Economist: Hog Production Rise Beats Other Livestock

Hogs had the largest increase in productivity over the last 25 years, using a simple-to-compute measure of livestock productivity that allows comparison across livestock species, according to a study published in the University of Illinois’ Farmdocdaily.

Carl Zulauf, Department of Agricultural, Environmental and Development Economic at Ohio State University, did the study, explaining that production was divided by the herd that produces the animals that produce the output.  The latter was called the foundation herd.

Researchers tried to come up with a formula that was as simple as comparing crop productivity, which concludes that farms with consistently higher yields tend to be more profitable over time.  The livestock comparison formula can be used to compare productivity across species, Zulauf said.

By his measure, hogs had a productivity increase over the last quarter century of 68% versus the next highest increases of 44% and 43% for dairy and broilers, respectively.  Productivity gains for beef, eggs, and sheep lagged, he said.

Any ratio measure calls attention to its components, in this case, the important role foundation herds play in livestock productivity, he said.  A smaller foundation herd is a key contributor to the large increase in hog productivity and in particular its advantage over broiler and dairy productivity gains.

That implies that more attention should be paid to the role of the foundation herd in livestock productivity at all levels, from individual operations to the sector.




At its simplest, productivity increases when more output is produced with the same foundation herd or when the same output is produced with a smaller foundation herd, Zulauf said.

Dairy illustrates the former, in that more production is coming from a foundation herd that has changed little over the years, while beef illustrates the latter, as about the same production is coming from a smaller herd.

And, while production increased more for broilers than hogs (63% versus 43%), productivity increased more for hogs as its foundation herd declined 15% versus a 15% increase for broilers.

A key difference across beef, hogs and sheep is the change in offspring per female, he said.  Saved pigs per litter rose 30%, from 8.25 in the March 1993 USDA Hogs and Pigs report to 10.70 in the March 2019 report.

Using numbers from the Cattle Inventory report, the ratio of the calf crop during the prior calendar year to cows and heifers that had calved as of Jan. 1 was 0.89 in 1993 versus 0.90 in 2019, a 1% gain.

The USDA reported lambs per 100 ewes in 1993 as 102 versus 107 in 2019, a 5% gain, he said.




Zulauf warned that caution was needed when comparing changes in the livestock productivity measure with changes in crop yields, impart because livestock production is a flow process while crop production is more akin to a batch process.

However, hog production increases still come out on top.




Cash cattle trading was reported last week in the Plains at $114 to $116 per cwt, mostly $115, on a live basis, down $1 to $4 from the previous week.  Dressed-basis trading was seen at $185 to $186 per cwt, down $4 to $5.

The USDA choice cutout Wednesday was up $0.24 per cwt at $223.53, while select was down $0.46 at $209.99.  The choice/select spread widened to $13.54 from $12.84 with 116 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Tuesday was $136.65 per cwt, up $0.10 from the previous day.  This compares with Wednesday’s Aug contract settlement of $142.72, up $0.50.