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Pork Powerhouses 2007

Agriculture.com Staff 02/10/2016 @ 4:51am

Some things you can just take to the bank. Sow herd expansion among the Pork Powerhouses would fall into that category -- even in the face of the biggest run-up in feed prices in history.

This is the fourteenth year of Successful Farming magazine's annual ranking of the Pork Powerhouses. The only constant in all that time is that the 20 biggest farms will add more sows every year, bringing further consolidation to the nation’s swine herd.

This year, they added another five percent for a total of 3.155 million sows. The largest, Smithfield Foods, now has more than 1 million sows in the U.S. and 1.2 million worldwide. The June USDA Hogs and Pigs Report said there are 6.12 million breeding animals in the U.S., meaning these largest producers control almost half of the nation's swine breeding herd.

It's for certain that these 20 Pork Powerhouses produce more than half of the pigs in the U.S. That's because they save more pigs per litter with their high-tech genetics and facilities. USDA says farms with over 5,000 head save almost half a pig per litter more than smaller farms. There is good evidence that these largest producers, which average over 1 million pigs per year, save even more pigs per litter and produce 55% to 60% of all U.S. pigs.

The incredible thing about expansion this year is that it comes in the face of the ethanol-driven explosion in the price of feed. (Granted, most of the new barns were under construction before the run-up in grain prices.) A year ago at this time, pork producers had been feeding corn that was at least $1 per bushel less than it has been for most of 2007.

Iowa State University estimates of the costs to finish hogs say that during the 2001-2006 time period, the cash price of corn averaged about $2.05 per bushel, and the feed cost to finish market hogs averaged $49 a head. If corn averages $3.60 a bushel in the future, the Iowa State estimates say the feed cost to finish a hog will be $69 -- 40% more than before the ethanol boom.

The largest producers are tight-lipped about their costs, but one manager says there is about a $6 per cwt range in cost of production from low-cost to high-cost among the Pork Powerhouses. The Iowa State numbers would say the break-even price to raise hogs is up $6 to $8 per cwt in the last year, to the mid-$40s.

Even at those prices, most Pork Powerhouses have made good money in the last year, with strong pork demand and market prices around $50 per cwt live weight.

One thing the largest producers do to control feed costs is feed more by-products from ethanol facilities. The high-fiber distillers' grains (DG) work better in cattle feeds, but their high protein levels can also work for hogs in limited doses. The savings are fairly modest: With corn at $120 a ton, dried DG at about $95, and DG feeding levels of 10% to 30%, the savings per hog of feeding DG could be $1 to $3 per head.

The Iowa Falls, Iowa, feed mill of Christensen Farms (one of five partners in Triumph Foods, number two on the list) makes 10,000 to 12,000 tons of feed a week for growing-finishing pigs. Nearly 10% of that feed is DG, trucked from a nearby Hawkeye Renewables ethanol plant.

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