At $4.3 billion, the Iowa pork industry comprised 54% of the total cash receipts for livestock and related products in the state, according to statistics for 2005 compiled by the Iowa Farm Bureau Federation.

In the early 1900s, there were about 200,000 farms in Iowa that raised hogs in one fashion or another. Currently, that number is estimated to have dropped to around 9,600 hog farms.

Iowa's pig crop increased to 16.6 million head in 2006, up from 16.1 million head in 2005, and up from 15.3 million head in 2004. Iowa has ranked second to North Carolina in pig crop production since 1997.

Iowa producers retained their long-time number one ranking for hogs marketed in 2006, with 24.7% of all U.S. hogs marketed.

Hog prices in Iowa fell in 2006, with an average price recorded of $48.06/cwt.

Iowa's pork industry has been buffeted by the downturn of farming in the 1980s, and its sow herd has taken a big hit, punctuated by the record-low prices of the late '90s and emerging swine diseases such as porcine reproductive and respiratory syndrome (PRRS).

But it remains resilient and vibrant, fueled by a new generation of farmers vying to enter the business, says Rich Degner, executive director of the Iowa Pork Producers Association.

Hog operations have shrunk from 18,000 a few decades ago to about 9,600. The sow herd has declined from 1.4 million to just over 1 million head.

Degner reinforces obvious concerns about corn availability and price and the impact on profitability.

“Iowa pork producers with whom I interact are confident that the corn yields are going to be increasing and we are going to be able to feed the herd, and they are pretty optimistic that there is going to be profitability on the farm,” he remarks.

John Lawrence, Extension livestock economist at Iowa State University (ISU), adds that the sow herd in Iowa has stabilized. The next test will be the impact of grain prices on sow numbers.

“If we see sow farm numbers decline, I think it will come from those farms that are diversified, that see enough income coming from the crops that they have decided to get out of the hogs,” he says.

Lawrence says ISU has reworked its Estimated Returns to Livestock series, basing it on a 1,200-sow, farrow-to-finish model. That system reflects higher capital costs, but much lower production costs due to improved efficiencies, compared to the previous 160-sow, farrow-to-finish model.

“Obviously, as you increase the grain costs, producers will have higher costs in 2007 than they had in 2006,” he says. “But if you add a dollar to the cost of a bushel of corn and hold other costs constant, the increase in cost of production will come to $4-4.50/cwt.”

Lawrence says his reworked calculations now indicate that pork production will be profitable for most of 2007, making it the fourth-consecutive year of “black ink.”

He attributes that to a cost of production in the low $40s, and stronger hog prices than expected ($50/cwt.). He forecasts a $50/cwt. average in '07.

Feed Prices Spike Concern

Howard Hill, DVM, is the chief operating officer at Iowa Select Farms, a 150,000-sow, farrow-to-finish operation based in Iowa Falls that involves various contract systems to finish their pigs throughout the state.

As such, rising feed prices have already had a major impact on cost of production in Iowa's largest hog operation, he says, pushing up the cost of production by close to $15/hog.

“We try to protect ourselves through forward contracting of both corn and soybean meal commodities, and we have pretty well protected ourselves from even higher prices, but not from the supply issue,” Hill says.

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