregate productivity growth at one important stage of hog production—feeder-to-fi nish—which now accounts for most fi nished hog output (73 percent in 2009).22 

Disaggregating the observed increases in total factor productivity into technical change, technical 

effi ciency change, scale effi ciency change, and allocative effi ciency change provides insight into 

the forces that drive structural change. The methodology used here to disaggregate TFP follows 

Orea (2002), and is described in more detail in Key and McBride (2007) and Key, McBride and 

Mosheim (2008). The approach requires estimation of a production frontier—a parametric relation21In addition to increases in hog farm productivity caused by these sources, there have also been substantial productivity gains at the industry level from increasing specialization in the various stages of hog production. As production 

shifted from less effi cient farrow-to-fi nish operations to more effi cient specialized operations, the total costs of producing fi nished hogs industrywide declined substantially, resulting in industrywide improvements in productivity. Too few 

farrow-to-wean or wean-to-feeder pig operations were in the ARMS data to access industry-wide gains from increased 

specialization in this study.

22There were too few observations to conduct a similar analysis for farrow-to-fi nish operations.

Table 7

Production costs per hundredweight (cwt) by type and size of hog producer, 1992-20091

Producer/Size category 1992 1998 2004 2009

$/cwt

Farrow-to-fi nish

 Cwt gain<1,000 105.45 109.18 110.71 102.73

 1,000cwt gain< 2,500 92.27 83.15 76.89 74.24

 2,500cwt gain<10,000 80.04 72.25 62.81 64.37

 10,000cwt gain<25,000 78.96 64.09 60.50 47.12

 25,000cwt gain id 61.87 54.41 36.59

Feeder-to-fi nish

 Cwt gain<1,000 90.32 80.60 62.47 64.81

 1,000cwt gain< 2,500 67.25 72.16 50.88 46.34

 2,500cwt gain<10,000 63.81 55.50 47.27 44.52

 10,000cwt gain<25,000 id 46.24 37.20 35.88

 25,000cwt gain id 47.22 37.79 32.79

1Production costs are the sum of operating and ownership costs less costs for feeder and nursery pigs. Pig costs are 

excluded because they are not an input contributing to weight gain. 1992, 1998, and 2004 feed costs are defl ated to 

2009 dollars using the national agricultural feed price index; other costs are defl ated to 2009 dollars using the national 

agricultural production items index (USDA, NASS, Agricultural Prices). In 2009 feed costs accounted for 58 percent of the 

costs of farrow-to-fi nish production and 74 percent of the costs of feeder-to-fi nish production.

id = insuffi cient data for legal disclosure.

Source: USDA, ERS using data from the 1992 Farm Costs and Returns Survey and 1998 and 2004 Agricultural Resource 

Management Surveys.
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ship between input quantities and the maximum output achievable from those inputs. The frontier 

describes the amount that technically effi cient operators could produce if they used the best practices 

available in the industry. Since no producers are perfectly technically effi cient, production occurs 

within the frontier.

The assumed functional relationship between the inputs and output is “fl exible” in that it imposes 

few a priori restrictions on the characteristics of the production technology, such as constant returns 

to scale. The parameters describing the frontier are estimated using a maximum likelihood technique that accounts for the facts that: (1) we do not observe the distance of the actual production 

levels from the frontier, and (2) input and output levels are measured with error (Battese and Coelli, 

1992). 

By defi nition, the percentage change in TFP equals the sum of technical change plus changes in 

technical effi ciency, scale effi ciency, and allocative effi ciency. Consistent with the trends in production costs (see table 6), the rate of TFP growth slowed substantially for feeder-to-fi nish operations 

after 2004 (table 8). 23 While TFP almost doubled between 1992 and 2004, it grew just 8.4 percent 

between 2004 and 2009. The annual rate of TFP growth slowed from 6.7 percent in 1992-98 to 5.6 

percent in 1998-2004 to just 1.6 percent in 2004-09.

