National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 2
The U.S. pork industry represents a significant value-added activity in the agricultural
economy and a major contributor to the overall U.S. economy. The $28.02 billion of
gross cash receipts from hog marketings in 2021 represents only a portion of the total
economic activity supported by the industry. Although the size and structure of the U.S.
pork industry has changed over time, increased levels of production have supported
jobs and generated earnings in the national economy. An estimated 613,823 U.S. jobs
are involved in various aspects of the pork value chain — ranging from input suppliers
to producers to processors and handlers as well as main street businesses that benefit
from purchases by people in these industries. Overall, an estimated $35.86 billion of
personal income and $57.20 billion of gross national product are supported by the U.S.
pork industry based on 2021 levels of production.
This report documents trends in U.S. pork production and examines the current
structure of production, input purchasing, and processing of the pork industry in the
United States. The contribution of these activities to the overall economy in terms of
employment, income and value added is also estimated and presented in detail.
1
Figure 1: U.S. Hog Inventory, Dec. 1
Hog inventories in the United States
have varied cyclically over time but
have trended upward from 59.11
million head in 2000 to 74.15 million
head in December 2021 (Figure 1).
Annual cash receipts from the sale of
hogs were $28.02 billion in 2021, up
46.2% from the previous year. This
figure was based on a pig crop of
132.95 million born in the United
States and in-shipments from Canada
of 4.98 million feeder pigs fed in the
United States and 1.55 million market
hogs and slaughter sows and boars
processed in U.S. packing plants.
About the authors: Holly Cook is Staff Economist, National Pork Producers Council; Lee Schulz is Associate
Professor and Extension Livestock Economist, Department of Economics, Iowa State University.
0.0
20.0
40.0
60.0
80.0
100.0
Million Head
Market Breeding
Source: USDA-NASS Hogs and Pigs Report
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 3
Figure 2: U.S. Hog Farms and Hogs per Farm
Total hog marketings in the United
States have increased in recent years
along with the number of farms raising
hogs. From 1997 to 2012, the number
of farms with hogs decreased from
124,889 to 63,246, but by 2017 the
number of farms increased to 66,439
(Figure 2). Meanwhile, the average
inventory of hogs per farm has
increased from 490 to 1,089.
Figure 3: U.S. Hog Inventory Distribution
Figure 3 illustrates the distribution of
the U.S. hog inventory. About 7% of
U.S. hogs are on farms with less than
2,000 head in inventory, 20% of the
inventory is on farms with 2,000 to
4,999 head, and 73% are on farms
with 5,000 or more hogs. Compared
with the 2012 Census of Agriculture,
there are now about 2,600 more farms
in the smallest size category, six more
farms in the middle category, and
almost 600 more farms with
inventories greater than 5,000 hogs.
The prominence of the U.S. pork
industry and its growth in the global pork export market is no accident. Competitive
production of feed grains, significant natural resources and industry infrastructure have
allowed the United States to position itself as an efficient producer for both domestic
and global pork consumers. Because this report is concerned with the impacts and
resources used in pork production, the analysis focuses on the value of hogs produced
in the United States as the critical measure that drives expenditure levels for various
hog-related inputs and investments.
58,115
Farms
4,724
Farms
3,600
Farms
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
<2,000 2,000 to 4,999 5,000+
-
200
400
600
800
1,000
1,200
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
1997 2002 2007 2012 2017
Farms Hogs per Farm
Source: USDA-NASS Census of Agriculture, 2017
Source: USDA-NASS Census of Agriculture, 2017
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 4
The $28.02 billion of hog marketings in 2021 represents the aggregate value of the pork
industry at the farm level. In addition to these farm-level effects, the industry’s backward
and forward linkages generate significant additional impacts throughout the U.S
economy. The backward linkages include purchased inputs, supplies and services used
by hog producers. The forward linkages include further value-added activities occurring
after the farm gate, such as slaughter, processing and food preparation. Total inputs,
including labor, used by the U.S. hog industry were estimated based on aggregated
cost of production budgets weighted according to the share of hog production occurring
in different types and sizes of production systems.
