National Hog Farmer teamed up with the National Pork Producers Council and economists from Iowa State University and the University of Minnesota to take a close look at the job market in the production segment of the pork industry. This third survey in a 10-year span, funded by the National Pork Board using checkoff dollars, captures unprecedented profiles of U.S. pork producers and the employees working in their production systems.
The 2000 survey, conducted in late 1999, serves as a follow-up to the benchmark surveys of pork producers and employees conducted in 1990 and 1995.
Project goals included learning more about the types of employees hired to work in pork production systems, the salaries and benefits being offered to them, their levels of education and training, 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.
The 10-year snapshot of pork industry employment trends sheds new light on the steady climb of salaries and benefits packages, and the increasingly higher education levels of the workforce and owners.
Using the 1990 and 1995 surveys as a basis, separate four-page questionnaires were developed and sent to pork producers and employees across the U.S. Selected questions in each survey overlapped so that responses could be compared.
Employer and employee responses in the two previous surveys matched fairly well, but there were a few discrepancies. Employees occasionally saw their contributions a little differently than their bosses did. We wanted to see if those discrepancies remained. More importantly, the chance to study and compare trends in the pork industry workforce over a 10-year period should prove invaluable.
Survey Recipients The National Hog Farmer qualified mailing list provided a select sample of producers/owners. A random sample of producers with an annual production of 2,000 head or more, or verified with 100 sows or more, were surveyed. This qualification level 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 a survey.
Responses were tabulated to identify differences by regions. The states within each region are footnoted in Table 1.
Naturally, not everyone answered every question, so the number of respondents varies slightly with each question.
Pascal Elisabeth, a graduate research assistant in the department of applied economics at University of Minnesota, conducted the data processing.
Production Shifts The percentage of employees reporting they worked in hog operations producing more than 10,000 hogs annually grew between 1990 and 2000 for all regions. The increase was most dramatic in the Midwest with a 324% increase in the 10,000-plus category, followed by the Northeast (272%), West (120%) and Southeast (70%).
For the Midwest and Northeast, the increase in the percentage of employees working for these large operations grew faster between 1995 and 2000 than between 1990 and 1995. For the West and Southeast, the 10,000-plus growth was faster in the 1990-1995 period than the 1995-2000 period.
The producer survey offers a slightly different picture. The percentage of producers reporting more than 10,000 hogs raised annually also grew during the 10-year period. Again, the increase was most dramatic for the Midwest (303%) followed by the Southeast (235%), West (193%) and Northeast (132%). For all four regions, the change in the percentage of producers with these large operations was greater between 1995 and 2000 than between 1990 and 1995.
Overall, producer and employee surveys demonstrate continued growth in the size of production facilities. It is also important to consider that the employee survey is naturally weighted toward larger operations because they hire more labor. And, of course, each producer's response can reflect information on multiple employees. Producer responses provide a more accurate picture of the increase in the number of operations producing more than 10,000 hogs annually between 1990 and 2000.
Again, looking at Table 1, the percentage of employee respondents working in Midwest operations was up slightly in 2000 compared to 1995 but down slightly from 1990. In the Southeast, the percentage of employee survey respondents was similar in 2000 (11.4%) and 1990 (11.6%), but less than in 1995 (15.8%). The percentage of employee respondents working in Western operations increased during the 10-year period from 10.1% in 1990 to 15% in 2000. The percentage of employee respondents in the Northeast operations declined from 5.4% to 4.6% between 1990 and 1995 with little change between 1995 and 2000.
Aging Table 2 shows some interesting trends in the age of producers. In 1990, 17.9% of producers were 30 years old or younger. By 2000, that age bracket decreased by two-thirds, so less than 7% of the producers were 30 or younger. At the upper end of the age brackets, 15.7% were 56 or older in 1990. That figure grew to 17.5% in 1995 and is now 19.4%.
A look at the middle-age group (41-50) offers some reason for optimism because researchers believe these producers will be the active drivers of the industry for the next 10 years. In 1990, these producers represented 22.6% of respondents; they now represent 34.1%.
The average age of producers increased by 4.1 years between 1990 and 2000, or one year for every 2.4 calendar years. One reason for increased producer age is that some farmers are staying in the labor force longer, so the share of pork producers between 55 and 60 and older than 65 has increased.
There is evidence of increased attrition by middle-aged producers. To see this, we can follow a cohort's share of all producers over time.
In Table 2, for example, the producer cohort age group 25-30 in 1990 would be the 36-40 age group in 2000. That cohort represented 15% of the producers in 1990 and 18.2% of the producers in 2000.
Exploring the change in the size of producer cohorts further suggests a potentially disturbing trend, however. In 1990, the cohort aged 36-40 represented 16.6% of respondents. In 2000, this cohort group would be 46-50 years old and represent only 16.1%, which is a 7% decline from 1990. Similarly, the cohort aged 41-45 in 1990 made up 13% of respondents. When they were between the ages of 51-55 in 2000, they made up only 11.5% of respondents, which is a decline of 14.8%.
These results suggest that the industry lost more experienced middle-age producers than it attracted between 1990 and 2000. Without this loss, the increase in the percentage of vital middle-age producers between 1990 and 2000 would have been even greater.
The average age of producers increased from 41.9 to 46 years old from 1990 to 2000. A similar trend is seen in employees in which the average age increased from 33.2 to 35.6 years old during the 10-year period. This is an increase of 2.4 years over the 10-year period, or one year for every four calendar years. This increase is due to an increase in the percentage of employees older than 35.
