Costs and Structure of U.S. Hog Production, 1988-91

Hog producers' receipts and costs from 1988 through 1991 showed that net returns peaked in 1990. Hog and pig prices were higher than in 1988-89 with lower feed prices, which also increased returns for feeder pig producing and feeder pig finishing operations in 1990. The decline in net returns in 1991 was caused by lower prices in that year for slaughter hogs, feeder pigs, and cull hogs. Improved technologies led to more efficient production. Feed use declined 14 percent, or 60 pounds, per hundredweight of hogs and pigs sold from 1980 to 1988, with the North Central States showing the lowest feed expenses. Litter size continued an upward trend. Operations have on average become larger, with the large firms weaning more pigs per litter earlier at smaller weights and marketing hogs at slightly lower weights, although such large firms have relatively higher expenses for veterinary costs and labor. In all, the large operations were not much more profitable than the small ones, with the increased profits coming mostly from increased volume.