Pigs, Hogs, and Pork
US Swine Production is a 72 billion dollar industry
• Pork is the worlds most widely eaten meat• US per capita consumption – 52 lbs retail wt• Inventory of over 6 million sows • Commercial slaughter 104 million head• US is worlds third largest producer• 1 of every 12 hogs is exported
35
40
45
50
55
60
65
1970 1975 1980 1985 1990 1995 1996 1997 1998 1999 2000
- Demand/Consumption
Per Capita Consumption, Retail Wt basis
2000 = 52.5 lbs
PorkFacts 2001/2002; USDA
-500000
-400000
-300000
-200000
-100000
0
100000
200000
300000
1987 1990 1995 1996 1997 1998 1999 2000
Trends in the Industry
- Exports
Net Pork Exports, Metric tons
PorkFacts 2001/2002; USDA
Where are the Pigs??Rank State Breeding Market Total ---------1000 hd -------------------- -------------------1 IA 1130 14270 15400 2 NC 1000 8800 9800 3 MN 580 5320 5900 4 IL 450 3800 4250 5 IN 330 2820 3150 6 MO 380 2670 3050 7 NE 395 2505 2900 8 OK 320 2100 2420 9 KS 165 1375 1540 10 OH 170 1330 1500 US 6209 53627 59837
ND Hog Inventory
0
50
100
150
200
250
300
350
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
All Breeding All Market
North Dakota Farrowings1000 head,
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
USDA/NASS, June, 2006
Canadian Prairie Hog Growth
Increasing Concentration, Integration, and Specialization
• Loss of 597,000 hog operations since 1980• Only 10% of hogs spot marketed• Top 20 “pork powerhouses” have 2.6 million sows
and account for over 40% of marketings• Over 70% of processing capacity by 5 packers• Multi-site specialized confinement production
systems integrating farrow-to-wean with wean-to-finish and market contracting
Total Hog Farms, 1000 farms United States
50.00
150.00
250.00
350.00
450.00
550.00
650.00
750.00
850.00
1970 1975 1980 1985 1990 1995 1996 1997 1998 1999 2000 2001
1970 = 871,2002001 = 81,130
Only 9.3% of the farms from 1970
USDA/NASS, June 2002
Share of Annual Hog Marketings by Size Category, 2000 United States
32
19
11 10 912
7
17 1712 12 12 13
17
27 5 7
10
18
51
0.00
12.00
24.00
36.00
48.00
60.00
< 1000 1000 -2000
2000 -3000
3000 -5000
5000-10000
10000-50000
> 50000
1988 1994 2000
University of Missouri, 2001
Total Hog Farms in North Dakota, 1000 farms
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
1975 1980 1985 1990 1995 2000 2001 2002 2003 2004 2005 2006
USDA/NASS, 2006
Hogs sold on spot market
Number of All Cattle and Beef Cow Operations
Milk Cow Operations
Hog Prices and Production Costs
• Price trends reflect economic forces of supply and demand
• Feed represents 65-70% of the cost of producing pigs (hog to corn ratio)
• Tendency for a 3-4 year “hog cycle”• Tendency for seasonal fall lows• Over 70% of hogs sold on carcass merit basis• Low grain prices and new technologies have
contributed to reduced costs• Rising grain price, and inflation cause for concern
Returns per Head, IA Farrow to Finish
-30
-20
-10
0
10
20
30
1991
1992
1993
1994
1995
1996
1997
1998
1999 20
020
0120
02
John Lawrence, Iowa State University
Confinement Farrow to Wean Budget
• 1200 sow unit • 21 pigs/sold/sow
– Farrowing building• 2500/sow 550,000
– Farrowing equip• 1250/sow 275,000
– Gestation building• 563/sow 630,000
– Gestation equip• 250/sow 280,000
– Site/office 90,000– Breeding stock 288,000
• 2.1 million• 1760/sow 34.18Breakeven
1.79utilities.48accounting1.75trucking5.13Breeding stock9.13building1.00vet6.94labor7.59feed
Costs/pig/sold
Litters Per Breeding Animal
1.52
1.34
1.46
1.621.67 1.68
1.64
1.75 1.73 1.74 1.77
1.00
1.25
1.50
1.75
2.00
1970 1975 1980 1985 1990 1995 1996 1997 1998 1999 2000
PorkFacts 2000/2001; University of Missouri
U.S. Pigs per Litter (Mar-May)
7.27 7.177.31
7.747.94
8.328.48
8.67 8.75 8.80 8.86 8.89 8.81
6.00
7.00
8.00
9.00
1970 1975 1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002
USDA/NASS, 2002
Confinement Swine Finishing Budget
• 1200 pig barn • 2.9 feed/gain • 1.71 adg• 60 to 265 pounds
– Finishing building• 164/pig 196,875
– equipment• 32/pig 37,500
– Site/office 18,750
• $253,200• 211/pig• $.41/lb breakeven 107.55Breakeven
.54utilities
.71accounting3.50trucking2.00interest9.35building1.80vet2.08labor36.10feed51.08Feeder pig
Hoop Barn Swine Finishing Budget
• 180 pig barn • 3.1 feed/gain • 1.68 adg• 60 to 265 pounds
– Finishing building• 55/pig 9,500
– equipment• 17/pig 3,000
– Site 4,000
• $16,500• $91/pig• $.42/lb breakeven 109.96Breakeven
1.00utilities3.25bedding3.50trucking1.81interest5.82building1.50vet2.70labor39.30feed51.08Feeder pig
