There is a strong trend toward using marketing contracts as an operation’s size increases. The 1,000-to-1,999 and the 2,000-to-2,999 size groups used the cash market most, while the > 50,000-head group used it least.

Note that the most popular contract is one that involves a formula price, often tied to the cash market. This is true even among producers running the largest operations. Thus, most hogs sold today are still tied to the cash market even though they’re not participating in the price discovery mechanism. Commonly the bonus price in these contracts is $1 to $2 per head over the cash market. Surprisingly, there are relatively few fixed-price or risk-share contracts used. They are more common among the group marketing 10,000 to 499,999 hogs a year. Clearly, producers still want to be able to top the market if and when possible.
Source: 2001 Pork Industry Structure Study, John Lawrence, Iowa State University, Glenn Grimes, University of Missouri.

Also note that vertically integrated producers report their sales to their packer owner as formula sales, and therefore packer ownership doesn’t appear explicitly in the table.

Table 13b looks specifically at hog ownership issues. According to the 2001 Pork Industry Structure Study, packers own approximately 23 percent of U.S. market hogs. Feed companies or feed dealers own approximately 10 percent, while veterinarians and genetic companies account for another 2 percent each. While it is possible that there is some double counting, these results suggests that 37 percent of U.S. market hogs are owned by processors or input suppliers and the remaining 63 percent are owned by farmers.