Technological change and increases in scale effi ciency accounted for most of the growth in TFP 

since 1992, but their contribution to TFP growth has been shrinking over time. The rate of technical 

change slowed from 3.0 percent annually between 1992 and 1998 to 2.3 percent between 1998 and 

2004 to 1.0 percent between 2004 and 2009. The increases in scale effi ciency slowed even more 

rapidly: scale effi ciency increased 4.2 percent annually between 1992 and 1998, 2.2 percent between 

1998 and 2004, and only 0.9 percent between 2004 and 2009. Average technical effi ciency changed 

23Estimates for 1992-2004 shown in table 8 differ from those in Key and McBride (2007). Differences result because 

we estimate the stochastic production frontier using all available surveys. The estimates for 1992-2004 in table 8 are 

functions of parameters that were estimated with the addition of the 2009 data, which were not available in the earlier 

study. 

Table 8

Decomposition of total factor productivity change, feeder-to-fi nish operations, 1992-2009

Change over period (Annual growth rate)

Producer/Item 1992-1998 1998-2004 2004-2009

Percent

Technical effi ciency -2.9 3.3 -2.7

(-0.5) (0.5) (-0.6)

Technical 19.6 14.5 5.2

(3.0) (2.3) (1.0)

Scale effi ciency 28.1 13.9 4.5

(4.2) (2.2) (0.9)

Allocative effi ciency 2.6 7.1 1.4

(0.4) (1.1) (0.3)

Total factor productivity 47.3 38.8 8.4

(6.7) (5.6) (1.6)

Source: Authors’ calculations using data from USDA’s 1992 Farm Costs and Returns Survey and USDA’s 1998, 2004, and 

2009 Agricultural Resource Management Surveys.
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little over the 17-year study period. Allocative effi ciency change also played a small role in TFP 

change—increasing at an annual rate of 0.6 percent from 1992 to 2009.

Implications for Scale of Production

Increases in scale effi ciency contributed signifi cantly to productivity gains between 1992 and 2009 

as hog farms grew to take advantage of increasing returns to scale. Estimates of returns to scale 

explain farmers’ incentives to further expand farm size.

The top half of table 9 shows the change over time in the share of hog output produced by feeder-tofi nish farms in each farm-size category. This period is characterized by a shift in production toward 

the largest operations. Farms producing at least 10,000 hundredweight gain represented less than 

10 percent of total output in 1992. By 1998, these operations produced nearly 65 percent of total 

output, and their share rose to 90.9 percent by 2009.

The bottom half of table 9 reports the estimated scale elasticity for hog farms in each size category 

and the mean scale elasticity for all farms in each survey year. The scale elasticity declines as 

farm size increases—large farms obtain smaller gains from increasing scale than do small farms. 

In every year, the mean scale elasticity was greater than one, implying increasing returns to scale 

in all periods. However, as farm size increased between 1992 and 2009, the share of farms in the 

larger size categories increased, which caused the mean scale elasticity to decline over time from 

1.15 to 1.04. The mean scale elasticity of 1.04 in 2009 indicates that a 10-percent increase in inputs 

produces a 10.4-percent increase in output for the “typical” farm. 

Farms producing less than 10,000 hundredweight could substantially improve productivity by 

increasing their scale of production. However, beyond about 10,000 hundredweight gain, the 

Table 9

Share of output and scale elasticity by farm size and year, feeder-to-fi nish operations, 

1992-2009

Size category 1992 1998 2004 2009

Share of total output (percent)

 cwt gain < 1,000 14.7 1.9 0.5 0.1

 1,000 ≤ cwt gain < 2,500 35.0 6.7 3.0 1.0

 2,500 ≤ cwt gain < 10,000 41.0 26.5 16.7 8.0

 10,000 ≤ cwt gain < 25,000 9.3 29.2 36.3 46.1

 25,000 ≤ cwt gain id 35.7 43.4 44.8

Scale elasticity

 cwt gain < 1,000 1.20 1.23 1.21 1.26

 1,000 ≤ cwt gain < 2,500 1.12 1.14 1.14 1.13

 2,500 ≤ cwt gain < 10,000 1.06 1.08 1.07 1.07

 10,000 ≤ cwt gain < 25,000 1.05 1.04 1.03 1.01

 25,000 ≤ cwt gain id 0.97 0.96 0.97

 All farms (mean) 1.15 1.13 1.09 1.04

id = insuffi cient data for legal disclosure.