#####Total expense54.86Feed total
45.82 Breakeven price54.86 Feed4.03Diet 6
44.00 Weaned pig cost10.08Diet 5
2,399 Gain:loss/year1.25 Transport11.38Diet 4
4.80 Net per pig1.50 Vet/med8.33Diet 3
1.00 Utilities8.91Diet 2
#####Total Income2.00 Ins/Tax3.82Diet 1
5.00 Labor4.63Phase 3
1.84 Pre-slaughter3.00 Principal1.98Phase 2
119.57 Market pigs4.00 Interest1.23Trans.
Income per head0.45SEW
500 Head sold/year
185.00 46% SBM
180 Pre-market weight5.50 Grain, $/cwt
6%$ 17.00 Pre-market price
3.10 G/F FE265 Slaughter wt50Transfer wt
1.80 Nursery FE94%$ 48.00 Market price10Wean wt, lb
How much do I gain or lose?
Live and Dressed Wt of Market Pigs
241 240 242 245250
257 254 257 257 259 262 265
172 175181
186 186 189 189 191 194 197
150
170
190
210
230
250
270
1970 1975 1980 1985 1990 1995 1996 1997 1998 1999 2000 2001
USDA/NASS, 2002
DDGS in Swine Diets
• Characteristics
– DM 87-93– CP 23-29– Fat 3-12– Lysine .59-.89– Dig P .71– Ca .05– Fiber 8– ME 1283-1633
• Inclusion Rates• Start Max
– Nursery 5 25– Grow-finish 10 20– Gest sow 20 50– Lact sow 5 20– Boars 20 50
$129.87 $128.31 $126.74 $125.18 $123.61 $122.04 $120.48 $240.00
$129.38 $127.82 $126.25 $124.69 $123.12 $121.55 $119.99 $235.00
$128.89 $127.33 $125.76 $124.20 $122.63 $121.06 $119.50 $230.00
$128.40 $126.84 $125.27 $123.71 $122.14 $120.57 $119.01 $225.00
$127.91 $126.35 $124.78 $123.22 $121.65 $120.08 $118.52 $220.00 $/Ton
$127.42 $125.86 $124.29 $122.73 $121.16 $119.59 $118.03 $215.00
$126.93 $125.37 $123.80 $122.24 $120.67 $119.10 $117.54 $210.00 Price
$126.44 $124.88 $123.31 $121.75 $120.18 $118.61 $117.05 $205.00 SBM 46.5
$125.95 $124.39 $122.82 $121.26 $119.69 $118.12 $116.56 $200.00
$125.46 $123.90 $122.33 $120.77 $119.20 $117.63 $116.07 $195.00
$124.97 $123.41 $121.84 $120.28 $118.71 $117.14 $115.58 $190.00
$124.48 $122.92 $121.35 $119.79 $118.22 $116.65 $115.09 $185.00
$123.99 $122.43 $120.86 $119.30 $117.73 $116.16 $114.60 $180.00
$3.13 $3.08 $3.03 $2.98 $2.93 $2.88 $2.83 Corn Price, $/Bushel
$111.80 $110.00 $108.20 $106.40 $104.60 $102.80 $101.00 Corn Price, $/Ton
DDGS Value per TonUsing SBM 46.5 and Dical 21
Industry Issues
• Animal Care and welfare
• Antibiotic is in animal production
• Environmental stewardship
• Bio-security
Protecting air and water
• Animal feeding operations regulated by ND Dept of Health under permit to operate
• State and local zoning and setbacks• Site selection and engineering for facilities
and waste containment• Odor regulations• Manure management plans
Realizing the Resource -organic fertilizer and soil amendment
• Typical manure production/composition
• ton/gal N(lb) P(lb) $(.25)• Solid
– Sow 3.4 31 21 13– Feeder 1.1 17 9 6.5
• Pit– Sow 1850 32 28 15– Feeder 530 17 14 7.75
• Lagoon– Sow 3000 10 7 4.25– Feeder 950 5 3 2
Good and Good For You!
• Excellent Source of Protein and B Vitamins
• Pork Chop– 170 calories– 6.5 g total fat
World Pork Production• 765,000,000 pigs
• 181,000,000,000 lbs of pork produced– Most consumed meat in the world
• Over ½ of pork produced in China, US is 2nd
• Exports: Canada – 1st; U.S – 2nd; Denmark – 3rd
• Imports: Japan – 1st; US – 2nd
• Per capita consumption– Denmark = 168 lbs per person per year– US = 68 lbs per person per year (carcass wt basis)– Japan = 38 lbs per person per year.
Slaughter, Million head
1.52
1.34
1.46
1.621.67 1.68
1.64
1.75 1.73 1.74 1.77
1.00
1.25
1.50
1.75
2.00
1970 1975 1980 1985 1990 1995 1996 1997 1998 1999 2000
2001 = 98.0