In May of 2005, the newly formed Indiana State Department of Agriculture released its first strategic plan titled, Possibilities Unbound: The Plan for 2025. Among seven initiatives outlined, one focused on the opportunity for growth of the state’s pork industry. The report suggested that the size of the Indiana pork industry could double between 2005 and 2025. Now, ten years into that 20-year planning horizon we provide an update of the growth that has actually occurred.

U.S. pork production went through revolutionary changes in the past 25 years. That revolution included the way hogs were produced, where they were produced, the size of operations, and who owned the hogs. This transition can be characterized as moving from primarily a small-scale family owned production system to a largescale industrial model.

Indiana was no exception to the national trends in the way hogs were raised. In Figure 1 we show how some of these changes affected the way hogs were raised in Indiana. On the left side of the figure, you will note that most hogs were born in the state and fed to market weights in the state. This was the traditional family farm “farrow-to-finish” production system. The second source of hog production is young pigs that are born in other areas and then shipped into Indiana and fed to market weights in Indiana.

Figure 1. Indiana Hogs Raised: Million Head

One of the revolutionary production technologies of the early 1990s was multiple-site, all-in-all-out production that was adopted to enhance herd health. Multi-site production meant that farrowing operations could be geographically separated from the finishing operation.

Geographic separation of farrowing and finishing meant that each phase could move to the location with the most favorable economic cost structure. Farrowing expanded rapidly in North Carolina, Oklahoma, and even the Canadian Prairie Provinces where disease incidence was low. Young pigs are small thus can be moved hundreds of miles at low costs.

The costs of finishing hogs, on the other hand is driven by feed costs, so locations near abundant and cheap feed grains and protein meals are strongly advantageous. Proximity to processing is also a necessity since transportation costs for large hogs is costly.

The number of hogs born in Indiana and raised to market weight was generally in decline from the early 1990s to 2005, the point at which the Indiana State Department of Agriculture strategic initiative was developed. From 2005 to 2015, the number of pigs born and raised in the state has increased from 4.5 million to 5.4 million head, a 19% increase.

Figure 2. Indiana Raised and Processed

However, the largest growth in the state’s pork production industry since 2005 is due to rising “inshipments” of young pigs then finished to market weights in Indiana. Over the 25 years covered in Figure 1, inshipments have increased from a few hundred thousand to 3.6 million head in 2015. The Indiana Board of Animal Health reports in-shipments of hogs with the majority being young pigs brought into the state from other locations. In 2015, the top origins of young pigs were 1.1 million head from North Carolina and about 500,000 from Oklahoma. Neighboring states are important as well with roughly 437,000 from Illinois, 381,000 from Michigan, and 321,000 from Ohio. Some travel long distances with nearly 176,000 from Wyoming and about 157,000 from Canada.

So, how much has the industry grown since 2005? For this estimate we use the number of head produced in Indiana as composed of those born in the state plus the in-shipments that are born outside the state and finished to market weights here in Indiana. This number is shown in Figure 1 and increased from about 6.4 million head in 2005 to near 9 million head in 2015, representing an increase of about 40% over the ten years.

PROCESSING GROWTH AS WELL

The Indiana pork industry is more than the production of hogs. It is also the processing, packaging, and transportation needed to get pork products to consumers in this country and around the globe.

Indiana has an interesting history of processing since 1990. In the mid-1990s, Indiana was the state that shipped the most hogs out-of-state for processing. In 1995 as an example, about 7 million hogs were produced in the state but only half of those were processed in the state (3.5 million head). Many hogs were raised here, but not processed here.

This led to a concerted effort of the state’s pork producers, state government agencies and Purdue University to highlight this fact and to seek additional investments in pork processing. That effort was fruitful as new investments were made in existing facilities and a major new plant located in the state. By 2005, the number processed in the state had risen to 7.1 million head and has moved upward to a record 8.5 million head in 2015. From the Strategic Plan year of 2005 to 2015, the number of head processed increased by 20%.

SUMMARY

The number of hogs produced in the state had been on the decrease in the 1990s and early 2000’s. In 2005, the Indiana State Department of Agriculture highlighted hog production as an opportunity for both downtrend reversal and ultimate growth, suggesting a doubling of the industry in 20 years by 2025. Because of environmental concerns over CAFO’s (concentrated animal feeding operations) at that time, it was a bold move for state officials to invite hog production into the state.

The first 10 years of that 20-year horizon has now passed. A reading of the state’s industry shows that the number of animals raised in the state has increased by about 40%. About one-third of this growth was due to more pigs born in the state and about two-thirds was due to more in-shipments of young pigs to be finished in the state. Growth has also occurred in the processing sector as the number processed in the state has expanded by about 20% over the past 10 years.

Prospects for future growth are positive as well! A new processing plant is being built in Coldwater Michigan, about 60 miles north of Ft. Wayne Indiana. That plant is scheduled to initially process about 2.5 million head per year. It will likely source the majority of hogs from Michigan, Indiana, and Ohio. Indiana’s production is the largest of the three and represents around one-half of the three state total. This provides an opportunity for Indiana production to expand by about 500,000 head or more depending on how the new plant affects capacity utilization of competitors in the region.

Indiana state officials took a bold step in promoting pork production a decade ago by suggesting a doubling in 20 years, at the 10-year point the number of hogs raised has increased about 40%. Most importantly, the industry has had to maintain high standards in meeting environmental regulations and in proving they can be good neighbors. If they can continue to do this, then more growth appears to be on the way.