Source: USDA, ERS using data from USDA’s 1992 Farm Costs and Returns Survey and USDA’s 1998, 2004, and 2009 

Agricultural Resource Management Surveys.
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productivity gains from expanding farm size appear limited. Farms producing between 10,000 

and 25,000 hundredweight had an average scale elasticity of 1.01 in 2009. The technology used by 

farms in the largest size category (greater than 25,000 hundredweight) exhibits slightly negative 

returns to scale. In 2009, about 91 percent of hog output from feeder-to-fi nish operations originated 

on farms producing at least 10,000 hundredweight gain. Hence, there appears to be little scope for 

additional productivity gains from increases in scale for feeder-to-fi nish operations using current 

technologies.24 

Regional Differences

Production, farm size, and productivity growth on feeder-to-fi nish hog operations varied substantially by region between 1992 and 2009 (table 10). We compare trends in two major hog-producing 

regions: the Heartland and the Southern Seaboard (see fi g. 3). Producers in the West and other 

regions are placed in the “other regions” category.25 

Between the fi rst two surveys (1992-98), production shifted from the Heartland to the Southern 

Seaboard and other regions. The share of output produced by farms in the Southern Seaboard 

increased 12.5 percentage points, even though the share of feeder-to-fi nish operations located in this 

region declined 6.1 percentage points. An almost tenfold increase in scale of production (cwt gain) 

accounts for this increase in output share. The Heartland experienced smaller proportional increases 

in average farm output over 1992-98, so its share of total output declined by 15.8 percentage points.

After 1998, this pattern reversed; feeder-to-fi nish output share rebounded in the Heartland and 

declined in the Southern Seaboard. From 1998 to 2004, Heartland farms doubled in size while 

farms in the Southern Seaboard had much smaller proportional increases (though starting from a 

larger average size). As a result, the Heartland increased its share of output 10.6 percentage points 

over this period, while the Southern Seaboard experienced a decrease in share of 6.7 percentage 

points. This trend continued from 2004 to 2009; Heartland farms increased in size much faster than 

did those in the Southern Seaboard. Over the most recent period, Heartland farms increased their 

share of total output by 13.9 percentage points, while those in the Southern Seaboard saw their share 

of output decline by 9.6 points.

The decline in output share and the slow growth in average farm size in the Southern Seaboard 

during 1998-2009 are likely attributable to policy changes in North Carolina, which produced 

about 96 percent of total hog output in the Southern Seaboard region. In 1997, the Clean Water 

Responsibility and Environmentally Sound Policy Act imposed a moratorium in North Carolina on 

the construction of new and expanded hog operations with 250 head or more. 26 

In 1992 and 1998, the average hog operation in the Southern Seaboard was more productive than 

the average farm in the Heartland (table 10)—partly refl ecting the substantial difference in average 

farm size between the regions. (Productivity is measured as output per dollar of inputs, where input 

24This study used data from operations (i.e., sites) that had hogs and not from the hog owners that include large multistate, multipacker integrators. Many of the feeder-to-fi nish operations in this study produced hogs for large integrators. 

A limited scope for productivity gains from hog operations larger than those most often observed in this study may be a 

reason why large integrators don’t have all their hogs in one place, but rather have hog operations at several sites.

25In this section, regions are defi ned differently than in Key and McBride (2007). 

