Opportunities in Coordinated Hog Production

Purdue University 1997 Swine Research Report. Hogs have traditionally been raised on independent farms in which most of the needed services were provided by that farm. Resources included ownership of all hogs and facilities, land, labor, management, and risk taking. In addition, the type of production facilities and specific management practices such as the nutrition, genetics, health, handling, and marketing programs were independent decisions. New technology has added to the complexity of hog production at the same time that larger production units are driving costs lower. This means that it is more difficult for traditional farms to keep up with the required information flows, to implement new technology, and to obtain sufficient size to gain full economies of scale. Coupled with these dilemmas is the advent of technology, including large sow units, enhanced genetics, segregated early weaning, all-in all-out production, and multiple-site rearing. As a result of these changes, the industry has been thrust into a period of dramatic change in which small farms are rapidly leaving the industry, causing sharp reductions in the total number of hog farms in the country as shown in Figure 1. As small farms decline, they are replaced by much larger and more technologically complex units which are becoming increasingly important in the scope of total production. As an example, farms with an inventory of 1 to 99 animals represent 61% of the total operations in the country, but only 3% of the total inventory. On the other hand, farms that have 2,000 or more animals are only 3% of the total farms, but 51% of the total inventory (Figure 2). One of the natural responses of traditional producers to these changes is to search for ways to gain the full range of advantages in information collection, technology access and implementation, and size accumulation. Coordinated hog production is one of the alternatives.