National Hog Farmer teamed up with the National Pork Board, economists at Iowa State University and the University of Minnesota, and Pfizer Animal Health to update employment information in the production segment of the pork industry.
This fourth survey in a 15-year span, funded by Pork Checkoff, USDA's Economic Research Service, Iowa State University and Pfizer Animal Health, captures unprecedented employment data on U.S. pork producers and the employees working in their production systems.
The goal of the 2005 survey, conducted in late 2004, was to supplement our growing knowledge about the workforce in the U.S. pork production industry. The new results are compared to the benchmark surveys conducted in 1990, 1995 and 2000.
The 2005 results provide an opportunity to identify significant trends and help employers and employees understand their competitive standing in the U.S. pork industry's jobs corps. Although employer and employee responses in previous surveys generally coincided, the new survey again found a few discrepancies.
Key information gleaned from the survey responses includes average salaries (reported by region and job title), employee benefits, levels of education and experience, employee management and job satisfaction trends. Additionally, the survey tracks ages, types of operations and production levels of owners/employers, as well as the operations employees represent.
Using the three previous benchmark surveys as a basis, separate, four-page questionnaires were developed and sent to pork producers and employees across the United States. Select questions in both surveys overlapped so that responses could be compared in key areas.
The National Hog Farmer qualified mailing list provided a select sample of producers/owners. A random sample of producers with an annual production of 3,000 head or more, or verified with 100 sows or more, were surveyed. This sample was used because researchers felt this group was most likely to have one or more employees. All employees on the National Hog Farmer list were sent the survey.
Responses were tabulated to identify averages and differences, nationally and by regions. The states within each region are footnoted in Table 1. Not everyone answered every question, so the number of respondents may vary slightly with each question.
As Table 1 shows, survey response by producers and employees was again highest in the Midwest in 2005. Response levels from each region were comparable to past surveys.
The percentage of employee respondents was greater in the Midwest and Northeast regions in 2005 compared to 2000, and down slightly in the Southwest and West regions.
Comparatively, the number of producer respondents held relatively steady, by region, in 2005.
The average age of producers and employees continues to edge upward (Table 2). For producers, average age increased 8.2 years since '90, or one year for every 1.8 calendar years. The average age of employees increased 9.1 years since the first survey, or one year for every 1.6 calendar years.
In 1990, 17.9% of producers were 30 years old or younger. By 2005, there were 14% fewer producers in that age bracket, registering in at just 3.9%.
In the current survey, just under 20% of producers were 40 years old or younger, slightly more than the percentage of 30 years or younger group in 1990 (17.9%). This represents a dramatic shift during the 15-year period covered by the current and previous surveys.
The shift in the number of producers 41 years of age or older is noticeable and marks a significant trend, which is also reflected in the employee report.
At the upper end of the age brackets, 15.7% were 56 or older in 1990. That figure grew to 17.6% in 1995, 19.5% in 2000, and now represents about one-third of the producers (31.1%).
A look at the middle-age group (41-50) offers some reason for optimism, however, because these producers will likely be the active drivers of the industry for the next 10 years. In 1990, these producers represented 22.6% of respondents; today, they represent 33.7%.
One reason average age of producers has increased is some farmers are staying in the labor force longer. Additionally, there is a lack of young producers entering the industry.
There is also evidence of increased attrition by middle-aged producers. To understand this, we can follow a cohort's share of all producers over time.
For example, in Table 2 the producer cohort age group 25-30 in 1990 would be the 36-40 age group in 2000 and the 41-45 age group in 2005. That cohort represented 13.5% of the producers in 1990, 18.6% of the producers in 2000, and 14.1% of producers in 2005.
Exploring the change in the size of producer cohorts further suggests a potentially disturbing trend, however. In 1990, the cohort group aged 36-40 represented 16.6% of respondents. In 2005, this cohort group would be 51-55 years old and represent only 15.5%, which is a 7% decline from 1990.
Similar trends are seen for cohorts aged 46-50 and 51-55 in 1990. On a positive note, the cohort group aged 41-45 in 1990 actually recovered in 2005 after experiencing a sharp 11% decline between 1990 and 2000.
These results suggest that the industry lost experienced middle-age producers between 1990 and 2005. Without this loss, the increase in the percentage of vital middle-age producers between 1990 and 2005 would have been even greater.
As noted in the outset, the average age of producers increased from 41.9 in 1990, to 46 years old in 2000, and to 50.1 years in 2005.
