Trends in the Missouri Swine Industry

Transcription

1 Trends in the Missouri Swine Industry Dee Hartley and Joe Parcell* d Overview The value of hog production in the state of Missouri followed a downward trend throughout the s. The value of hog production increased 39% from to 1997 (Figure 1, Table 1). A substantial drop in value of production occurred in due to prices reaching close to 40-year record lows. This drop in value was around 37.2% (Figure 1). In Table 1, the value of pork consumption is included to illustrate what has happened to the amount of pork consumed on farms. In 1980, $13,333,000 worth of pork was consumed on the farm, in that number decreased to $1,046,000, a drop of 92% (Table 1). This publication discusses Missouri s hog industry, its importance to the state, and how it compares to other states and the US in hog production efficiency. Number of Operations In 1980, Missouri held third place in the US with 6% of hog operations. By 1985 Missouri's rank was second with the same 6% of US operations (Table 2). Between and 1995, Missouri fell to seventh in hog operations. By 1997 Missouri fell to ninth place with 4% of the US total. Missouri rebounded in to 7 th again with 4.4% of U.S. hogs (Table 2). Regardless of this gain, the number of operations is still decreasing. By comparing the number of hog operations to the number of cattle and general livestock operations it is evident that Missouri is losing its hog operations at a high rate. Between 1980 and Missouri lost 87.5% of its hog operations (Figure 2, Table 4). This trend has been seen in other sectors of the livestock industry. Thirty-one percent of Missouri's Cattle operations have disappeared, and Missouri's total livestock operations have decreased by 15% (Figure 2). In 1980, there were 674,800 hog operations in the Unites States by there were 114,380 farms remaining (Table 3). Operation Size In 1980 Missouri ranked 5 th in the US for number of hogs on Missouri farms. By 1985 Missouri fell to 6 th place. After ranking 7 th from to, Missouri regained 6 th place in 1997 with a total of 3,550,000 head, but fell back to 7 th in with 3,300,000 head (Table 2). Between 1980 and 1991 the average hog farm size in Missouri remained below 200 head. In, hog farms started to grow in size rapidly. Between and the average farm size grew 206% to 660 head per farm (Table 4). This trend was due largely to Premium Standard Farms entering Missouri in and Murphy Family Farms entrance in. Farms with 1 to 99 head are decreasing rapidly. From 1980 to, the percent of operations in this category fell 42.6% (Figure 3). In, 54.5% of US hog operations were in the 1 to 99 head category, down from 73.8% in 1980 with 10% of the total hog inventory (Table 5). * Dee Hartley is an undergraduate research assistant and Joe Parcell is an Extension Economist, Department of Agricultural Economics, University of Missouri. 1

2 Operations in this category now contribute only 2% of the total US inventory (Table 5). Operations with 100 to 499 head have increased from 22.8% of Missouri operations to 36% of the operations in (Figure 3). Operations in the 500 and over category had the largest increase from 4% of Missouri operations to 18.2% of the operations (Figure 3). In, 86% of Missouri's hog inventory was located on operations of 500 head or more, up 152% from 1980 (Figure 4). Operations in the 100 to 499 head category have lost 71% of the total hog inventory in Missouri. Operations with 1 to 99 head have lost 89.4% of their inventories (Figure 4). The number of sows farrowing has decreased while, at the same time, the number of pigs per litter has increased. Pigs per litter have increased 30%, from an average of 7.18 to 8.75 pigs per litter between 1980 and (Figure 5). The U.S. percent change in pigs per litter increased 4% between 1997 and (Table 6). The annual average pigs-per-litter has increased 18.4% in Missouri since 1983, to This is higher than the U.S. average of 8.55 pigs per litter and the increase of 14.6%, and thus shows that Missouri s pig farms are more efficient in production than the US average (Table 7). The number of sows farrowing decreased 54% from 1980 to 1991, but has gradually increased from 130,000 sows to 195,000 throughout 1997, but ended at 190,000 (Figure 5). Missouri s sow farrowings increased 14% from 1983 to compared to the US average of 8.9% (Table 7). Missouri lost 11.9% of its annual farrowings compared to the US loss of 2.3% (Table 7). Again, the increase in efficiency could be due to the start of large-scale hog production in Missouri. The average breeding herd inventory in Missouri decreased 22.7% from 1983 to with a drop of 5.3% between 1997 and. US breeding herd inventory fell 6.6% from 1983 to and just 0.9% between 1997 and (Table 8). The annual pig crop in Missouri grew 28.7% between 1993 and compared to the US increase of 7.9%. Overall, between 1983 and the US pig crop increased 12.4% as opposed to Missouri's increase of 3.6% (Table 8). Table 9 shows that US pork production has increased 25.8%, the average breeding herd has decreased 10.3%, and the efficiency of the breeding herd has increased 40.2% since This indicates that increasing pork supply is due to more pigs per litter and not more sows or breeding stock. Marketings Pig shipments out of Missouri have grown considerably in the past ten years increasing from 25,806 in 1987 to a high of 239,706 in 1997(Figure 6). Between 1993 and 1997 the number of pig out shipments increased by 581%. Specifically, the increase in 1995 can be contributed to the presence of Murphy Family Farms in southwest Missouri. The percentage out-shipments have also had a dramatic increase in the last four years. Between and, the percentage of shipments by pig crop increased by 153% (Figure 7). Missouri marketings decreased from 1980 to 1991 and increased by 72.9% from 1991 to (Table 10). US marketings increased approximately 15% from 1997 to. Minnesota and Iowa showed the most growth from 1997 to with a growth of over 200,000 marketings. Missouri's average marketings per farm overtook the US average in 1993 and is now 62.2% higher (Figure 8). Since, Oklahoma has increased marketings by 778% due to the Seaboard Processing Facility coming on line in Guymon, Oklahoma in (Table 11). In Oklahoma ranked 18 th in the US in hog marketings, but is now ranked 8 th (Table 12). Missouri's share of annual US hog marketings have been volatile since Falling form 7.95% in 1970 to as low as 4.91% in and rising back 2