Different budgets representing three sizes of farrow-to-finish operations were
developed. While some producers in the U.S. may specialize in breed-to-wean or wean-
to-finish operations, the industry as a whole operates as farrow-to-finish with the
exception of a relatively small percentage of pigs imported from Canada. The farrow-to-
finish operations were categorized by size because hog production is subject to
economies of scale where per unit input use declines as operations increase in size.
The share of U.S. pork production estimated to be in each classification of facility was
based on the percent of inventory in three size groups reported in the 2017 Census of
Agriculture and reflected in Figure 3.
The cost of production and input usage was then calculated for each size of farrow-to-
finish operation based on cost of production budgets developed by Iowa State
University Extension and Outreach and were updated to reflect rising nonfeed variable
and fixed costs. The weighted cost and returns of production and totals of feed use,
other direct inputs, annual depreciation on capital investments, labor requirements and
returns to management and capital are presented in Table 1 and summarized in Figure
4. These aggregates are also depicted schematically in Figure 5. The prices used in the
analysis are intended to reflect long-run conditions in the industry and are based on 10-
year projections made by the Food and Agricultural Policy Institute (FAPRI) in March
2022. Based on these long-run prices, annual revenue from hogs is estimated to be
$24.3 billion.
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 5
Figure 4: Estimated Share of Production Costs
Estimating the labor component
involved in hog production presents a
special challenge due to limited
employment data being reported at
the farm level and the mix of farm
operators and employees involved in
production. Because we are most
interested in measuring labor on a
comparable per unit basis, a full-time
equivalent (FTE) of 2,080 hours per
year per worker was deemed to be
the most appropriate measure of
labor. This FTE standard was then applied to the total hog production in each size
classification in the nation and then summed to arrive at a total labor requirement.
The rate of FTE labor required per 10,000 hogs raised in farrow-to-finish operations
ranged from 4.5 for the small facilities to 2.9 for the medium-scale facilities to 2.3 for the
large systems.
Although an estimated 66,439 farms are reported to be involved in hog production in
2017, based on the FTE standard of these budgets, an estimated 36,035 workers are
required to produce the current volume of hogs in the United States (Table 1). While the
converted FTE numbers are used in our economic impact estimates, it is important to
recognize the larger number of U.S. farms involved in some level of pork production.
The lower level of the schematic in Figure 5 represents purchased cash inputs used by
producers at the farm level. In most hog-producing states, a significant portion of
purchased inputs are produced within the state, generating additional economic activity
in the local economy.
The estimated total value of direct inputs used in the United States sum to $17.8 billion
based on long-run feed prices. Additional costs for depreciation of fixed assets and
facilities total an estimated $2.7 billion. Labor and management expenses add an
additional $2.3 billion of costs for a total of $22.8 billion of aggregate input costs used in
hog production in the United States. The residual value between inputs and revenue is
estimated to total $1.5 billion and can be described as returns to capital.
Total
Feed
56%
Other
Direct
22%
Facilities
12%
Labor & Mgt
10%
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 6
The largest single category of expenditure is feed. With 140.1 million head produced
annually, 1.6 billion bushels of corn valued at $7.72 billion are used in the United States.
The 1.6 billion bushels of corn represent 10.8% of the U.S. corn crop in 2021. The 10.5
million tons of soybean meal valued at $3.39 billion used in hog production represents
the meal production from 433 million bushels of soybeans, or 9.8% of the 2021 U.S.
soybean crop. The remaining feed supplements and additives represent another $1.62
billion of purchased inputs from suppliers in the United States. Overall, the use of this
scale of feed ingredients helps support the soybean processing industry, local elevators,
transportation services, and others based in local communities.
Figure 5. U.S. Pork Industry Estimated Production Flows, 2021 Production Year
*Final demand estimates based on prorating U.S. slaughter (lbs) proportionately to total end uses.