Fewer young workers are moving into the industry. Between 1990 and 2000, the number of employees younger than 30 years of age dropped from 45.2% to 34.8%. Meanwhile, the number of employees between 31 and 50 increased from 48.4% to 57.9%.
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 54.6% in 1990 to 44.6% in 2000.
Retention is also a problem. The cohort aged 25-30 in 1990 was 36-40 in 2000. In 1990, this cohort represented 30.9% of respondents. In 2000, they only represented 17.9% of respondents. That is a decline of more than 41.9%. The relative decline in the cohort aged 36-40 in 1990 was even more dramatic. While they represented 14.8% of respondents in 1990, when they were 46-50 in 2000, they only represented 5.7% of respondents, a 61.5% decline. These results suggest that the industry had difficulties attracting and retaining younger employees during the 1990s.
Industries gain strength from hiring, retaining, and developing young employees. While the cohort trends show that the industry lost fewer young employees between 1995 and 2000 than it did in the first half of the decade, the decline in the size of cohorts aged 31-35 and 36-40 remains a concern.
Gender The hog industry continues to be male-dominated, though women have increased their presence. In 1990, 5.9% and 4.9% of employees and producers, respectively, were women. In 1995, the percentage of female employees increased to 8.5%, while the number of female producers decreased to 3.9%. In 2000, 11.8% and 5.4% of employees and producers, respectively, were women. This represents a doubling of female employees and a 10% increase in female producers between 1990 and 2000.
Tenure The number of years an employee has spent in a hog operation has dropped from an average of 8 years in 1990 to 6.6 years in 1995 and to 6.4 years in 2000. In comparison, the median tenure for all workers in the U.S. aged 25 and over, based on 1996 Bureau of Labor Statistics data, was 5 years.
While pork production employees change jobs less frequently than the rest of the population, the trend appears to be moving toward the population average. One factor is that the proportion of employees planning to have their own hog operations has fallen from 75% to 40%. This represents a dramatic change in employees' commitment to stay in pork production.
Employees also appear to be less committed to their employers. The number of operations that an employee has worked for has steadily increased. In 1990, the average employee had worked for two other operations; this increased to 2.2 in 1995 and 2.5 in 2000.
Looking at the tenure issue another way, the increased movement between operations seems more dramatic when expressed as a percentage. The number of employees who reported they had worked for more than two other operations, the tally showed 26% in 1990, 28.8% in 1995, and 38.4% in 2000.
Education In 1990, a high school diploma represented the largest group when producers and employees were asked for their highest grade completed (Table 3). Although a high school diploma remained the largest category for producers in 1995, a four-year college degree was the most frequent response for employees.
The trend for both sectors is certainly toward higher education as 65% of producers and 64% of employees indicated they had some education beyond high school. By 2000, the four-year college degree represented the most frequent response for both employees and producers. The shift was most dramatic for producers, from 26.6% to 35.7% between 1995 to 2000, a 9.1 percentage point increase. The percentage of producers with more than a four-year college degree increased from 4.3% to 6.5% during the same five-year span.
It is interesting to note that corresponding data for the U.S. shows that about 15% of people over 25 years old did not have a high school diploma, while 42% had at least a college degree. Pork producers are as likely to have a college degree as the population overall. Pork production employees are more likely to have at least a high school degree, but less likely to have completed college.
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, it broadened for producers.
The labor force in general has become more educated and the demand for more-educated workers has increased. The pork industry appears to be keeping up with the general population.
Production Specialization 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 29% decline in producers with farrow-to-finish operations, or a 34% decline in relative share between 1990 and 2000. However, farrow-to-finish operations still represented more than half of the respondents (54.6%).
At the other end of the spectrum, feeder pig finishing and contract finishing increased dramatically. Producers who engaged in contract finishing increased from 0.2% of the respondents in 1990 to 5.4% in 1995, then to 13.4% in 2000. Producers who listed their operation as feeder pig finishing increased from 1.0% of the respondents in 1990, to 9.1% in 1995 and to 10.8% in 2000.
Farrow-to-feeder pig operations have become less common during the period. Some of the farrowing apparently is being absorbed in contract farrowing/nursery units, as shown by the growth between 1995 and 2000, but it is likely that as more finishing space is built on separate sites, average sow herd size will probably increase.
Table 5 shows a continuing trend toward specialization and increased herd size. The percentage of employees working in units producing 3,000 head or less accounted for 47.4% of the workforce in 1990. By 1995, that block of employees was almost cut in half to only 24.1% of employees. Today it represents 11.2% of the employees.
In contrast, the percentage of employees working in operations producing 10,000 hogs or more annually has jumped from 22.2% to 71.4%; it was 49.2% in 1995. The proportion of employees working in operations with 25,000 or more hogs in 2000 almost equals the proportion that worked in operations of 10,000 head or more in 1995. It is only slightly less than the percent that worked in 3,000 head or larger operations in 1990. This represents a dramatic shift in a relatively short period of time.
The growth is also dramatic on the producers' side where 18.3% more producers report raising 10,000 head or more - increasing from 12.4% in 1995 to 30.7% in 2000. This amounts to a 24.7% increase in the percentage of operations raising more than 10,000 hogs.In managerial economics a concept c alled "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 2000 suggests these operations enjoy a unit-cost advantage over smaller operations.
Hog-Farm Raised The number of families actively engaged in production agriculture slips each year. Consequently, the pool of farm-raised labor 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 percentage slipped to 50.9 in 1995 and to 48.3 in 2000. The message is clear. More than half of the pork production workforce had no hog-raising experience prior to starting employment in the industry.
Some say this trend is unfortunate because half of the workforce has to be trained from scratch. Others think that it is an advantage because they can train employees to work with their specific production system.