3 to around 7.10% in. Iowa continues to lead the pack with 21.89%. North Carolina's share of the US marketings has dropped off slightly to 15% in (Table 12). Nevertheless, North Carolina has kept its second place rank consistently throughout the years with 17,590,500 head in (Table 12). Live weights in the commercial slaughter industry in the US have increased 5.3% since Carcass weights have increased 9.5% since 1983 (Table 13). Pork production in the U.S. has increased in the last 15 years by 25.8%. Prices Received Barrow and gilt price has been volatile since Climbing to $58.5/Cwt. from 1995 to 1997, the hog industry looked promising, but late in 1997 prices fell to $38.6/Cwt. (Figure 9). In 1980, sow prices were around $44/Cwt, now the prices are around $40/Cwt (Figure 10). Input Costs Input costs are an important part of any agricultural industry. To see how these input costs add up we look at feeder pigs (Figure 11), corn prices (Figure 12), soybean prices (Figure 13), estimated nominal agricultural labor rates (Figure 14), and the estimated real agricultural labor rates (Figure 15). The seasonality of corn and soybeans can be seen in Figures 16 and 17. 3

4 Table 1. Value of Missouri Hog Production Source: Missouri Agricultural Statisics Nominal Dollars Real Dollars Nominal Value of Pork Value ($000) Value ($000) Consumed on Farm ($000) , ,748 13, , ,826 10, , ,538 9, , ,926 6, , ,014 5, , ,571 3, , ,144 3, , ,906 3, , ,961 2, , ,166 2, , ,315 3, , ,176 2, , ,884 1, , , , ,786 1, , ,560 1, , ,467 1, , ,044 1, , ,757 1,046 4

5 Table 2. Missouri's Swine Industry Rank Among States U.S. Rank Total % of US Total 1980 Hog Operations 3 n/a 6 All Hogs, Number on Farms 5 n/a Hog Operations 2 n/a 6 All Hogs, Number on Farms 6 n/a 6 Hog Operations 2 16, All Hogs, Number on Farms 7 2,800, Hog Operations 7 8, All Hogs, Number on Farms 7 3,550,000 6 Hog Operations 7 7, All Hogs, Number on Farms 7 3,500, Hog Operations 9 5,500 4 All Hogs, Number on Farms 6 3,550, Hog Operations 7 5, All Hogs, Number on Farms

6 Table 3. Number of Hog Operations, Marketings, and Marketings per Operation in U.S., Marketings Inventory Value Hogs per of Hogs Number of Marketed Operation December 1 Year Operations (1000 head) (head) (1000 Dollars) stopped publishing Source: USDA 6

7 Table 4. Missouri Pig Operations, Hogs and Pigs, and Ending Inventory Average Herd Size Hogs and Pigs Number of Average # (1000 Head) Operations per Operation

