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The imputed pig death loss contained in the reported monthly U.S. Department of Agriculture (USDA) pig crop data over the December 1995-June 2006 period ranged from —4.93% to 12.75%. Clearly, there are substantial measurement errors in the USDA monthly pig crop data. In this paper, we present alternative monthly U.S. pig crop data using the biological production process, which is compatible with prior knowledge of the U.S. hog industry. Alternative pig crop data are applied to a slaughter hog model and tested comparatively to USDA pig crop. Test results reject the validity of USDA pig crop data in favor of the alternative data.

An inverse live hog demand model was estimated to analyze claims that the live hog own quantity demand flexibility's magnitude has increased in recent years. A second objective of this research was to estimate the impact changes in processing capacity utilization rates have on live hog prices. Iowa - Southern Minnesota barrow and gilt price was modeled as a function of average daily hog slaughter, a processing capacity utilization ratio, an index of processing and marketing costs, a retail demand shift index, pork cold storage stocks, and monthly binary variables. Results indicate that in recent years live hog prices have become more responsive to changes in hog slaughter. Additionally, changes in processing capacity utilization rates, at times, also have a relatively large impact on live hog prices. Finally, when the large live hog price decline that occurred during the fall of 1998 is examined, model results indicate that the accumulation of large pork cold storage stocks, the sharp increase in processor's capacity utilization rates, an increase in average dressed weight, and the increase in average daily hog slaughter all had a large negative effect on live hog prices.

The maturation of the US beef and pork markets and increasing consumer demands for convenience, safety, and nutrition suggests that the beef and pork industries must focus on product development and promotion. New marketing arrangements are developing that help coordinate production with consumer demands. The relative high levels of incomes in the United States are likely to increase the demands for branded products rather than increase total per capita consumption. Foreign markets represent the greatest opportunity for increased demand for commodity beef and pork products. Increasing incomes in developing countries will likely allow consumers to increase consumption of animal-source proteins. Real prices of beef and pork have declined substantially because of sagging domestic demand and increasing farm-level production technologies. Increasing US beef and pork exports have obviated some of the price declines. Pork attained a net export position from a quantity perspective in 1995. The United States continues to be a net importer of beef on a quantity basis but is close to becoming a net exporter in terms of value. By-products continue to play a critical role in determining the red meat trade balance and producer prices. The United States, however, must continue to become cost, price, and quality competitive with other suppliers and must secure additional market access if it is to sustain recent trade trends. Several trade tensions remain in the red meat industry. For example, mandated COOL will undoubtedly have domestic and international effects on the beef and pork sectors. Domestically, uncertainty regarding consumer demand responses or quality perceptions regarding product origin, as well as added processor-retailer costs will be nontrivial. How these factors balance out in terms of benefits versus costs to the industry is uncertain. From an international perspective, some beef and pork export suppliers to the United States could view required labeling as a trade restriction, which could ultimately impact future US red meat exports. Conversely, some countries may view such labeling requirements as an opportunity to brand high-quality products. The US lamb meat industry has experienced declining real prices, domestic production, and demand. The cessation of wool incentive payments, increased environmental regulations, and competition by imports have significantly affected the industry. Import suppliers have capitalized on product quality in this niche market. Trade restrictions initially imposed in 1999 by the US Government were ruled illegal by the WTO. The US Government responded by providing financial assistance to lamb producers. Product quality improvements and promotion aimed at the domestic market, however, will be critical factors in shaping the economic viability of the US lamb meat industry.

The US swine industry is large and growing. The quantity of pork desired by consumers of US pork is growing at the rate of 1.5%/y. New production systems and new technology have enabled production per sow to grow at a rate of 4% annually in recent years. Consequently, the number of sows in the United States is declining. Because productivity growth is outpacing demand growth, the deflated price of hogs and pork is declining. Hog production and prices continue to exhibit strong seasonal and cyclic patterns. Pork production is usually lowest in the summer and highest in the fall. Production and prices tend to follow 4-year patterns. The US swine industry continues to evolve toward fewer and larger producers who rely on contracts for both hog production and marketing. In 2000, over half of the hogs marketed were from approximately 156 firms marketing more than 50,000 head annually. These producers finished 60% of their production in contract facilities. Over 90% of their marketings were under contract or were owned by a packer. These producers expressed a high level of satisfaction with hog production. Both they and their contract growers were satisfied with production contracts. These large producers were satisfied with their marketing contracts and planned to continue them in the future. The hog industry has changed a great deal in the last decade. There is little reason to believe this rapid rate of change will not continue. This swine industry is highly competitive and profit driven. Profit margins are too small to allow producers the luxury of ignoring new technology and innovative production systems. Consequently, hog production will continue its rapid evolution from traditional agriculture to typical industry.

Market hog prices historically have shown great variation and have often followed a cyclical pattern. Franzmann (1979) finds evidence of a four-year and a twenty-eight-year cycle in hog prices. Price cycles imply the possibility of forecasting long-range prices. In turn, forecasting suggests the opportunity to vary the production or marketing process in order to maximize profits.