Finley, Robert M.

Retzlaff, Robert Elmer James.

University of Missouri: MOspace

Entry and Exit in Missouri's Swine Industry By Medium to Large Producers 1964-1968 Robert E. J. Retzlaff Robert M. Finley SR 151 University of Missouri-Columbia Agricultural Experiment Station 2/73/2M Entry and Exit in Missouri's Swine Industry By Medium to Large Producers 1964-1968 Robert E. J. Retzlaff and Robert M. Finley* For many years ~issouri has ranked among the top states in production and mar-keting of hogs. Hogs are produced in every Missouri county, on 40 percent of the state's farms, and contribute over 20 percent of the cash farm income. With the prices experienced in recent years, information regarding the trend to larger numbers of hogs fed per farm, entry of new producers, and exit of existing firms is useful. Figure 1 shows the number of hogs on farms by county for the year 1970. The northern one-half of the state is the prime production area of market hogs. Objectives The objectives of this study are to analyze: 1. Changes in the number of producers and the number of hogs fed from 1964 to 1968. 2. Geographic distribution of Missouri's swine industry. 3. Distribution of producers by size group and district. 4. Increases and decreases in the number of hogs fed by producers and the entry and exit of producers in 1964 versus 1968. Definition of Terms District refers to one of the nine crop and livestOck reporting areas of Missouri. These districts are identified as Northwest, North Central, Northeast, West Central, Central, East Central, Southeast, South Central, and Southwest. Producer was any farmer that fed 300 or more hogs. Those producers who fed less than 300 hogs were excluded from the analysis. Size Group was the division of producers based on the number of hogs fed per year into one of the following categories: 300-399, 400-599, 600-799, 800-999, 1,090-1,500, and greater than 1,500. These categories will be referred to as A, B, C, D, E, and F respectively. * Assistant Professor, Central Missouri State College and formerly Graduate Assistant, Department of Ag. ricultural Economics, University of Missouri·Columbia; and Professor, Department of Agriculrural Economics, University of Missouri·Columbia, respectively. We appreciate a careful review and suggestions on an earlier draft by Glenn Grimes, Extension Livestock Marketing Specialist, University of Missouri·Columbia. Increase refers to those producers that increased the number of hogs fed within their size group and those that increased the number fed into any larger size group. Decrease refers to those producers that reduced the number of hogs fed within their size group and those that decreased the number fed into any lower size group. Entry was any producer who reached at least the 300 hogs fed requirement per year. Exit was a producer reducing the number of hogs fed below the minimum of 300 hogs per year. MISSOURI Fig-ul'c Sou!'t.:e: Ml::isoul'J "'arJll li'octs --1 971 , MissourI Department ur Agl'it:ulture, April , 1971, Pngc 25. Changes in Producers and in Hogs Fed ~ 69 , HOO and OVCI' 00 40,nOO--fi9,9DfI [ill 20,000- - 39,999 o Lesl:' lhun 2Cl,nOO Table 1 shows the number of producers and the number of hogs fed in Missouri by size groups from 1964 to 1968. 1 The total of all producers for the six size groups in 1964 included 2,309 producers of separate hog operations. In 1968 there were 3,525 hog producers feeding 300 or more hogs per year; hence for the 5 year period, the net entry was 1,216 producers. Likewise, the number of hogs fed by these producers in-creased from 1,049,670 head in 1964 to 1,704,490 head in 1968-a net increase of 654,820 hogs. 1 A caveat should be indicated regarding the data. Although it was attempted to gather data for the entire population of producers producing 300 or more hogs each year, from a practical standpoint we might assume that some producers were not included in a particular year. Hence if and when these producers were discovered (in a subsequent year), the data would be indicated as a net entry, thus inflating the entry figures. It is thought that data for the lower size group might be more suspect than those in the larger size group. 