8 Table 5. Percentage of Hog Operations and Inventory by Size, 1985,, 1995,, 1997, and * head head head head head State Year Operations Inventory Operations Inventory Operations Inventory Operations Inventory Operations Inventory --percent-- Missouri n/a n/a n/a n/a n/a n/a n/a n/a Kansas n/a n/a n/a n/a n/a n/a North n/a n/a n/a n/a Carolina n/a n/a Nebraska n/a n/a n/a n/a n/a n/a Iowa n/a n/a n/a n/a n/a n/a Minnesota n/a n/a n/a n/a n/a n/a Oklahoma 1985 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a U.S n/a n/a n/a n/a n/a n/a *In a larger size class of producers with inventory of 1000 plus head was added, in 1995 larger size classes of head and 5000 head + were added Source: Meats Animals Production, Disposition, and Income, Various Issues, USDA. 8

9 Table 6. Annual and Quarterly Pigs/Litter in Missouri and U.S. Percent Change /97 98/93 98/88 98/83 Missouri Dec-Feb % 12.8% 18.9% 20.5% Mar-May % 13.4% 16.3% 15.6% Jun-Aug % 11.5% 17.6% 22.5% Sep-Nov % 7.5% 15.4% 15.4% Annual average % 11.3% 17.1% 18.4% U.S. Dec-Feb % 6.7% 12.5% 16.9% Mar-May % 0.0% 4.0% 7.0% Jun-Aug % 7.8% 14.4% 18.5% Sep-Nov % 7.5% 13.5% 16.1% Annual average % 5.5% 11.1% 14.6% Source: USDA Hogs and Pigs Report Table 7. Annual and Quarterly Sows Farrowing in Missouri and U.S. (thousands) Percent Change /97 98/93 98/88 98/83 Missouri Dec-Feb % 34.5% 21.9% 5.4% Mar-May % 8.1% 0.0% -18.4% Jun-Aug % 18.2% 11.4% -13.3% Sep-Nov % 8.6% 18.8% -17.4% Annual total % 16.4% 12.2% -11.9% U.S. Dec-Feb 2,808 2,723 2,808 2,677 2, % 4.3% 7.6% 4.3% Mar-May 3,494 3,307 3,220 2,952 3, % 0.0% -2.6% -7.8% Jun-Aug 3,174 3,072 2,972 2,946 3, % 2.8% -0.6% -3.8% Sep-Nov 3,008 2,964 2,982 2,939 2, % 0.4% 1.0% -0.5% Annual total 12,483 12,066 11,982 11,514 12, % 1.8% 1.1% -2.3% Source: USDA Hogs and Pigs Report Table 8. Size of Annual Pig Crop and Size and Efficiency of Breeding Herd in Missouri and U.S. Percent Change /97 98/93 98/88 98/83 Annual Pig Crop (000) Missouri 6,550 5,201 5,270 6,924 6, % 28.7% 30.4% 3.6% U.S. 93,194 92,883 97,050 99, , % 7.9% 12.7% 12.4% Average Breeding Herd Inventory (000)* Missouri % 1.8% -4.8% -22.7% U.S. 7,444 7,060 7,269 6,891 6, % -4.3% -1.5% -6.6% Sows Farrowing/Average Breeding Herd Inventory Missouri % 14.3% 16.6% 14.0% U.S % 4.8% 5.1% 8.9% Annual Pig Crop/Average Breeding Herd Inventory Missouri % 26.4% 35.4% 34.0% U.S % 11.1% 17.2% 25.2% * Average is based on Jun and Dec inventories prior to and on Mar, Jun, Sep, and Dec inventories since. Source: USDA Hogs and Pigs Report 9