26The moratorium contained several exceptions, including new construction using “innovative animal waste management systems that do not employ an anaerobic lagoon.” For full text of the bill, see: http://ssl.csg.org/dockets/99bscbills/24

99b01nchb515cleanswine.html
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expenses are adjusted to 2009 price levels.) Between 1998 and 2009, the average farm size in the 

Heartland continued to grow at a rapid pace, while it stagnated or grew slowly elsewhere. By 2004, 

the productivity advantage reversed—the average hog farm in the Heartland was more productive. 

Differences in productivity across regions can be partly explained by differences in input prices, 

since the productivity index is based on input costs. Operations in the Heartland, a major corn 

and soybean producing region, enjoy cheaper feed costs than farms in other regions. In 2009, farms 

in the Heartland had an average feed cost of $14.76 per cwt, compared with $18.81 per cwt in the 

Southern Seaboard and $27.80 per cwt in other regions.27

27Average feed costs are the sum of purchased and homegrown feed costs. Purchased feed costs are reported directly 

by producers, or obtained from hog contractors. Quantities of reported homegrown feed are valued according to feed 

grain and soybean market prices.

Table 10

Output and productivity trends by region, feeder-to-fi nish operations, 1992-2009

Item/Region 1992 1998 2004 2009

Percent

Share of farms 

 Heartland 65.3 71.8 68.9 75.9

 Southern Seaboard 14.2 8.1 10.0 9.5

 Other regions 20.5 20.0 21.0 14.6

Share of output

 Heartland 67.5 51.7 62.3 76.2

 Southern Seaboard 18.1 30.6 23.9 14.3

 Other regions 14.4 17.7 13.7 9.5

Hundredweight gain

Mean farm output 

 Heartland 1,665 5,753 10,971 19,059 

 Southern Seaboard 2,040 22,848 26,740 28,398 

 Other regions 1,384 11,738 14,420 13,253 

Hundredweight gain per dollar of inputs1

Productivity index

 Heartland 0.013 0.016 0.028 0.028

 Southern Seaboard 0.016 0.021 0.023 0.024

 Other regions 0.012 0.015 0.017 0.021

1 Input costs are the sum of feed, labor, capital recovery, and other input costs. The labor expenditures for paid labor 

are observed. Labor expenditures for unpaid labor are estimated using an imputed wage for unpaid labor. Other inputs 

are expenditures on veterinary services, bedding, marketing, custom work, energy, and repairs. The cost of each input 

is expressed in 2009 constant dollars using Bureau of Labor Statistics (BLS) price indices: the BLS blue collar total 

compensation index is used for labor, a weighted average of the corn and soybean Producer Price Index (PPI) for feed, 

the farm machinery PPI for capital, and a weighted average of fuel and pharmaceutical PPIs for other inputs.

Source: USDA, ERS using data from USDA’s 1992 Farm Costs and Returns Survey and USDA’s 1998, 2004, and 2009 

Agricultural Resource Management Surveys.
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Organizational Structure and Productivity

Production contracts offer several potential advantages over independent production that help explain 

their growing use: contracts can reduce information asymmetries between growers and processors, 

improve coordination and timing of product delivery, and lower income risk for growers. Production 

contracts also may raise farm productivity by improving the quality of farm management decisions, 

speeding the transfer of technical information to growers, improving growers’ access to credit, and 

facilitating the adoption of more effi cient technologies.

ERS research has shown a link between the use of production contracts and hog farm productivity. 

Using the 1998 ARMS survey of feeder-to-fi nish hog farms, Key and McBride (2003) compared the 

productivity of similar independent operations and contract operations, controlling for unobservable 

differences that might be associated with the decision to contract. The authors found that production 

contracts were associated with an average increase in total factor productivity of about 23 percent. 

In a second study using the more recent 2004 ARMS, Key and McBride (2008) used an instrumental variables technique to isolate the effect of contracts on productivity. As in the earlier study, 

the authors found that contract operations were substantially more productive than similar independent operations. A 10-percent increase in the prevalence of contracting would increase average total 

factor productivity by 5 percent. Estimates of the magnitude of productivity gains attributable to 

contracting suggest that these productivity advantages contributed to the growth in hog contracting 

during 1992-2009. 