A similar trend is seen in employees, with the average age increasing from 33.2 to 42.3 years of age during the 15 years of compiled data — an increase of 9.1 years. This increase is due to an increase in the percentage of employees older than 45, most notably from 2000 to 2005, when average age increased from 35.7 to 42.3 years. Meanwhile, the number of employees between the ages of 31 and 50 increased from 48.3% to 56.4%. Those over 65 also increased from less than 1% to 5.6%.
And, it's apparent, fewer young workers are moving into the industry. Between 1990 and 2005, the number of employees younger than 30 years of age dropped from 45.2% to 18.7%.
Historically, the majority of employees enter the pork industry between the ages of 25 and 35. However, the share of 25-35 year olds has declined from 50.4% in 1990 to 25.6% in 2005.
Retention of employees is also a problem. The cohort group aged 25-30 (26.7%) in 1990 was 36-40 (17.8%) in 2000, and 41-45 (14.8%) in 2005. This represents a decline of more than 44.5% during the 15-year period.
The relative change in the employee cohort group aged 36-40 in 1990 was even more dramatic. While they represented 14.8% of respondents in 1990, by the time they fell in the 46-50 range in 2000, they only represented 5.8% of respondents — a 61.5% decline. By 2005, this group, now 50-55 years old, had rebounded to represent 9.8% of employees.
These results suggest that the industry had difficulties attracting and retaining younger employees during the 1990s and early 2000s.
Industries gain strength from hiring, retaining and developing young employees. While the cohort trends show the industry lost fewer young employees between 1995 and 2000, that did not happen in the 2000s. The decline in the size of cohorts aged 25-40 is a concern.
In 1990, a high school diploma represented the largest group when producers and employees were asked for their highest level of education completed (Table 3). Although a high school diploma remained as the largest category for producers in three of the four years surveyed (the exception being 2000), a four-year college degree has been the most frequent response of employees since 1995.
The trend toward higher education is well established in both categories. In 2005, 64% of producers and 67% of employees indicated they had some education beyond high school.
The percentage of producers with more than a four-year college degree vacillated slightly over the last 15 years, ranging from 4.3% up to 6.5%. The biggest increase in educational groups for producers was in the vocational and two-year college degree areas, accounting for nearly 20% in 2005.
There are two striking trends with employee education levels between 2000 and 2005. There was a dramatic increase in the number of employees without a high school diploma, jumping from 3.7% up to 9.3%. The number with a high school diploma declined from 31.8% to 23.9% during the period.
At the other end of the spectrum, the percent of employees with a master's degree or higher increased from 3.4% to 14.2% of the employees. It should be pointed out, however, the doctor of veterinary medicine option was not offered in the 2000 survey.
About one-third of employees had a four-year college degree in 2000. That number fell to about one-fourth of employees in 2005.
Serving as a benchmark, it is interesting to note that in 2003 the U.S. Census Bureau reported that 9.9% of the civilian workforce had not completed high school, while 30% had obtained a high school diploma, 21.2% had achieved a four-year college degree, and 11.3% had attained an advanced degree. These results suggest the production segment of the U.S. pork industry has a favorable educational foundation, which is positive news because a more educated workforce is generally a more productive and better-paid workforce.
Both producers and employees in the Southeast and West consistently report having completed more education than their counterparts in the Midwest and Northeast. While this gap in educational attainment narrowed for employees between 1990 and 2000, this trend was reversed between 2000 and 2005. For producers, the gap in 2005 is wider than in 1990 and 1995, but narrower than in 2000.
There is a definite realignment of the production systems in the pork industry. Table 4 documents the specialization that is occurring, documented in part by a 39.4 percentage point drop in producers with farrow-to-finish operations, between 1990 and 2005. Farrow-to-finish operations have now dipped to less than half of the operations.
Likewise, feeder pig finishing and contract finishing increased dramatically between 1990 and 1995, accounting for a 13.3 percentage point increase for the two categories, while contract finishing took another 7.3 percentage point bump between 1995 and 2000. The two categories remained relatively stable between 2000 and 2005.
Almost one in 10 (9.5%) producers selected the new category, wean-to-finish operators, added in 2005. Feeder pig finishing operators grew from 1% of the respondents in 1990 to 9.2% in 2005.
Farrow-to-feeder pig operations have slipped from 10.8% in 1990 to 7.3% in the current survey. Some of the farrowing capacity apparently is being absorbed in contract farrowing/nursery units, as shown by the growth between 1995 and 2000.
Table 5 shows a continuing trend toward specialization and increased herd size. The percentage of employees working in units producing less than 3,000 head accounted for 47.4% of the workforce in 1990. By 1995, that block of employees was nearly cut in half to only 24.1%. Today, just 14.2% of the employees work in operations producing less than 3,000 animals annually.