10 Table 9. Pork Production and Size and Efficiency of Breeding Herd in U.S. Percent Change /97 98/93 98/88 98/83 Pork Production, million lbs. 15,117 15,623 17,030 17,275 19, % 11.6% 21.7% 25.8% Average Breeding Herd Inventory, thousand head* 7,752 7,232 7,164 6,891 6, % -2.9% -3.8% -10.3% Pork Production/Average Breeding Herd Inventory, lbs. 1,950 2,160 2,377 2,507 2, % 15.0% 26.5% 40.2% * Average is based on Jun and Dec inventories prior to and on Mar, Jun, Sep, and Dec inventories since. Inventory is lagged six months. Source: USDA Hogs and Pigs Report and Livestock Slaughter Table 10. Annual Hog Marketings (1000 Marketings), Selected States and U.S., North Year Missouri Carolina Nebraska Iowa Oklahoma Texas Arkansas Colorado Minnesota Kansas U.S ,910 2,525 5,017 20, , ,229 2,719 86, ,822 2,981 6,001 22, , ,008 3,450 98, ,991 2,612 5,203 20, , ,341 3,285 89, ,382 2,412 4,766 18, , ,421 3,088 82, ,511 2,625 5,263 19, , ,967 3,201 85, ,222 2,333 4,411 16, , ,067 2,442 73, ,038 2,750 4,576 18, , ,981 2,617 75, ,146 2,500 5,007 20, , ,831 3,077 80, ,842 2,950 4,949 19, , ,315 2,974 81, ,988 3,383 6,282 21, , ,889 3,305 92, ,273 3,872 6,602 23, ,189 1, ,362 3, , ,577 3,634 6,143 23, ,115 1, ,116 3,069 95, ,228 3,068 6,017 23, ,030 2,754 86, ,148 3,530 6,026 22, ,930 2,758 89, ,858 3,622 5,903 22, ,721 2,612 87, ,683 3,746 5,629 22, ,137 2,636 86, ,900 3,790 6,073 21, ,508 2,470 82, ,830 4,152 6,348 20, ,094 2,289 84,249 5,100 4,532 6,656 22, ,595 2,493 90, ,786 5,204 7,048 22, , ,095 2,598 92,553 4,485 5,044 6,917 21, , ,689 2,476 89, ,815 5,717 7,313 22, , ,847 2,469 92,293 4,863 7,022 7,648 25, , ,641 2,514 99, ,094 8,097 7,490 24, , ,370 2,472 97,911 5,847 9,849 7,342 24,834 1, ,800 1,087 8,699 2, , ,020 12,289 7,169 23,471 1, ,700 1,013 8,851 2, ,684 6,718 14,234 6,453 22,190 2, ,800 1,378 9,097 2, , ,672 16,935 5,754 21,218 3, ,820 1,544 9,041 3, ,301 8,327 17,591 5,889 25,666 4,966 1,168 2,026 2,351 11,145 3, ,275 Source: U.S. Department of Agriculture, Meat Animals Production, Disposition, and Income, Various Issues. 10

11 Table 11. Shares of Annual US Hog Marketings, Selected States North Year Missouri Carolina Nebraska Iowa Oklahoma Texas Arkansas Colorado Minnesota Kansas --Percent Source: Meat Animals Production, Disposition, and Income, Various Issues, USDA. Table 12. Hog Marketings of Ten Leading States,. Hogs Marketed Share of U.S. Hogs Marketed Share of U.S. Rank Rank State (1000 Head) (%) (1000 Head) (%) 1 1 Iowa 25, , North Carolina 17, , Minnesosta 11, , Illinois 8, , Missouri 8, , Indiana 6, , Nebraska 5, , Oklahoma 4, , Ohio 3, , Kansas 3, ,468 2 Table 13. Commercial Hog Slaughter Live and Dressed Weights in the U.S. Percent Change /97 98/93 98/88 98/83 Live Weight, lbs % 0.8% 2.8% 5.3% Carcass Weight, lbs % 3.3% 6.2% 9.5% Carcass/Live Weight % 3.0% 3.6% 4.2% Source: USDA Livestock Slaughter 11

12 Figure 1. Missouri Value of Hog Production ($1000) Figure 2. Missouri Swine, Cattle, and Livestock Operations 140, , ,000 (Number) 80,000 60,000 40,000 20, Livestock Farms Cattle Swine 12

13 Figure 3. Missouri Hog Farms by Size of Operation Head Head 500 Head & Over (% of Inventory) Figure 4. Missouri Annual Swine Inventory by Size of Operation (1980-) Head Head 500 and Over (% of Inventory)

14 Figure 5. Missouri Quarterly Sows Farrowings and Pigs Per Litter (1980-) Sows Farrowed Pigs Per Litter Sows Farrowed (1000 head) Pigs per Litter (head) Figure 6. Missouri Monthly Feeder-Pig Out Shipments (head)

15 Figure 7. Missouri Annual Percentage of Feeder Pig Out Shipments to Pig Crop (1980-) (%) Figure 8. Missouri and US Average Marketings per Farm 1,800 1,600 1,400 1,200 Missouri Marketings US Marketing 1, (1000 head) 15

16 Figure 9. Missouri Barrow and Gilt Price Figure 10. Missouri Sow Price $/Cwt $/Cwt

17 Figure11. Missouri Feeder Pig Price Figure12. Missouri Corn Price $/Cwt $/Bu. 17

18 Figure 13. Missouri Soybean Price $/Bu. Figure 14. Quarterly Estimated Nominal Agricultural Labor Rates 8 7 ($/hour) Field Livestock

19 Figure 15. Quarterly Estimated Real Agricultural Labor Rates (Deflated by CPI 1997=100) 8 7 $/hour 6 5 Field Livestock

20 Figure 16. Missouri Corn Seasonal Price Index 120% Percent of Annual Price 110% 100% 90% % Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Figure 17. Missouri Soybean Seasonal Price Index 110% 106% Percent of Annual Price 102% 98% 94% % Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 20