The share of feeder-to-fi nish operations using production contracts grew from 11 percent in 1992 

to 74 percent in 2009 (table 2). This growth in contracting by feeder-to-fi nish operations may have 

contributed to the productivity gains enjoyed by the sector. However, by 2009, 79 percent of hogs 

produced by feeder-to-fi nish operations were raised under a production contract, suggesting limited 

scope for productivity gains from a further expansion in the use of production contracts.
33

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Implications of Structural and Productivity Change

The dramatic structural changes in the hog industry and the resulting productivity gains have 

enhanced national economic effi ciency by freeing up land, labor, capital, and other resources for the 

production of other goods and services. These changes have helped lower pork prices for consumers 

and contributed to an increase in U.S. pork exports. On the other hand, in some States these changes 

have concentrated livestock manure in regions with relatively little available cropland for spreading, 

making it more costly to apply as fertilizer in environmentally benign ways. 

Lower Consumer Prices

One of the main benefi ts to society from increased productivity on hog farms is lower pork prices 

for consumers. Lower production costs for farmers will generally mean lower prices for hogs at the 

farm gate (compared to what they would have been without the productivity increases). Lower hog 

prices will, in turn, lead to lower pork prices if packers and retailers pass along their cost savings to 

consumers. How much have productivity gains in hog production been refl ected in prices? One way 

to address this question is to estimate how much hog prices would have increased had there been no 

change in farm productivity. This counterfactual can be estimated by examining input prices. In a 

competitive market, the price received by farmers for fi nished hogs equals the total cost of inputs, 

including a “normal” rate of return on owners’ equity. Consequently, if the normal rate of return 

was constant and farm productivity did not change, then hog prices would be expected to track input 

prices. 

Input price trends between 1992 and 2009 are shown by the real aggregate input price index (fi g. 

13). The price index is a weighted sum of the infl ation-adjusted feed (47 percent), capital (22 

percent), labor (23 percent), and other input (8 percent) prices, and is set to 100 in 2005.28 The infl ation-adjusted input price index did not display a clear trend until about 2006, after which it increased 

substantially in response to large feed price increases. The input cost index had an average value of 

104 in the fi rst 3 years of the series (1992-94) compared to 141 in the last 3 years (2007-09). Since 

hog prices should refl ect onfarm costs of production, farmgate prices would be expected to increase 

in the absence of productivity gains. 

Figure 13 also shows trends in U.S. hog and pork prices since 1992 in constant 2005 dollars at 

the farm, wholesale, and retail levels. The farm value is the gross value of the hog when it is sold, 

measured in cents per pound of retail-equivalent weight. The wholesale value is the average value of 

the meat as it leaves the packing plant. The retail value is the average value of selected cuts of meat 

at the grocery store. While input prices increased, the farmgate price of hogs decreased from 102 

cents per pound in 1992-94 to 73 cents in 2007-09, a 28-percent decline. Hence, even though input 

prices increased (particularly in the last 4 years of the study period), hog prices at the farm level 

actually declined substantially. The difference between these longrun price trends can be attributed 

mainly to onfarm productivity increases.

Productivity gains that reduce fi nished-hog prices do not, however, directly translate into lower retail 

prices. While wholesale pork prices (at the packing house) show a very similar trend to farmgate 

prices, retail pork prices remained essentially fl at over 1992-2009. Retail prices did not decline 

28Weights are the average cost share for these inputs for fi nished hog producers in the 1992, 1998, 2004, and 2009 

surveys. 
34

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in part because the cost of hogs comprises only about a third of the total cost of retail pork (hogs 

must be slaughtered and processed, and pork must be transported and marketed).29 Hence, the 

productivity and market structure of the processing and retail sectors are important determinants 

of retail pork prices. Factors that may have contributed to the increasing spread between retail 

and farm prices include slower productivity growth in the retail sector, greater input price infl ation 

for retailers, and increasing value added (see Hahn (2004) for more information about meat price 

spreads). Nonetheless, even though real retail pork prices did not fall over 1992-2009, prices would 

likely have been higher had gains in hog farm productivity not helped hold hog prices down at the 

farm level. 