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 7
Table 1. Cost of Production and Returns Associated With U.S. Average Farrow-to-
Finish Operation, Long-run Prices and 140.1 Million Head Marketed
*10-year projections made by the Food and Agricultural Policy Institute (FAPRI) in March 2022.
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 8
In addition to the direct sales and purchases described above, the U.S. pork industry
generates further activity through its backward and forward linkages to other industries.
Backward linkages include purchases of inputs, supplies, trucking and other services
required to produce hogs, while forward linkages are tied to the hog slaughter and pork
processing industries. When hog producers and pork processors make purchases from
other industries, these expenditures support additional jobs and earnings beyond the
pork industry and induce spending in a variety of sectors.
To capture the total economic contribution of the pork industry, this analysis uses a
modified input-output (I-O) model of the United States within the IMPLAN modeling
system. IMPLAN is a customizable system that utilizes a 546-industry matrix and an
extensive database to account for all inter-industry transactions within the economy and
calculate the impact of an initial industry change. When measuring the overall
contribution of an entire industry, the final estimates essentially quantify the impacts that
would be lost if the pork industry was removed from the U.S. economy.
The I-O model for the United States was driven by estimates of 2021 hog marketings,
the employment level and production costs calculated in the previous section and
estimates for employment and labor income within the hog slaughter and pork
processing industries. For this portion of the analysis, FTE employees were converted
to the annualized equivalents used by IMPLAN. Estimates for the hog slaughter and
pork processing industries were based on plant location and size information from
federal and state inspection agencies, employment information from the U.S. Census
Bureau, and state slaughter and production estimates produced by USDA. Because the
IMPLAN-defined industries that represent hog production and pork processing include
additional activity such as other animal production and beef processing, providing these
industry-specific inputs helps customize the model for the pork industry.
2
After initial industry values were estimated, the model was carefully modified to avoid
double-counting the upstream impacts of hog production and to eliminate buybacks
within and across the industries of interest. For example, the hog slaughter industry
purchases live hogs as an intermediate input. The economic value of hog production is
2
This analysis uses IMPLAN’s industry 14 (animal production except cattle, poultry and eggs), industry 89 (animal,
except poultry, slaughtering) and industry 90 (meat processed from carcasses). To further customize the model,
purchases of beef cattle were removed from industry 89 and industry 90 spending patterns and then output was
derived from intermediate inputs (live hogs plus other nondurable goods) and labor costs.
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 9
already fully accounted for as part of this analysis, so the model was adjusted to include
only the additional value generated by slaughter and processing activity. The model
also excludes additional effects from intra-industry purchases (e.g., hog producers
buying feeder pigs, breeding stock, etc.) and purchases from the other industries being
analyzed (e.g., the further processing industry purchasing carcasses from the slaughter
industry).
After making these adjustments, the I-O model was run to calculate the multiplied-
through effect of the entire pork industry on the U.S. economy. The total contribution
includes the direct, indirect, and induced values for the output, labor income, value
added, and jobs supported by the industry. Direct impacts are the initial values of sales
and employment in the industry, indirect impacts stem from expenditures on inputs, and
induced impacts are supported by purchases made with income earned in the direct or
indirect industries. The results of this analysis are summarized in Table 2.
Table 2. Total Economic Contribution of Hog Production and Pork Processing Industry
Source: IMPLAN Model for the United States with inputs calculated by the user.
Output, or gross sales, measures the value of production within an industry and is the
broadest measure of economic activity. The estimated $28.02 billion in gross output, or
sales, from hog production in 2021, supported additional sales in the state’s hog
slaughtering and processing sector, as well as additional input purchases and spending
that totaled $178.36 billion of direct, indirect, and induced sales in the U.S. economy. In
this analysis, total output excludes the indirect effects of purchased hogs and
carcasses. However, this number should be used with caution because the value of the
hog is still counted twice, both at the producer level and as part of the total value of pork
sold at the processor level.
