Hogs Cost and Return Data Released

October 10, 2005 — 

The USDA's Economic Research Service (ERS) released its Commodity Cost and Return statistics for 2004 on October 3, 2005. The ERS has estimated annual production costs and returns and published accounts for major field crop and livestock enterprises since 1975. These cost and return accounts are historical accounts based on the actual costs incurred by producers during each year.

According to the most recent report comparing costs and returns in the swine industry for 2003 and 2004, on average across the US, the gross value of production per hundredweight gain increased $15.25 to $67.99. The report divides the country into 7 regions and reports findings on a regional basis as well (a makeup of the individual regions can be seen at http://www.ers.usda.gov/Emphases/Harmony/issues/resourceregions/resourceregions.htm#new). The highest gross value of production for 2004 was in the Southern Seaboard region at $81.75 cwt gain, with the lowest being $57.51 in the Northern Crescent region.

Operating costs, on average, across the US rose from $41.55 in 2003 to $49.03 in 2004 resulting in a return over operating cost of $18.96 cwt gain in 2004. The highest return was in the Southern Seaboard region at $28.52 cwt gain with all regions posting positive returns relative to operating costs. However, if additional overhead costs (such as hired labor, opportunity costs of land and labor, taxes, insurance, etc.) are factored in, only the Southern Seaboard region experienced a positive return. With all factors taken into account, average total costs per hundredweight ranged from $65.57 in the Northern Crescent region to $106.78 in the Mississippi Portal region.

The report also indicates that 44% of the hogs in the US were produced under contract in 2004. The average herd size of market hogs and feeder pigs rose in 2004 to 2377 and 1739 respectively.

Source: ERS http://www.ers.usda.gov/Data/costsandreturns/testpick.htm