In contrast, the percentage of employees working in operations producing 25,000 hogs or more annually has doubled, jumping from 25.7% in 1995 to 52.3% in 2005. The proportion of employees working in operations with 25,000 or more hogs in 2005 exceeds the proportion that worked in operations of 10,000 head or more in 1995.
Almost one in three (29.8%) employees worked in an operation that produced 100,000 or more pigs annually. This is greater than the percentage that worked in operations with 10,000 or more pigs produced in 1990.
The growth is also dramatic on the producers' side where in 2005, 34.8% of the producers report raising 10,000 head or more. The incremental increase from 8.7% in 1990 to 12.5% in 1995 and to 30.7% in 2000 reinforce the trend.
The percent raising 25,000 or more hogs annually increased from 3.4% in 1995 to 15.7% in 2005. The 100,000 or more category, selected by 4.4% of survey respondents, was added in 2005.
In managerial economics a concept called “survivor analysis” allows you to identify the size of operation that offers a unit-cost advantage. Finding the size of an operation that has increased its share of production over time identifies those sizes with a unit-cost advantage. The dramatic shift in the relative share of production for operations producing more than 5,000 hogs annually between 1990 and 2005 suggests these operations enjoy a unit-cost advantage over smaller operations. Between 2000 and 2005, the percentage of producers between 5,000 and 9,999 pigs appears to have stabilized.
When analyzing the difference between employee and producer survey responses based on annual production, it is important to realize that the employee survey is naturally weighted toward larger operations because larger operations hire more labor. It is also important to remember that each producer/employer response may reflect information on multiple employees. Producer responses tend to provide a more accurate picture of the trends in operation size.
In addition, while Table 5 portrays some general industry trends toward larger production systems, it is important to note that incremental options offered in the survey were changed in the 1995 and again in the 2005 surveys to more specifically reflect current production size categories.
Pork production continues to be a male-dominated industry, although women have increased their presence, particularly on the producer side.
In 1990, 5.6% of employees and 4.9% of producers were women. In 1995, the percentage of female employees increased to 8.1%, while the number of female producers decreased to 3.9%. In 2000, 11.7% of employees and 5.4% of producers were women. By 2005, the percentage of female producers had climbed to 6.7%, while the percentage of female employees was unchanged.
In 2005, the average number of years an employee has spent with a hog operation increased to 9 years after declining from 8.9 in 1990 to 6.5 in 2000. Overall, employee tenure increased a modest 1.1% over the past 15 years.
In comparison, based on 2004 Bureau of Labor Statistics (BLS) data, the median tenure for all workers in the United States age 25 and over was 4.9 years. Over the 13-year period from 1991 to 2004, employee tenure for U.S. workers over 25 reported by the BLS declined by 2%.
The average number of operations an employee has worked for decreased from 2.5 in 2000 to 2.3 in 2005. Additionally, the percentage of employees who have worked in more than two operations decreased from 37.9% in 2000 to 32.7% in 2005. This signals the reversal of a decade-old trend of increased employee turnover.
The increase in employee average tenure is positive news for the industry because it reduces labor search and training costs. This positive trend runs counter to trends in the U.S. labor market as a whole, and that suggests employees in the pork industry were not hit as hard by the recent recessionary downturn in the labor market. It also signals that wage rates are becoming more competitive.
Hog Farm Raised
As the number of families actively engaged in production agriculture slips each year, the pool of farm-raised laborers is naturally dwindling. The trend holds true for the pork industry.
In 1990, 59.4% of employees reported they were raised on a hog farm. This number slipped to 50.9% in 1995, 48.3% in 2000, and then rebounded slightly in 2005 to 50.2%. Clearly, half of the pork production workforce had no hog-raising experience prior to starting employment in the industry.
Authors: Terrance Hurley, associate professor of applied economics, University of Minnesota; James Kliebenstein and Peter Orazem, professors of economics, Iowa State University; Dale Miller, editor, National Hog Farmer.
