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The Changing Economics of U.S. Hog Production

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  • Key, Nigel D.
  • McBride, William D.

Abstract

The increasing size and specialization of hog operations reflect structural change in U.S. swine production during the past 15 years. The number of farms with hogs has declined by over 70 percent, as hog enterprises have grown larger. 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. Operations producing under contract are larger than independent operations and are more likely to specialize in a single phase of production. These structural changes have coincided with substantial gains in efficiency for hog farms and lower production costs. Most of these productivity gains are attributable to increases in the scale of production and technological innovation. Productivity gains likely contributed to a 30-percent reduction in the price of hogs at the farm gate.

Suggested Citation

  • Key, Nigel D. & McBride, William D., 2007. "The Changing Economics of U.S. Hog Production," Economic Research Report 6389, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:6389
    DOI: 10.22004/ag.econ.6389
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    References listed on IDEAS

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    1. Key, Nigel & McBride, William D., 2008. "Do Production Contracts Raise Farm Productivity? An Instrumental Variables Approach," Agricultural and Resource Economics Review, Cambridge University Press, vol. 37(2), pages 176-187, October.
    2. Tim Coelli & Antonio Estache & Sergio Perelman & Lourdes Trujillo, 2003. "A Primer on Efficiency Measurement for Utilities and Transport Regulators," World Bank Publications - Books, The World Bank Group, number 15149.
    3. Nigel Key & William McBride, 2003. "Production Contracts and Productivity in the U.S. Hog Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 121-133.
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    Cited by:

    1. Key, Nigel & McBride, William & Mosheim, Roberto, 2008. "Decomposition of Total Factor Productivity Change in the U.S. Hog Industry," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(1), pages 137-149, April.
    2. Yu, Xiaohua & Abler, David, 2014. "Where have all the pigs gone? Inconsistencies in pork statistics in China," China Economic Review, Elsevier, vol. 30(C), pages 469-484.
    3. McBride, William D. & Mathews, Kenneth H., Jr., 2011. "The Diverse Structure and Organization of U.S. Beef Cow-Calf Farms," Economic Information Bulletin 102764, United States Department of Agriculture, Economic Research Service.
    4. Carl Gaigné & Julie Le Gallo & Solène Larue & Bertrand Schmitt, 2012. "Does Regulation of Manure Land Application Work Against Agglomeration Economies? Theory and Evidence from the French Hog Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 116-132.
    5. Laroche Dupraz, C. & Postolle, A., 2013. "Food sovereignty and agricultural trade policy commitments: How much leeway do West African nations have?," Food Policy, Elsevier, vol. 38(C), pages 115-125.
    6. Nene, Gibson & Azzam, Azzeddine M. & Schoengold, Karina, 2009. "Environmental Regulations and the Structure of U.S. Hog Farms," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49395, Agricultural and Applied Economics Association.
    7. MacDonald, James M. & Korb, Penni & Hoppe, Robert A., 2013. "Farm Size and the Organization of U.S. Crop Farming," Economic Research Report 262221, United States Department of Agriculture, Economic Research Service.
    8. Tian, Xu & Sun, Feifei & Zhou, Yingheng, 2015. "Technical Efficiency and Its Determinants in China's Hog Production," 2015 Conference, August 9-14, 2015, Milan, Italy 212718, International Association of Agricultural Economists.
    9. Hennessy, David A. & Zhang, Jing & Bai, Na, 2019. "Animal health inputs, endogenous risk, general infrastructure, technology adoption and industrialized animal agriculture," Food Policy, Elsevier, vol. 83(C), pages 355-362.
    10. Larue, Solène & Latruffe, Laure, 2009. "Agglomeration externalities and technical efficiency in French pig production," Working Papers 210403, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    11. Timothy A. Wise & Sarah E. Trist, "undated". "Buyer Power in U.S. Hog Markets: A Critical Review of the Literature," GDAE Working Papers 10-04, GDAE, Tufts University.
    12. Key Nigel, 2011. "Does the Prevalence of Contract Hog Production Influence the Price Received by Independent Hog Producers?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-26, May.
    13. Luca Sartore & Yijun Wei & Emilola Abayomi & Seth Riggins & Gavin Corral & Valbona Bejleri & Clifford Spiegelman, 2020. "Modeling swine population dynamics at a finer temporal resolution," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 36(6), pages 1060-1079, November.
    14. MacDonald, James M., 2011. "Why Are Farms Getting Larger? The Case Of The U.S," 51st Annual Conference, Halle, Germany, September 28-30, 2011 115361, German Association of Agricultural Economists (GEWISOLA).
    15. Maples, Joshua G. & Lusk, Jayson L. & Peel, Derrell S., 2019. "Technology and evolving supply chains in the beef and pork industries," Food Policy, Elsevier, vol. 83(C), pages 346-354.
    16. James M. MacDonald, 2014. "Comment on "Influences of Agricultural Technology on the Size and Importance of Food Price Variability"," NBER Chapters, in: The Economics of Food Price Volatility, pages 54-58, National Bureau of Economic Research, Inc.
    17. McBride, William D. & Key, Nigel, 2013. "U.S. Hog Production From 1992 to 2009: Technology, Restructuring, and Productivity Growth," Economic Research Report 262217, United States Department of Agriculture, Economic Research Service.
    18. Carl Gaigne & Julie LeGallo & Bertrand Schmitt, 2011. "Does Environmental Regulation Work Against Agglomeration Economies? Evidence From French Hog Production," ERSA conference papers ersa10p1326, European Regional Science Association.
    19. Xiao, Hongbo & Wang, Jimin & Oxley, Les & Ma, Hengyun, 2012. "The evolution of hog production and potential sources for future growth in China," Food Policy, Elsevier, vol. 37(4), pages 366-377.
    20. Mathews, Kenneth H. & Jones, Keithly G. & McConnell, Michael J. & Johnson, Rachel J., 2013. "Trade-adjusted measures of productivity increases in US hog production," Agricultural Systems, Elsevier, vol. 114(C), pages 32-37.
    21. Key, Nigel D. & McBride, William D. & Ribaudo, Marc, 2008. "Changes in Manure Management in the Hog Sector," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6071, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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