2 v.> Table 1 NUMBER OF PRODUCERS AND NUMBER OF HOGS FED IN MISSOURI BY SIZE GROUP 1964-1968* -~--.-- -------- -- - -- - - - - _ .. _-- --- ---- --- -- ------300-399 400-599 600-799 800-999 1000-1500 Greater than 1500 Total A B C D E F No. No . No. No . No. No. No. No . No . No. No. No. No. No. of hogs of hogs of hogs of hogs of hogs of hogs of hogs Year prod. fed . prod. fed prod. fed prod . fed prod. fed prod . fed prod. fed 1964 1,335 410,655 602 263 , 625 190 118,540 60 49,550 88 98,600 34 108,700 2,309 1,049,670 1965 1 , 388 427, 050 713 314,725 210 131,290 86 70,650 116 131,650 52 156,700 2 , 565 1,232 , 065 1966 1,532 471,635 778 343,715 210 131,990 93 76,850 143 161,850 47 138,550 2,803 1,324,590 1967 1,772 544 , 985 924 409,445 256 161,290 127 104,750 170 193,550 51 141,800 3,300 1,555,820 1968 1,753 538,555 1,069 474,845 293 183,890 148 122,150 210 139 , 650 52 145,400 3,525 1,704,490 Net Change 418 120,900 467 211,220 103 65,350 88 76,600 122 141,050 18 36,700 1,216 654,820 --~----*Producers with less than 300 hogs fed are not included in this table . Data for 1967 in Chariton County were missing . Data for 1968 in Perry County were missing. No data were generated by the missing data statistical techniques. Source: Unpublished data collected for and by Glenn Grimes and others, Department of Agricultural EconomiCS, University of Missouri-Columbia . The number of producers in size groups A and B increased from 1,937 in 1964 to 2,822 in 1968, and the number of hogs fed increased from 674,280 to 1,013,400 in the same period. The net increases for size groups A and B were 885 new producers and 339, 120 extra hogs fed comparing 1964 to 1968. Size group Chad 103 new producers which fed 65,350 additional hogs when contrasting 1964 data to 1968. Combining groups D , E, and F for the period considered, the number of producers increased by 254,350. These data illustrate considerable activity in terms of the number of producers and the number of hogs fed in the 5 years under analysis. Geographic Distribution The principal hog feeding areas of Missouri are the Northwest, North Central, and the Northeast districts. Figure 2 shows the geographic location of Missouri's swine industry presenting the percentage of the total for the number of producers and the number of hogs fed2 by district. In 1968 the Northwest district had 25.4 percent of all the producers and 25.9 percent of the hogs fed. The second area of concentra-tion was the Northeast district with 19 percent of the state's producers feeding 18.1 percent of the total number of hogs fed in 1968. The North Central and Central dis-tricts each had about 15 percent of the producers and 15 percent of the hogs fed in 1968. West ccntl,_:tl __ f--_ Southwes~l_-I~ __ l Nurth Cenl.t'al • Percent of the numbel' of pl'oducCI'S 1_"-t __ N""o,,-l'.thcast 0 Pcrcent of the number r;--r""'-1.""",l..""",.\ of hogs fed MISSOURI --r--'-__ IEast Central ..... ..,;"...,,-r-~ li"igul'c 2. Location of the Hog Industry by Districts In Missouri, 1968 "Includes onlj those hogs fed by farmers producing 300 or more hogs annually. 4 Table 2 sets forth the number of producers and the number of hogs fed in the nine districts from 1964 to 1968. Of the state's 3,525 producers in 1968, 2,115 or 60 percent were located in the districts of the Northwest, North Central and Northeast. These 2,115 producers fed 987,670 head or 57.9 percent of the 1,074,490 hogs. Con-trasting this to 1964 data, of the state's 2,309 producers, 1,330 or 57.6 percent were in the Northwest while North Central and Northeast districts fed 58.3 percent (612,445 hogs) of the state's total number of hogs fed . In 1968, the number of producers and number of hogs fed in