"Change is inevitable, progress is optional" – never has a quote been more telling than when applied to the U.S. pork industry. The industry has changed dramatically in the 14 years that Pork magazine has conducted the Pork Industry Structure Study.
Presented here is the first set of data from the 2001 Pork Industry Structure Study conducted in cooperation with Pork magazine, the University of Missouri and Iowa State University. Additional assistance came from the National Pork Board, PIC, DeKalb Choice Genetics, Land O' Lakes Farmland Feed and the Research Institute for Livestock Pricing.
Agricultural economists Glenn Grimes, University of Missouri, and John Lawrence, Iowa State University, crunched the numbers and provide the analysis presented here. For additional insight into these numbers, check out the article titled "What Lies Ahead" in the June 2001 issue of Pork magazine – or search for it within the editorial archives offered within this Web site.
The 2001 Pork Industry Structure Study:
- Industry Structure – This section paints an overall picture of what the industry looks like in 2000/2001.
- Market Share – This section shows who currently leads the industry in terms of hog marketings and how that has changed.
- Growth Plans – This section looks at past and future production growth plans of producers.
- Growth Limitations – This section asks what are the barriers that would prevent or change future growth plans.
- Economic Considerations – This section provides a glimpse at production costs and hog price levels required for producers to compete into 2003.
- Marketing Contracts – This section details how Market Contracts are used and have changed in recent times.
- Market Contract's Market Share – This section provides a look at who is using Market Contracts in the industry.
- Influencing Change – This section shows how Market Contracts may have influenced producer decisions.
- Market Contracts Pay – This section reports if producers think they benefit from Market Contracts or not.
- Changing Attitudes – This section details information gathered while asking producers their opinions of Market Contracts.
- Production Contract's Market Share – This section details how Production Contract's Market Share are used.
- Production Contract's Pros and Cons – This section details how most support production contracts.
- Production Contract's Satisfied Participants – This section details how most were satisfied with production contracting.
- Production Contract's Future Due Date – This section details when contracts are set to expire.
- Producer Networks Networks Begin to Decline – This section details how the former hot trend is stabilizing.
- Miscellaneous Findings Producer And Owner Age Trends – This section details the average age of producers and the trend surrounding age.
- Carcass-Merit Selling – This section details who is using this very popular option.
- Artificial Insemination – This section details the increases in AI use.
- Accessing Information – This section details who producers expect to have important information.
Here's some background on the survey procedures:
- Two nearly identical surveys were conducted during February and March 2001, regarding actual production in 1999 and 2000, as well as plans for 2001 and 2003.
- One survey was sent to 8,400 pork-producing operations selected randomly from five size categories from Pork magazine's mailing list. The response rate was 17 percent.
- The second survey involved operations marketing 50,000 or more hogs annually. This survey was faxed to the participants, and Glenn Grimes monitored the responses. The final numbers reflect 156 of these operations.
- Responses were sorted by ownership. Employees and contract growers were excluded from the analysis to eliminate duplication.
The take-away message from the 2001 Pork Industry Structure Study depends on your future business strategy. Consolidation will continue and the competition will intensify.
Producers with the best management or deepest pockets will compete in the long run, regardless of operation size.