Increasing Exports

Higher productivity and lower production costs enhance the competitive advantage of U.S. pork 

producers. Lower production costs allow U.S. producers to increase their market share overseas and 

to remain competitive with importers. U.S. pork products are exported primarily to Japan, Mexico, 

and Canada, while the majority of U.S. imports come from Canada (USDA-ERS, 2012). In 2008, 

29The share of the farm value of pork (net byproducts) in the retail value has fl uctuated between 23 and 43 percent 

between 1992 and 2009, and averaged 32 percent (see http://www.ers.usda.gov/data-products/meat-price-spreads.aspx).

Figure 13

Trends in real U.S. live hog, pork, and input prices, 1992 to 2009

Source: USDA Economic Research Service calculations using data from the Bureau of Labor Statistics, the Census, and USDA Agricultural 

Marketing Service.

Relationships between hog, pork, and input prices suggest that increased hog farm productivity during 1992 and 2009 

helped to hold down pork prices for consumers.

2005 cents per pound

0

1992 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 09

Farm value Wholesale value Retail value Input price index (2005=100)

50

100

150

200

250

300

350
35

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the United States accounted for 39 percent of world exports, followed by the European Union (25 

percent) and Canada (17 percent). 

Between 1992 and 2009, U.S. pork production and exports increased substantially (fi g. 14). 

Production increased by about 5.5 billion pounds over this period and much of this increase was 

driven by exports. Annual exports increased from about 0.5 billion pounds in 1992-94 to 4.0 billion 

pounds in 2007-09. Exports represented, on average, about 3 percent of production in 1992-94, but 

about 17 percent of production in 2007-09. Over this period, imports remained fl at, so exports as 

a share of traded goods (imports plus exports) increased from about 40 percent in 1992-94 to 81 

percent in 2007-09. 

Environmental Risks and Benefi ts

The shift in the U.S. hog industry to fewer and larger operations that specialize in a single phase of 

production and that use production contracts has altered manure management, storage, and application practices, with important implications for the environment (Key et al., 2011). The structural 

changes have meant that an increasing volume of manure is produced on farms having less cropland 

per animal. Between 1998 and 2009, increases in hog production outpaced growth in crop acreage 

on which manure was applied, resulting in a 74-percent increase in average manure application 

intensity.30

30The application intensity is defi ned as the farm inventory, adjusted for the removal of manure off the farm, divided by 

the acres of land on the hog operation on which manure was applied (see Key et al. (2011) for details). 

Figure 14

Trends in U.S. pork production and trade, 1992 to 2009

Source: USDA Economic Research calculations using data from the U.S. Department of Commerce, Bureau of the Census.

U.S. pork exports increased substantially from 1992 to 2009, suggesting that increased productivity 

enhanced the competitive position of U.S. producers.

Percent

Production (right axis)

Exports/(Exports + Imports) (left axis)

Carcass wt., billion lbs.

0

5

10

15

20

25

0

10

20

30

40

50

60

70

80

90

1992 93 94 95 96 97 98 99 2000 01 02 03 04 05 06 07 08 09

Exports/Production (left axis)
36

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A higher manure-to-cropland ratio can make it more costly for some farmers to apply manure nutrients to land at rates that crops can absorb because operators must transport the manure farther from 

their facilities (Ribaudo, et al. 2003). When too much manure is applied to crops, there is a greater 

chance that manure nutrients (nitrogen, phosphorus, and potassium) and pathogens will fl ow into 

ground and surface water. These runoff contaminants can harm aquatic life and degrade drinking 

water. In addition, increased concentration of hogs per farm has led to confl icts with nearby residents and communities over odor and air quality. Legislative initiatives, such as the Clean Water Act 

and various State regulations, have implemented environmental policies to mitigate the risk of water 

pollution and reduce confl icts.