the Northwest, North Central and Northeast districts were : 894 producers and 441,135 hogs, 533 pro-ducers and 237,235 hogs, and 668 producers and 309,300 hogs, respectively. The Cen-tral district had 532 producers and these producers fed 267,370 hogs. The East Cen-tral had 366 producers and fed 178,785 hogs, while the West Central district had 306 producers who fed 161,405 hogs. Combining the Southwest, South Central and South-east districts we find that this region had a total of producers or 7.5 percent of the state's total. These 226 producers fed 109,260 hogs or 6.4 percent of the total of the hogs fed. Distribution by Size Group Northern Districts. Table 3 presents the number of producers and number of hogs fed by size groups and by districts in Missouri. 'The Northwest district had 464 of the state's total of 1,753 producers in size group A. The Northwest, North Central and Northeast districts had 1,094 producers out of a total 1,753 producers in size group A. These same three districts had 623 producers of the state's 1,069 producers in size group B. For size groups C and D, the northern three districts had 171 and 70 of the state's total producers of 293 and 148 respectively. The Northwest, North Central and Northeast district had 127 producers of the state's 262 producers in size groups E and F. Central Districts. In the greater than 1,500 size group (F), the Central district had 12 producers feeding 31,500 hogs in 1968. This was the largest of the nine districts in terms of the number of producers in size group F and second largest with regard to the number of hogs fed. For size group A, the West Central, Central and East Cen-tral had 126, 245 and 171 producers respectively. For the size groups B, C, D and E the West Central, Central and East Central had the following number of producers respectively: 98, 173, and 115; 30,48, and 28 ; 24, 25, and 20; and 22, 29, and 26. Southern Districts. There was only one producer in the Southern three districts that fed more than 1,500 hogs. For size group A in 1968 the Southwest, South Central and Southeast had 65, 33, and 19 producers feeding a total of 19,600, 10,000, and 6,050 hogs. Number of Hogs Fed by Producers and Entry and Exit For the period studied, four different events could occur with respect to the swine operation. A producer could increase within his size group or move to a larger size group (both cases are increases) . A second event that could have taken place is a pro-ducer feeding less than 300 hogs increases the number fed and enters anyone of the six size groups. Thirdly, a producer could have decreased within or to a smaller size group (both cases are classified as decreases). A fourth event could be a producer re-ducing the number fed and feeding less than the required 300 hogs. This was counted 5 0-1964 No. of No. Hogs Prod. Fed Northwest 574 269 , 750 North Central 405 175,220 North East 351 167,475 West Central 198 92,960 Central 359 154 , 635 East Central 261 120,010 Southwest 63 25,580 South Central 50 22,270 Southeast 48 21,770 Total for State 2 , 309 1,049,670 Table 2 NUMBER OF PRODUCERS AND NUMBER OF HOGS FED IN THE NINE DISTRICTS OF MISSOURI , 1964-1968* 1965 1966 1967 No. of No. Hogs No . of No. Hogs No. of No. Hogs Prod. Fed Prod. Fed Prod. Fed 676 337,905 723 337 , 905 828 398,190 435 195,970 439 198,750 515 227 ,290 3fi2 172,625 452 207,525 541 250,000 227 109,805 255 125,630 29 7 146,080 427 193,585 424 193,285 510 243 , 040 281 144,625 334 170 , 635 427 208,160 66 29,000 69 29 , 350 70 26,550 52 26 , 020 59 37,720 68 33 , 720 49 22,540 48 23 , 790 44 22 ,790 2,565 1,232 , 065 2,803 1,324,590 3,300 1,555 , 820 "Producers with less than 300 hogs are not included in this table . 