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About Lean Hogs (LH)
Lean Hogs are hogs of the proper weight to be brought to market.
After the hog is slaughtered, roughly twenty percent of the meat
goes towards ham and approximately seventeen percent of carcass
weight ends up as pork loins. The belly of the hog, which is cured
and sliced to produce bacon, accounts for another fifteen percent
of the carcass weight. The meat industry accounts for roughly
twenty percent of the moneys spent on food and beverages in the
United States.
Hog farming is mainly concentrated in the Corn Belt region of
the United States: Iowa, Illinois, Indiana, and Missouri account
for more than half of our country’s total pork production.
The geographical location of pork production is centered close
to the main source of hog feed: corn. The price of feed greatly
affects the supply of pork products. The trend in the pork industry
has been towards large scale hog farming As a result, hog farmers
are more apt to plan their production and marketing schedule of
hogs more actively in recent years than in the past. As feed prices
rise, more lighter weight hogs are brought to market. This has
a tendency to depress prices in the short-term, but the decreased
number of hogs on feed will lower available supply for next five
to seven months (the typical amount of time it takes a pork producer
to bring a pig up to marketing weight ).
Weather, to a lesser degree in recent years, also plays a role
in pork production. When the weather turns very hot, the hogs
turn inactive and have a tendency not to be in prime breeding
condition. A normal gestation period of four months leads to the
seasonally low number of farrowings (pig births) in December,
January, and February. Cold weather and an ample supply of freshly
harvested corn create excellent breeding conditions from November
through January. As a result of good breeding conditions, the
largest number of pig farrowings is between March and May.
Pork producers, like most producers of a product, tend to increase
production when profit margins are high and cut back on production
when profit margins are low. An excellent guide to hog farmers
is the Hog/Corn ratio. The more corn costs as a percentage of
hog prices (low Hog/Corn ratios), most likely the lower the hog
farmers profits. Low corn costs as a percent of hog prices (high
Hog/Corn ratios) are usually indicative of wide profit margins.
When profit margins are low, hog farmers cut back on the number
of hogs on feed, and when profit margins are high, they increase
the number of hogs they feed. Gestation periods and fattening
periods combined usually run 18 months. During these year and
half periods, major changes in profit margins can have dramatic
effects on supply.
World wide pork consumption has increased dramatically in recent
years. This increase in the appetite for pork is a direct result
of the pork producers switching from a "fat-type" hog
to a "leaner-type" hog. The decline in the use of lard,
as well as an increase health consciousness have lead pork producers
to feed hogs to produce leaner, meat quality hogs. The pork industry
has also used advertising slogans, such as "the other white
meat", to increase the public’s perception of pork as
a beef and poultry alternative. Changing public attitudes and
tastes are the major factors affecting the demand for pork. The
relative pricing of pork in relation to beef and poultry are also
major factors in the demand for pork.
Bacon, or processed and sliced pork bellies, is the only member
of the meat industry that has few competing products. The increasing
health consciousness of the domestic population which has increased
demand for pork, is also weighing on the bacon market. As a result
of changing public tastes and attitudes, the demand for bacon
is decreasing very slowly.
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