While the increased concentration of production presents environmental risks, the increase in 

feed effi ciency that has accompanied the structural changes counterbalances these risks to some 

extent. Nitrogen and phosphorus enter the production system in animal feed. Some of the nutrients are retained in the animal product (meat), but most are excreted in urine and manure (Follett 

and Hatfi eld, 2001; ASAE, 2005). Consequently, increases in feed effi ciency may have reduced 

the quantity of nutrients excreted per animal. Since larger operations generally use less feed per 

hog produced, the increased livestock density on larger operations may be offset by greater feed 

effi ciency. 

Other environmental benefi ts accrue from greater feed effi ciency. Higher productivity means that 

fewer resources—including land, fertilizer, and pesticides—are required to grow the feed required 

to produce a particular amount of pork. Depending on how the feed inputs are used, this could 

result in lower greenhouse gas emissions (e.g., from less fertilizer manufacturing and use), reduced 

water pollution (e.g., from less fertilizer or pesticide over-application), or other environmental 

benefi ts. Also, concentrating manure sources in fewer locations potentially affects fewer people and 

may also make some manure treatment technologies (e.g., energy from bio-waste, or processing into 

concentrated fertilizer) feasible.
37

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Conclusions

The era of dramatic productivity growth in hog production is likely over, absent new technological 

innovation. The 1992-2009 data support this conclusion on two fronts. First, the gains from 

exploiting scale economies are nearly exhausted, as most hog production now takes place at a size 

where returns to scale are nearly constant. Second, the measurable technological and organizational 

innovations that contribute to productivity growth (e.g. confi nement feeding, production contracts, 

artifi cial insemination, all-in/all-out management) are widely diffused. For example, the contribution of contracts to productivity growth may be reaching a limit on feeder-to-fi nish operations, where 

79 percent of hogs were raised under a production contract in 2009. It is likely that other technologies promoting productivity, such as high-performance genetics, are also widely diffused. 

Corn and soybean prices can have a signifi cant effect on the structure of hog production. High corn 

and soybean prices during 2007-09 raised feed costs substantially. Many small operations raise 

these crops for hog feed, and these relatively high-cost hog producers likely found greater returns 

from selling crops rather than feeding hogs. As small operations ceased producing hogs, the average 

size of hog operations—and average productivity—increased further. Contract hog production is 

conducted on relatively large, lower-cost hog operations. Large contractors, who supply feed to 

contract grower operations, might be better able to withstand feed cost volatility. However, since 

2009, corn and soybean prices increased to record levels and the high feed prices are likely driving 

additional changes in the structure and productivity of U.S. hog farms.
38

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Glossary

All-in/all-out housing commingles pigs of a similar age and weight and keeps them together as they 

move through each production phase. Marketing is done a room at a time, and rooms are washed 

and disinfected between dedicated stages to help decrease the spread of infectious diseases.

Bio-security plans usually specify strict isolation and sanitation programs in order to prevent the 

advent and spread of disease.

Commercial seed stock producers specialize in the production and sale of high quality breeding 

hogs.

Contract production is an arrangement between a pig owner (contractor) who engages a producer 

(grower) to take custody of the pigs and care for them in the producer’s facilities with other inputs 

often furnished by the pigs’ owner. The producer is paid a fee for the service provided.

Farm Resource Regions portray the geographic distribution of U.S. farm production by identifying 

areas where similar types of farms intersect with areas of similar physiographic, soil, and climatic 

traits (USDA, ERS).

Hog operations are defi ned as farms that had a hog inventory of 25 head or more on the acres operated at any time during survey years 1992, 1998, 2004, and 2009. Hog operations include independent hog producers and growers who produce hogs under contract.