1968 Net Change No . of No. Hogs No . of No. Hogs Prod. Fed Prod. Fed 894 441 ,135 320 171,385 533 237,235 128 62,015 668 309,300 317 141,825 306 161,405 108 68,445 532 267,370 173 112,735 366 178,785 105 58 , 775 102 42,100 39 16 , 520 75 41,370 25 19,100 49 25, 790 1 4,020 3,525 1,704,490 1,216 654,820 -J 300-399 A No. of No. hogs District prod fed North West 464 144,190 North Central 303 92,885 North East 327 100,225 West Central 126 38 ,705 Central 245 74,600 East Central 171 52,300 South West 65 19,600 South Central 33 10,000 South East 19 6,050 Total for State 1,753 538,555 Table 3 NUMBER OF PRODUCERS AND NUMBER OF HOGS FED BY SIZE GROUPS AND DISTRICTS-MISSOURI, 1968* 400-599 600-799 800-999 1000-1500 B C D E No. of No. hogs No . of No. hogs iNo. of No. hogs No. of No. hogs prod fed prod fed prod fed prod fed 245 109,105 80 50,940 30 24.,800 64 73,500 151 67,050 44 27,300 14 11,500 14 17,200 227 100,375 47 29,350 26 21,550 32 36,200 98 43,700 30 18,550 24 19,800 22 24 , 450 173 76 ,870 48 30,700 25 20,200 29 33,500 115 50,335 28 17,300 20 16,650 26 29,000 24 10,850 5 3,000 1 950 7 7,700 21 9,420 4 2,450 5 4,100 11 12,400 15 7,140 7 4,300 3 2,600 5 5,700 1,069 474,845 293 183,890 148 122,150 210 239,650 *Producers with less than 300 hogs are not included in this table -----More Than Total 1500 F No. of No. hogs No. of No. hogs prod fed prod fed 11 38 ,600 894 441,135 7 21,300 533 237,235 9 21,600 668 309,300 6 16,200 306 161,405 12 31,500 532 267,370 6 13,200 366 178,785 0 0 102 42,100 1 3,000 75 41 , 370 0 0 49 25,790 52 145,400 3,525 1,704,490 Data for 1968 in Perry County in East Central District were missing--no data were generated by the missing data statistical technique. as an exit. Table 4 presents the data for the number of producers that increased and decreased with regard to the number of hogs fed and the number of producers that entered or exited by size group and district comparing 1964 to 1968. Table 4, using the Northwest district and size groups A and B as an example, is read as follows: a. Column one, the 53 represents only those producers that have increased within the 300-399 size group. New entries in this size group(s) are excluded by defi-nition even though new entries are increases in the number of hogs fed from less than 299 to 300 and more. b. In column twO, the 231 represents the number of new hog producers that en-tered size group A. These producers entered (entry) the analysis by feeding at least 300-399 hogs per year. c. In column three, the 3 represents the number of producers that decreased the number of hogs fed within group A or decreased from a larger size group such as C to size group A. d. In column four, the 95 r.epresents the number of producers that exited the hog industry by feeding less than 300 hogs per year. e. In column one of size group B, the' 24 represents increases within size group B or producers who moved from size group A to size group B in the period involved. The number 18, in column four represents those producers that were in size group B in 1964 and then fed less than the 300 minimum in 1968 and exited the industry. The number 145 in the entry column for size group B represents entry from below 300 hogs fed per year to size group B. The differences between columns two and four for each size group in Table 4 indicate the net entry in the number of producers for the period. For example, the total entries for the state were 1,838, minus 622 exits gives a net entry of 1,216 pro-ducers. For the size groups A, B, D, E, and F, the entries of producers from 1964 to 1968 were 524,462,99, 59, 67 and 9 respectively. Of the 1,216 new producers in the state, 986 occurred in size groups A and B. Increases and decreases may also be analyzed from Table 4. Almost half of the adjustments for all districts occurred in size group A, with 156 producers increasing and 10 producers decreasing. For the nine districts, the increases and decreases in the number of producers affecting size group A were as follows: Northwest-53 and 3; Northeast-17 and 0; East Central-30 and 1; North Central-13 and 5; Central-22 and 1; West Central-10 and 0; Southwest-4 and 0; South Central-4 and 0; and Southeast-3 