Value added is often a preferred measure of economic activity because it includes only
the portion of output that exceeds the cost of intermediate inputs used in production,
therefore eliminating the double-counting issue described above. This includes wages,
taxes and profits, and this represents the industry’s contribution to gross domestic
product (GDP). Overall, an estimated $57.20 billion of value added in the U.S. economy
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 10
is linked directly and indirectly to the pork industry. Value added grows when sales and
personal incomes increase faster than the cost of intermediate inputs.
The U.S. pork industry supports a total of $35.86 billion in labor income paid to 613,823
workers across many industries. This includes the 36,035 FTE workers at the farm level
and an estimated 138,018 employees in the hog slaughter and processing sectors. The
estimate of $2.30 billion in direct labor income within the hog production industry
includes wage and salary income as well as proprietor income. An estimated $6.92
billion is also paid to workers in the slaughter and processing industry. The pork industry
supports additional jobs within agriculture and manufacturing, as well as in industries
like trucking, finance, insurance, real estate, trade and other service sectors. Estimates
of the pork industry’s total contribution are presented at an eight-sector level of detail in
Table 3.
Table 3. Total Impact by Industry Group
Source: IMPLAN Model for the United States with inputs calculated by the user.
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 11
The continued growth of the U.S. hog inventory is feeding growing demand from
domestic and export customers (Figure 6). Compared with 1990, domestic consumption
in 2021 was 951.4 million pounds less, an amount equal to about 3% of 2021
production. However, exports were 6.8 billion pounds higher than in 1990, totaling $8.1
billion dollars in value and adding over $62 per head in value to each hog marketed.
Figure 6: Pork Consumption and Exports,
Billion lb.
The final demand uses of processed
pork products in 2021 were an
estimated 7.03 billion pounds going
into foreign markets and 14.83 billion
pounds into domestic markets. These
estimates are based on prorating the
U.S. production proportionally to total
end uses.
In 2021, about 25% of U.S. pork
production was exported. Using this
export share implies that a
comparable share of the total
economic contribution, or 155,847
jobs and $9.10 billion of personal
income in the U.S. results from exporting pork and pork products to foreign markets.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Exports
Domestic
Domestic Consumption Exports
Source: USDA World Supply and Demand Estimates
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 12
The pork industry has undergone significant changes over the last several decades,
transforming from a commodity-oriented industry that relied largely on family labor to a
more capital-intensive, science-and-technology-driven industry producing products for
many diverse consumers. The industry also faces considerable challenges in the
coming years as it works to capture opportunities of increased consumer expectations
and expanding markets for U.S. pork.
Industry Size and Structure | The average U.S. farm size has increased in recent
years, though the trend toward fewer farms has slowed. In fact, from 2012 to 2017, the
number of hog farms in the United States increased by almost 3,200. However, as
global market conditions and competing demand for feed grain inputs push production
costs higher, effective marketing, financial planning and risk management strategies are
becoming necessary ingredients for industry survival. Producers of all sizes are asking if
they are large enough, and contract production arrangements are becoming
increasingly popular. It remains true that effective management is key to success
regardless of farm size or structure.
The family farm remains the dominant business structure for the U.S. hog industry.
Family farms comprise 96% of all U.S. farms with hogs and account for 81% of the hog
inventory, according to the 2017 Census of Agriculture Farm Typology report.
Regardless of the size or ownership of the enterprise, hog and pork production does
create economic activity in the state and community where it is located. If the firm is not
locally owned, the profits may not remain entirely in the community. However, major
inputs (feed, labor, utilities, trucking, services, property taxes, etc.) will likely still be
provided locally or within the region.
Animal Health and Biosecurity | Domestic disease pressure has heightened in recent
years, which has led to a lag in productivity growth (pigs per litter, farrowings per sow,
etc.). Staying prepared and having well-thought-out animal health and biosecurity
programs in place remain critical to protecting against new, emerging and foreign
diseases. Genetic technology has advanced in recent years, and reducing disease
pressures may allow potential productivity gains to be realized. In addition, the industry
must remain diligent in its efforts to prevent an outbreak of African swine fever (ASF) in
the United States. Such an outbreak would be a devastating animal health crisis with
extremely negative implications for market prices, export opportunities and the overall
economy.