Hundredweight gain equals hundredweight of hogs sold or removed under contract less hundredweight of hogs purchased or placed under contract, plus hundredweight of inventory change each 

year, expressed as:

 CWTGAIN = (CWTSR – CWTPP) + (CWTEINV – CWTBINV)

Operating costs are the costs for purchased input items that are consumed during one production period. These include feed; feeder pigs; veterinary and medical services; marketing; custom 

services and supplies; fuel, lubrication, and electricity; repairs; hired labor; and operating capital. 

Ownership costs are the costs associated with the ownership of depreciable assets, such as farm 

tractors and hog-production facilities. These include depreciation, interest, property taxes, and 

insurance.

Phase feeding feeds hogs or pigs diets of varying protein and energy content at different stages, or 

phases, of their life to more closely match the diet with their changing nutritional requirements.

Phase of production refers to one of four commonly used categories that describe stages in the 

hog production process: (1) breeding and gestation—the breeding of females and their maintenance 

during the gestation period, (2) farrowing—the birth of baby pigs until weaning, (3) nursery—the 

care of pigs from immediately after weaning until about 30-80 pounds, and (4) growing/fi nishing—

the feeding of hogs from 30-80 pounds to the slaughter weight of 225-300 pounds.

Subtherapeutic antibiotics are antimicrobial drugs fed to hogs at low levels (i.e. levels less than 

prescribed for therapeutic use) to prevent disease, promote growth, and improve overall animal 

health.
39

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Terminal crossbreeding programs concentrate on using all possible heterosis of the breeds and thus 

capitalize on breed strengths. These programs use two-, three-, or four-breed fi rst-cross females that 

excel in maternal traits bred to boars from breeds that are superior for growth and carcass traits. All 

the progeny from these matings are marketed and not kept for replacement gilts.

Total economic costs are the full ownership costs (cash and noncash) for being engaged in the 

enterprise. These include both operating and ownership costs, plus opportunity costs for unpaid 

labor and land, and costs for general farm overhead items.

Type of hog producer is a classifi cation that defi nes the hog operation according to the phases of 

production conducted on the operation and the type of product produced. Some operations in each 

survey could not be classifi ed using the following criteria:.

Farrow-to-fi nish operations are those on which pigs are farrowed and then fi nished to a 

slaughter weight of 225-300 pounds. Using the survey data, these operations were defi ned as 

farms on which more than 75 percent of pigs came from onfarm farrowings and more than 75 

percent of the value of hogs and pigs left the operation through market hog sales or contract 

removals.

Farrow-to-feeder pig operations are those on which pigs are farrowed and then sold or removed 

under contract at or after weaning at a weight of about 30-80 pounds. Using the survey data, 

these operations were defi ned as farms on which more than 75 percent of pigs came from 

onfarm farrowings and more than 75 percent of the value of hogs and pigs left through feeder 

pig sales or contract removals.

Farrow-to-weanling operations are those on which pigs are farrowed and then sold or removed 

under contract after an early weaning at a weight of about 10-20 pounds. Using the survey 

data, these operations were defi ned as farms on which more than 75 percent of pigs came from 

onfarm farrowings and more than 75 percent of the value of hogs and pigs left through weanling 

sales or contract removals. 

Feeder pig-to-fi nish operations are those on which feeder pigs are obtained from outside the 

operation, either purchased or placed under contract, and then fi nished to a slaughter weight of 

225-300 pounds. Using the survey data, these operations were defi ned as farms on which more 

than 75 percent of pigs came from feeder pig purchases or contract placements and more than 75 

percent of the value of hogs and pigs left through market hog sales or contract removals.

Weanling-to-feeder pig operations are those on which weanlings (10-20 pounds) are obtained 

from outside the operation, either purchased or placed under contract, and then fed to a feeder 

pig weight of about 30-80 pounds. Using the survey data, these operations were defi ned as farms 

on which more than 75 percent of pigs came from weanlings purchased or placed under contract 

and more than 75 percent of the value of hogs and pigs left through feeder pig sales or contract 

removals. 
40

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