and O. Size group B had 86 increases and 35 decreases with the majority of the adjust-ments occurring in the northern and central districts. This size group was the second most important group from the standpoint of adjustments. Size group Chad 39 in-creases and 18 decreases for the 5-year period. For size groups D, E, and F increases and decreases were 12 and 15; 11 and 14; and 6 and 9 respectively. The majority of the adjustment occurred in the northern three districts. The total increases and decreases for selected districts for all size groups show the Northwest with 90 increases and 24 decreases; the Northeast with 36 increases and 17 decreases; and the Central with 44 increases and 14 decreases. 8 District Inc* North West 53 '0 North Central 13 North East 17 West Central 10 Central 92 East Central 30 South West 4 South Central 4 South East 3 Total for Size Groups 156 Table 4 PRODUCERS THAT INCREASED AND DECREASED THE NUMBER OF HOGS FED , AND THE NUMBER OF PRODUCERS ENTERING AND EXITING BY SIZE GROUP AND DISTRICT IN MISSOURI 1964vs . 1968 Size Group A Size Group B 300 -399 400 -599 Entry Dec** Exit Inc Entry Dec Exit 231 3 95 24 145 8 18 127 5 74 12 71 6 15 215 0 54 8 137 7 21 67 0 21 16 48 1 13 102 1 57 12 100 6 22 120 1 71 9 71 6 35 42 0 16 1 13 0 5 20 0 9 3 10 1 7 6 0 9 1 10 0 7 930 10 406 86 605 35 143 Size Group C 600-799 Inc Entry Dec Exit 9 35 6 8 5 18 1 5 6 25 4 8 5 14 1 3 5 27 2 6 7 16 4 9 0 4 0 2 1 3 0 0 1 1 0 3 39 143 18 44 ...... o Table 4 (continued) District North West North Central North East West Central Central East Central South Wes t South Central South East Total for Size Group for State *Increased **Decreased Inc* 3 3 1 2 1 0 1 1 0 12 Size Group E 1000 -1500 Entry Dec** Exit Inc 21 3 2 0 1 2 2 1 12 1 0 0 8 0 0 2 13 5 3 3 9 3 2 1 4 0 0 0 7 0 1 0 3 1 1 0 78 15 11 7 Size Group F Total for District More Than 1500 Entry Dec Exit Inc Entry Dec Exit 4 2 3 90 450 24 130 0 1 0 38 224 18 96 1 2 2 36 404 17 87 2 1. 0 35 147 3 39 4 0 1 44 262 14 89 2 0 2 51 224 15 119 0 0 1 7 63 0 24 1 0 0 9 42 1 17 0 0 0 0 22 1 21 14 6 9 315 1 , 838 93 622 Summary The principal producing area measured by the number of producers was the North-west district. The next three districts ranked by the number of producers were the North Central, Northeast, and Central. The Northwest district was first in total hogs fed followed by the North Central district. For the state, the total number of producers and the total number of hogs fed in 1964 and 1968 were 2,309 and 1,049,670; and 3,525 and 1,704,490 respectively. For the 5 years, there was a net increase of 1,216 producers and a net increase of 654,820 hogs fed. These changes represent almost a 55 percent increase in the number of producers and 62 percent increase in the number of hogs fed. Changes in both the number of producers and the number of hogs were mea-sured : (1) by entries and exits; (2) by increases or decreases between size groups; and (3) by increases or decreases within a size group. The analysis revealed most of the activity occurred in the 300-399 size group and in three Northern districts of Missouri. Table 5 gives a summary of the net entry of 'the number of producers entering the industry in 1964 as compared with 1968 by size group and the net entry of producers by district. The three Northern districts had the majoriry of the new producers and if analyzed by size groups, A and B size groups had the most net entries with 524 and 462 producers. Size Group 300 - 399 400-499 500-699 700-999 lllOO-1 500 1500 and up Table 5 NET INCREASES IN NEW PRODUCERS BY SIZE GROUP AND DISTRICT, MISSOURI 1964-1968 Entry District 524 Northwest 462 North Central 99 Northeast 59 West Central 67 Central 5 East Central 1,216 Southwest South Central Southeast State Total 11 Entry 320 128 317 108 173 105 39 25 1 1,216 

Entry and exit in Missouri's swine industry by medium to large producers, 1964-1968

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