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 13
Worker Shortages | Increased levels of production and the adoption of new technology
have supported a greater demand for skilled, full-time workers on hog farms. Pork
packing and processing plants also require more workers to operate at full, optimal
capacity levels. However, maintaining adequate staffing levels on farms and in
processing plants has been increasingly difficult in recent years despite higher wage
offerings, bonus programs and competitive benefits.
While current tightness in the broader U.S. labor market plays a role, many labor
challenges are tied to long-term demographic trends in rural America. Slowing U.S.
population growth and increased levels of outmigration have caused populations of
rural, farming counties to decline over time while the median age of the rural workforce
continues to increase. The result is a shrinking and aging rural labor force that is
increasingly unable to fill the workforce needs of the pork industry.
Current visa programs that allow foreign-born workers to fill on-farm job openings in
other industries are not well-suited for an industry that requires year-round animal care
and technical support. Without policy intervention, labor shortages threaten to limit pork
production in the years to come, undermining an important sector of the economy.
Exports and Trade | Exports are an important component of overall pork demand. The
United States is 1 of 3 top pork producing and exporting countries in the world,
accounting for about 26% of global pork exports in 2021. Despite rising breakeven price
levels in recent years, the U.S. remains a relatively low-cost producer with significant
natural resources and has been a reliable supplier amid worldwide supply chain issues.
These are all important considerations for global buyers.
More than 25% of all U.S. pork is exported, adding over $62 per head to the value of
each hog marketed. Expanding market access by removing nontariff trade barriers for
U.S. pork will be important for future industry growth. Relationships with major trade
partners must be solvent for trade to remain the important component it is.
Environment and Sustainability | The environmental impact of pork production is an
important matter that is not independent of the industry’s economic contribution. The
most recent retroactive life-cycle assessment of the pork industry shows that U.S.
producers have significantly reduced the resources required to produce each pound of
pork. According to the U.S. Environmental Protection Agency, hog production
accounted for 0.47% of total U.S. greenhouse gas emissions in 2020, making the
industry’s carbon footprint per pound of pork produced nearly 21% smaller than in 1990.
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 14
Because of differences in climate, cropping patterns and manure management practices
across the country, uniform environmental standards may have differing regional
impacts on hog production. For this reason, the pork industry’s sustainability goals and
metrics are focused on outcomes rather than specific practices.
3
As a whole, the pork
industry has established goals to continue improving water-use efficiency, soil, land,
biodiversity and nutrient management while further reducing the industry’s carbon
footprint by 2030.
Opportunities for Value-added Production | Markets for products with specific
attributes (e.g., organic, antibiotic use, animal housing specifications, etc.) have
expanded in recent years. As demand for these types of products increases, different
segments of the marketing channel must communicate more closely with one another.
This communication, whether formal (via specification contracts) or informal (through
market signals) will coordinate to deliver specific characteristics for a given product line.
Process-verified programs present additional value-added opportunities for the pork
industry. However, it is important that any market growth be based on consumer
demand for differentiated products rather than imposed regulations, which inflict
significant costs and inefficiencies on producers and the entire pork value chain. Each
individual producer will face decisions at the farm level about which product channels
they will supply based on the costs and incentives to produce.
Looking Ahead | The future size and structure of the U.S. pork industry will be
determined by the individual decisions of more than 60,000 farms, the devoted
individuals who operate them and their potential successors. With current
demographics, including producer age and an equity distribution skewed to older
producers, a large share of productive assets in the pork industry will likely change
hands over the next decade. Future policy and educational efforts should be designed
not only to encourage and assist beginning farmers entering pork production but also to
address long-run challenges and enhance their chances of surviving, prospering and
growing as viable farm operators.
3
For more information, see the 2021 Pork Industry Sustainability Report.
National Pork Producers Council
U.S. Pork Industry: Current Structure and Economic Importance
July 2022 | Page 15
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