IATP Hog Report - Institute for Agriculture and Trade Policy

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Section 1 Figure 2. Number of U.S. Farms With Hogs 1983-1999. (Source: U.S. Department of Agriculture, National Agricultural Statistics Service (NASS)). http://www.iatp.org/hogreport/sec1.html (4 of 23)2/27/2006 3:50:02 AM The Price Crisis and Its Economic Impacts The demand for farm products that faces farmers at the farm gate is not direct consumer demand but processor demand. As such, it is highly influenced by conditions in the processing industries. 17 In the case of pork, consumer demand is derived through the packing industry's demand for hogs. In 1996, there was excess capacity in the slaughter-processing, or packing, industry. Packers were bidding against each other for hogs and prices to farmers were high. Packers closed buying stations and, in some cases, bought rival plants and then closed them, reducing excess capacity
Section 1 and consolidating their own control over the markets, but limiting and, in some cases, eliminating marketing options for farmers who depended on those plants to buy their hogs. 18 http://www.iatp.org/hogreport/sec1.html (5 of 23)2/27/2006 3:50:02 AM Despite the dramatic reduction in number of hog farms between 1988 and 1998, the 1998 annual pig crop was 105,004,000, a record high. 19 Beginning in late summer 1998, prices paid to farmers started to fall. By the end of the year, farmers were in crisis. 20 Packers, whose excess capacity just two years before had resulted in plant closures, now could not handle the record supply of hogs. At the same time, other countries were producing surpluses of their own. The dollar was strong, limiting other countries' interest in purchasing U.S. pork. Supplies were not easily adjustable downward. Imported live hogs from Canada were competing with U.S. hogs at the packing facilities and the anticipated Asian export markets that had helped fuel the expansion did not materialize. Nevertheless, pork exports were up 18% from 1997. There were just too many hogs being produced. Meanwhile, domestic demand for pork, which had been relatively stable with consumption ranging between 48 and 53 pounds retail weight per capita since 1982, did not appreciably increase. 21 As a few firms become large enough, they account for substantially more of the market and it took fewer large producers expanding supply to reduce prices. 22 The typically inelastic consumer demand for pork means there are only three ways to increase sales of pork: population growth, government purchases, and export. Without these options, increased supplies lower price and cause some farms to fail. Increased specialization of production decreases elasticity of supply over time. 23,24 Specialization and capitalization tend to decrease firms' flexibility of entry and exit. The result has been fewer firms reducing production when prices fall, keeping supplies high. The record high hog supplies of 1998 had hit a wall. Retailers did not lower prices to consumers; meatpackers and processors reduced their prices to farmers; specialized and highly capitalized hog factories could not easily reduce supply. 25 The results were high marketing margins and record profits for the packing industry. While independent farmers were receiving the lowest prices since the Great Depression, Smithfield Foods, IBP, and Hormel Foods (first, second, and fifth largest hog packers, respectively) announced record profits. 26,27 , 28 In the general commodity market, there is little opportunity for individual farmers to add value to their products and get a higher price for doing so. The price that farmers receive for their hogs is the base, minimum price that can be received for a raw product. Although credits may be given for
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Page 3 and 4: Table of Contents Marlene Halverson
Page 5 and 6: Section 0 The choice as to whether
Page 7 and 8: Section 0 massive quantities of gro
Page 9 and 10: Section 0 quantities far exceeding
Page 11 and 12: Section 0 hog factories avoid the e
Page 13 and 14: Section 0 Alternatively, we can try
Page 15 and 16: Section 1 I. Are Independent Farmer
Page 17: Section 1 programs were put in plac
Page 21 and 22: Section 1 Farm Credit [Service] is
Page 23 and 24: Section 1 results despite a $58.6 m
Page 25 and 26: Section 1 sell on the spot or cash
Page 27 and 28: Section 1 costs to ignoring the fac
Page 29 and 30: Section 1 Rationale: Independent ho
Page 31 and 32: Section 1 animals and definition of
Page 33 and 34: Section 1 Agriculture. 16 U.S. Depa
Page 35 and 36: Section 1 46-47 Ostmeyer, A. (1999,
Page 37 and 38: Section 1 77 Thornsbury, S., Kambha
Page 39 and 40: Section 2 Safety Some Strategies an
Page 41 and 42: Section 2 oxygen for complete fuel
Page 43 and 44: Section 2 cure bacterial diseases b
Page 45 and 46: Section 2 reach humans, including:
Page 47 and 48: Section 2 microorganisms in the env
Page 49 and 50: Section 2 bacteria, but it saw no r
Page 51 and 52: Section 2 use of penicillin and tet
Page 53 and 54: Section 2 few problems adjusting. M
Page 55 and 56: Section 2 The Swedish thus regard i
Page 57 and 58: Section 2 marketed, discounted to t
Page 59 and 60: Section 2 destroyed, leaving behind
Page 61 and 62: Section 2 and practices that make a
Page 63 and 64: Section 2 of Minnesota, Biosystems
Page 65 and 66: Section 2 41 Backström, L. (1999,
Page 67 and 68: Section 2 Washington, DC: National
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Section 2 96-98 National Research C
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Section 2 SOU 1997:132 Del 2 (pdf-f
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Section 2 147 Ault, D. (1994). A ge
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Section 2 169 Ibid. 170 Ibid. http:
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Section 3 Receiving minimal day-to-
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Section 3 Hog Factory Impacts on Gr
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Section 3 In 1998, the U.S. Geologi
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Section 3 and creating setback dist
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Section 3 of nutrients in the Bay c
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Section 3 that lagoons begin to lea
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Section 3 native organic matter poo
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Section 3 Help preserve local contr
