| Overview
History of North Carolina Hog Farming
 The
hog farming industry arose in the eastern portion of North Carolina
during the early 1980s and experienced unprecedented growth during
the 1990s. The hog farming industry seemed to be a logical step
for the farmers of the state, who were facing declining revenues
from North Carolina's famed tobacco crops.
Several factors led to the explosion of the hog farming industry
in North Carolina. The most important of these was the construction
of the world's largest meat processing plant in 1992, located in
Bladen County, NC. Today the plant employs thousands of people and
processes about 8 million hogs per year. North Carolina hog production
is based on a contracted system that utilizes independent farmers
who specialize in specific stages that breaks hog production down
into three areas that include the sow unit, the nursery unit, and
the finishing unit.
The development of megafarms in the 1980s resulted in North Carolina
having 211 farm locations with over 1,000 sows due to a systems
approach that standardized buildings, equipment, and hog management
with the objective of minimizing operating costs.
Lenient environmental regulations and local zoning exemptions provided
large-scale hog farms the opportunity to construct several megafarms
throughout eastern North Carolina. After several environmental disasters
affected the region, legislation was enacted to curb the hog farming
explosion in eastern North Carolina and promote cleaner living conditions
for the residents and wildlife in the area.
Timeline of NC Hog Farmining Industry
1980 - North Carolina hog farms range between 10,000 and 25,000
hogs in size.
1985 - North Carolina ranks 7th nationally in hog production.
1991 - NC Senator Wendell Murphy co-sponsors legislation that exempts
large-scale hog farms from local zoning regulations.
1992 - Smithfiled Foods, Inc opens the world's largest meat processing
plant in Bladen County, NC.
1994 - NC hog population has triples to 10 million, compared to
a 5% increase nationally.
1995 - North Carolina Senate passes Bill 1080, the Swine
Farm Siting Act, requiring new swine houses or lagoons to be
located at least 1500 feet from an occupied residence, at least
2500 feet from any school, hospital, or church; and at least 100
feet from any property boundary.
1996 - President Clinton signs the Freedom to Farm Act in an attempt
to cut Federal-farming subsidies.
1997 - The Clean
Water Responsibility Act, part of Bill 515, places a moratorium
on the construction of farms with more than 250 hogs or the expansion
of existing large farms in the State of North Carolina.
1999 - Hurricane
Floyd hits North Carolina, flooding hog waste lagoons and contaminating
the water supply.
2003 - NC Gov. Mike Easley successfully calls for a four-year extension
of the moratorium on the construction of hog farms in eastern North
Carolina.
Major Industry Players
Over the last two decades, the hog farming industry has seen a
tremendous shift towards consolidation. In 1985, the top four pork-producing
companies in the United States accounted for 32% of the market.
By 1998, industry consolidation had resulted in the top four pork-producing
companies controlling 62% of the market.
Leading the way in the hog farming industry are vast corporations
that utilize vertical integration to maintain quality and oversee
all aspects in production. The leading pork packing companies own
thousands of sows themselves, have contracts with other hog farmers
to raise even more sows, and have direct contracts with most of
the other hog packers. As a result of the consolidation within the
hog farming industry, five major vertically integrated pork-producing
companies have emerged as industry leaders.
Top 5 American Pork Producers
| