Sector at a Glance

• Hog Production
• Industry Structure
• Policy
• Trade

Hog Production

Hogs are produced in three types of specialized enterprises:

• Farrow-to-finish operations raise hogs from birth to slaughter weight, about 240-270 pounds.
• Feeder pig producers raise pigs from birth to about 10-60 pounds, then generally sell them for finishing.
• Feeder pig finishers buy feeder pigs and grow them to slaughter weight.

Most hog producers use some type of confinement production, with specialized, environmentally modified facilities. Confinement production allows year-round production by protecting hogs from seasonal weather changes, disease exposure, and predators. Manure collected from hog operations is typically spread as fertilizer on nearby cropland.

Some overlap exists in enterprise type. For example, farrow-to-finish operators may sell or buy feeder pigs if their feed production is smaller or larger than their own production needs. However, most producers use only one production system.

The Biological Hog Cycle

The biological hog cycle is longer than that of broilers, but shorter than for cattle. (The economic hog cycle refers to the peaks and valleys in hog inventories over time, while the biological hog cycle refers to the biological time lags involved in hog production.) A sow can produce an average of slightly more than two litters per year, each consisting of an average of nearly nine pigs. Production of hogs has consisted of five different phases: farrow-to-wean, feeder pig or nursery, finishing, breeding stock, and farrow-to-finish.

Figure 1. The Biological Hog Cycle

Source: Dr. Paul Pitcher and Sandra Springer, University of Pennsylvania School of Veterinary Medicine, 1997.

It takes about 32 weeks, from birth to breeding age, before a gilt (a female hog that has not farrowed—that is, given birth) is ready to reproduce. The reproduction process begins with the mating of a gilt capable of conception and a boar (male hog) or by artificially inseminating the gilt with semen from a desired boar. Once the gilt has been bred successfully, she will farrow an average of at least 10 piglets (young pigs) in approximately 16 weeks. A sow (adult female hog that has farrowed at least once) can be bred again shortly after pigs from the previous litter are weaned.

In a farrow-to-finish operation, 22-26 weeks (starting at birth) are required to grow a pig to slaughter weight. Sows nurse their piglets for an average of 3 weeks before they are weaned (separated from the sow). This is the farrow-to-wean phase of hog production. Weighing about 10 pounds, the weaned pigs are either moved on to the next phase of production (known as wean-to-feeder pig) or they are shipped directly to finishing operations. Pigs in the wean-to-feeder pig phase are fed rations varying in protein content until they reach an average weight of about 40 pounds. From the feeder pig stage, the animals enter a finishing/feeding stage and remain there until they reach a desired slaughter weight of about 280 pounds. Operations of this type are known as the feeder pig-to-finish phase, or simply the finishing phase.

Industry Structure

The U.S. hog industry has undergone significant structural changes in the last 40 years, the most of important of which has been the rapid shift to fewer and larger operations. Since 1990, the number of farms with hogs has declined by more than 70 percent, as individual enterprises have grown larger. U.S. hog operations tend to be heavily concentrated in the Midwest—Iowa and southern Minnesota particularly—and in eastern North Carolina, but hog operations are also found in Oklahoma and in Texas.

Large operations that specialize in a single phase of production have replaced farrow-to-finish operations that performed all phases of production. The use of production contracts has increased. Structural changes have coincided with efficiency gains and lower production costs. Most of the productivity gains are attributable to increases in the scale of production and technological innovation (figure 2).

Figure 2. U.S. commercial pork production versus breeding beginning stocks, 1980-2020

Policy

Federal programs for hogs are not comparable to those for crops. Federal legislation provides assistance to farmers that includes emergency feed, meat purchasing, disease eradication, drought assistance, and conservation/environmental programs.

• When producers are undergoing financial stress, USDA's Agricultural Marketing Service (AMS) may purchase meats for domestic feeding programs, to help strengthen prices through Commodity Purchase Programs.
• USDA's Animal and Plant Health Inspection Service (APHIS) oversees USDA's disease eradication programs such as that for pseudorabies, a viral swine disease.
• USDA's Farm Service Agency (FSA) provides assistance to producers for natural disaster losses resulting from drought, floods, fire, freezes, tornadoes, pest infestations, or other calamities.
• Another program for livestock operations is the Environmental Quality Incentives Program (EQIP))—which provides technical, educational, and financial assistance to eligible farmers and ranchers to address soil, water, and related natural resource concerns on their lands in an environmentally beneficial and cost-effective manner.
• The USDA\Risk Management Agency offers two insurance programs to pork producers. The Livestock Risk Protection Insurance Plan for Swine (LRP-Swine) is designed to insure producers against declining market prices. The Livestock Gross Margin Insurance Plan for Swine (LGM-Swine) provides protection against the loss of gross margin. Both insurance programs offer maximum flexibility in terms of length and level of coverage.

The trend toward fewer and larger hog farming enterprises has brought environmental issues to the forefront of public policy regarding the hog industry. As animal density increases, so do concerns regarding air and water quality, occupational health, and waste management of the facilities. In areas where hog production is most concentrated, human population density can increase as well. These trends portend growing conflicts between nearby residents and hog producers over odor, water contamination, and other environmental problems associated with concentrated production.

The Environmental Protection Agency (EPA) provides information about national environmental requirements related to the production of agricultural animals, including fish and other aquatic animals. EPA promulgates and enforces livestock waste regulations, including those on Concentrated Animal Feeding Operations. Many States and locales have regulations on the size of confined animal operations—as well as odor, waste disposal, and water quality as they relate to agriculture.

Agricultural policy extends to trade, and agriculture is one of the topic areas in the World Trade Organization that is under negotiation. In addition to market forces—sanitary and phytosanitary regulations, tariffs, quotas, and other policies affect the trade of animal products.

Trade

• Pork Exports
• Pork Imports
• Live Hog Trade

The United States is a major pork exporting country

The United States became a net exporter of pork in 1995. Productivity gains allowed the U.S. pork industry to export a higher share of world exported commercial pork—reaching 29 percent in 2020, compared with 2 percent in 1990. The export share reached a market peak of 35 percent in 2008 and 2009, and averaged 32 percent in the last decade (Figure 3, right axis).

Since 2000, the United States has been one of the world’s top five annual pork exporters. The United States has shipped more than 5.4 billion pounds (carcass weight-equivalent) of fresh and frozen pork cuts to foreign markets (on average, since 2010), with a maximum of 7.3 billion pounds being shipped in 2020 (Figure 3, left axis). In the last 5 years, the United States ranked second in the top five pork meat exporting countries—closely following the European Union—and followed from a distance by Canada, Brazil, and Mexico (figure 4).

Figure 3. U.S. pork export and world export share, 1990-2020

Becoming a net pork exporter is a consequence of recent structural changes in the U.S. pork industry. Since the mid-1980s, the industry has shifted away from many small, independently owned hog operations toward fewer, larger operations that rely on contracting and vertical coordination. Such structural change reduces producer risk and optimizes a year-round processing capacity that can accommodate cyclically large fall and winter slaughters.

Figure 4. Country shares of global pork exports, by volume, 2020

Four countries account for 75 percent of U.S. pork exports

The primary markets for U.S. pork products are Mexico (which accounts for about one-third of U.S. exports), Japan, China/Hong Kong, and Canada. In the last decade, these 4 countries accounted for 75 percent of the U.S. pork exports. Other destinations included South Korea, Australia, New Zealand, Taiwan, Philippines, Vietnam, and countries in South and Central America (figure 5). Primary pork competitors in foreign markets are the European Union, Canada, and Brazil (figure 4).

Mexico has been either the first or second largest foreign destination for U.S. exported pork since 2015. Increasing Mexican demand for U.S. pork products reflects Mexican higher incomes and an expanding middle class. In 2020, Mexico accounted for 21 percent of U.S. pork exports.

Japan, the largest importer of U.S, pork before 2015, Japan imports both fresh-chilled pork and frozen pork products. Japan's fresh pork has been supplied primarily by the United States. For frozen pork, the European Union has been Japan's primary supplier, followed by the United States and Canada. Imported fresh pork products (higher priced cuts such as loins) are typically marketed through retail channels in Japan, while frozen pork cuts (mainly boneless bellies and shoulders) are used as inputs for processed pork products. In 2020, Japan accounted for 16 percent of U.S. pork exports

In recent years China/Hong Kong has become a significant importer of U.S. pork products. Since 2010, China/Hong Kong has been either the third or fourth largest foreign buyer of U.S. pork. As China’s pork industry adjusts to greater consumer demand and new environmental restrictions that could slow the growth of domestic pork production, a growing and increasingly urban middle class will likely boost demand for imported pork products. In 2020, China\Hong Kong was the largest foreign destination for exported U.S. pork, due to domestic production losses that resulted from African Swine fever infections in the Chinese swine herd.

United States-Mexico-Canada Agreement (USMCA) partner Canada is typically among the top five buyers of exported U.S. pork. Among the factors facilitating U.S pork exports to Canada are historically close commercial relationships, a common language, proximity to U.S. pork production States, and relatively few border restrictions.

Figure 5. Country shares of U.S. pork export levels, 2020 average

The United States has accounted for a declining share of world pork imports

The United States has accounted for a diminishing share of world pork imports, as U.S. import volumes have fallen, and world trade has expanded. Over the last decade, the United States accounted for less than 7 percent of global pork imports, with the lowest volume attained in 2020, when the U.S. accounted for less than 4 percent of world import volume.

Most U.S. pork imports originate from Canada and the European Union. In the last decade, more than 93 percent of the U.S. pork imports were split between Canada and the European Union—with four-fifths of imports coming from Canada, while EU member countries accounted for about one-tenth. Additional 5 percent of the U.S. pork imports are originated from the United Kingdom, Mexico, and Brazil.

Going forward, such factors as trade agreements, low transportation costs, and cross-border proximity are likely to further consolidate integration in the North American pork and foodservice industries. Nevertheless, the European Union is likely to be a presence in the U.S. pork market for some time because the EU is often a supplier of well-priced ribs and other specialty pork cuts.

The United States is a large net importer of live hogs

Significant numbers of live hogs—hogs for immediate slaughter, and finishing animals—are imported from Canada. Most of the finishing animals (early-weaned pigs weighing less than 15 pounds and feeder pigs, weighing about 40 pounds) are sold under contract to finishing operations in Corn Belt States (figure 6).

Figure 6. U.S. hog imports from Canada, 1990-2020

Prior to the early 2000’s, several factors encouraged Canadian producers to export finishing animals to the United States. Foremost was the drive by the Canadian Government to curb its expenditures in the 1990s, including the abolishment of the Crow Rate grain transport subsidy-- a rail transportation subsidy for farmers on the Canadian Prairies and manufactures in Central Canada-- in 1995. Eliminating this subsidy provided an incentive for producers in the Canada’s Western Provinces to use grain for livestock production. Also, lower Canadian subsidies resulted in reduced U.S. countervailing duties on imported Canadian hogs. These policy changes created powerful incentives for the Canadian pork industry to expand, as did a strong U.S. dollar exchange rate in the 1990’s.

In the United States, several factors combine to generate significant U.S. demand for Canadian finishing animals. These factors include available slaughter capacity, abundant feed supplies, and environmental regulation favoring the construction of hog-finishing facilities in Corn Belt States.

U.S. imports of Canadian hogs peaked in 2007, at about 10 million head. Among the factors that contributed to the reduction in live-hog imports included exchange rate volatility, some increase in finishing and processing capacity in Canada, 2002 Country of Origin Labeling legislation in the United States for fresh pork products, and 2004 antidumping and countervailing duty actions by the U.S. National Pork Producers’ Council against imported live Canadian hogs. At its peak in 2007, Canadian imported hogs accounted for about 9 percent of U.S. federally inspected (FI) hog slaughter. Since that time, live imports have not accounted for more than 5 percent of FI slaughter.

The United States exports a small number of hogs, mostly breeding animals. Historically, most of these animals (80 percent) were shipped to Mexico. However, in the last years, the number of shipments to China and Canada doubled from the volumes seen in early 2000s (figure 7).

Figure 7. Country shares of U.S. hog exports, 2000-2020