|aIncludes: IA, IL, IN, MN, MO, ND, NE, OH, SD and WI.|
|bIncludes: CT, DC, DE, MA, MD, ME, MI, NH, NJ, NY, PA, RI and VT.|
|cIncludes: AL, FL, GA, KY, LA, MS, NC, SC, TN, VA and WV.|
|dIncludes: AK, AR, AZ, CA, CO, HI, ID, KS, MT, NM, NV, OK, OR, TX, UT, WA and WY.|
|16 - 24||0.7%||0.9%||2.3%||4.4%||7.9%||13.3%||17.9%||18.5%|
|25 - 30||3.2%||5.8%||6.8%||13.5%||10.8%||20.9%||21.2%||26.7%|
|31 - 35||7.1%||10.1%||14.4%||18%||14.8%||20.2%||19.4%||23.7%|
|36 - 40||8.8%||18.2%||18.6%||16.6%||15.1%||17.8%||17.3%||14.8%|
|41 - 45||14.1%||18%||17.3%||13%||14.8%||14.3%||11.4%||7%|
|46 - 50||19.6%||16.1%||13.5%||9.6%||11.7%||5.8%||5.3%||2.8%|
|51 - 55||15.5%||11.5%||9.6%||9.2%||9.8%||3.1%||2.9%||2.8%|
|56 - 60||13.1%||10.1%||7.4%||7.1%||6.8%||2.6%||2.6%||1.5%|
|61 - 65||9.2%||3.2%||5.6%||4.7%||2.7%||1.4%||1.1%||1.1%|
|Highest Level of Achievement||2005||2000||1995||1990||2005||2000||1995||1990|
|No High School Diploma||4.2%||4.1%||3.9%||4.8%||9.3%||3.7%||5.4%||5.9%|
|High School Diploma||31.4%||30.6%||32.9%||37.6%||23.9%||31.8%||27.3%||33.7%|
|Two-Year College Degree||7.2%||4.8%||6.8%||6.2%||6.7%||8.2%||10.1%||10.8%|
|Four-Year College-No Degree||9.6%||8.1%||11.1%||10.9%||5.5%||7.1%||7.6%||8.9%|
|Four-Year College Degree||28.7%||35.7%||26.6%||24.1%||25.7%||32.5%||29%||23.3%|
|Master's Degree or Equivalent||3.9%||4.6%||3.6%||4.1%||5.2%||2%||4.1%||3.8%|
|Ph.D. Degree or Equivalent||1%||1.9%||0.7%||1.2%||2%||1.4%||0.8%||1.2%|
|Doctor of Veterinary Medicine||0.9%||NA||NA||NA||7%||NA||NA||NA|
|Farrow to Finish||43.7%||51.6%||66.9%||83.1%||44.2%||40.8%||60.4%||61.4%|
|Farrow to Feeder Pig||7.3%||6.1%||8.5%||10.8%||14.1%||17.5%||13.2%||13%|
|Feeder Pig Finisher||9.2%||10.2%||9.1%||1%||3.2%||4.8%||4%||6.4%|
|Farrow to Feeder/Contract Finisher||2%||0.7%||1.9%||1.3%||3.7%||4.5%||3.9%||2%|
|Contract Farrow to Finisha||0.3%||0.6%||0.7%||NA||0.2%||0.8%||1%||2.1%|
|Wean to Finish||9.5%||NA||NA||NA||3.8%||NA||NA||NA|
|Note: NA means this response was not offered.|
|aWas not offered on the 1990 survey, but many employees reported it as “other.”|
|bAll surveys asked respondents to make only one choice — the choice that best described the operation. In 2000 and 2005, respondents reporting multiple types were specifically noted.|
|cFarrow-to-wean operations were the most common other type of operation specified in 2005.|
|Annual Hog Production||2005||2000||1995||1990||2005||2000||1995||1990|
|Less than 1,000||8.3%||3.9%||5.3%||5.6%||7.1%||2.1%||6.7%||18.6%|
|1,000 - 1,999||10.5%||14.1%||22.6%||31.6%||3.6%||2.7%||9%||17.3%|
|2,000 - 2,999||12.4%||14.7%||25.3%||25.4%||3.5%||6.4%||8.4%||11.5%|
|3,000 - 4,999||14.1%||16.2%||18%||15.7%||4.8%||6.5%||10.6%||12.1%|
|5,000 - 9,999||19.8%||20.3%||16.3%||13%||9.4%||10.8%||15.8%||18.3%|
|10,000 or more*||34.8%||30.7%||12.5%||8.7%||71.5%||71.5%||49.5%||22.2%|
|10,000 - 14,999||10.9%||9.8%||5.5%||NA||9.9%||13.4%||12.8%||NA|
|15,000 - 24,999||8.2%||8.4%||3.6%||NA||9.3%||10.9%||11%||NA|
|25,000 or more*||15.7%||12.5%||3.4%||NA||52.3%||47.2%||25.7%||NA|
|25,000 - 49,999||7.4%||NA||NA||NA||12.9%||NA||NA||NA|
|50,000 - 99,999||3.9%||NA||NA||NA||9.6%||NA||NA||NA|
|100,000 or more||4.4%||NA||NA||NA||29.8%||NA||NA||NA|
|Note: NA means this response was not offered.|
|*Incremental breaks were added in the 1995 and 2005 surveys; these lines reflect the composite of the lines that follow.|