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Section 3 25 Ritter, W.F. & Chirnsi
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Section 3 American Prospect online,
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Section 3 68 Understanding the Poll
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Section 4 IV. Part of the Pig Reall
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Section 4 centuries. In 1713, an It
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Section 4 and 44 control participan
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Section 4 out carbon dioxide. Plant
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Section 4 additional systems in the
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Section 4 pollution-reducing option
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Section 4 18 Robbin Marks, Natural
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Section 4 59-61 Bird, E. and Strang
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Section 5 made up of the trust and
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Section 5 designation" for their pr
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Section 5 Pollution Shopping by Cor
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Section 5 environmental laws, and a
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Section 5 alternatives to the propo
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Section 5 Corporate farm operations
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Section 5 The EPA further concluded
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Section 5 ❍ an investigation of t
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Section 5 decision by Judge Kornman
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Section 5 and other training for it
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Section 5 grounds that it was a pub
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Section 5 · Operating a facility h
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Section 5 portions of an industrial
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Section 5 practices that favor the
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Section 5 investors in animal facto
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Section 5 Health Department. Herald
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Section 5 55 RESPEC. (1998, August)
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Section 5 to Eric Nixon, regarding
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Section 5 126 Ozark Sierra Club. (2
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Section 6 | Next Section | | Table
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Section 6 about the effects of inte
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Section 6 Today, there is a special
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Section 6 persist in milk and some
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Section 6 In some of the largest ho
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Section 6 Population density inside
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Section 6 widespread abuses of anim
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Section 6 Weaning pigs when they ar
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Section 6 Ironically, the creation
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Section 6 compatible alternatives t
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Section 6 Office. 13 Dawkins, M.S.
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Section 6 37 Broom, D.M., Dantzer,
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Section 6 IPVS Special Report. B Ph
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Section 6 Obstacles and opportuniti
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Section 6 http://www.iatp.org/hogre
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Section 7 The Campaign for Family F
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Section 7 struggle to compete with
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Section 7 The South Carolina Coasta
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Section 7 groups can litigate again
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Section 7 Clean Water Fund has been
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Section 7 sustainable production me
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Section 8 VIII. Funder to Funder Su
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Section 8 report presents strong ev
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Section 9 no unwarrantably limit th
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Contacts Contacts Alabama Arkansas
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Contacts Georgia Daphne Walker Ohoo
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Contacts Teresa Opheim Iowa Environ
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Contacts Dave Dempsey Michigan Envi
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Contacts Montana Jim Jensen Montana
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Contacts Mark Trechock Dakota Resou
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Contacts Bill Berry Concerned Citiz
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Contacts John H. Davidson Midwest A
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Contacts Larry Barker Buckingham Ci
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Contacts Dan Heilig Wyoming Outdoor
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Contacts Rob Perks/Todd Robins Publ
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Funders Mary Stake Hawker, Director
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Funders Vic DeLuca Jessie Smith Noy
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Photo Galleries People Back to Main
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disease Photo Gallery: Disease Back
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Flooding Photo Gallery: Flooding Ba
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Cartoons Cartoons Back to Main Page
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cartoon1 Previous / Next Index Page
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cartoon9 Previous Index Page http:/
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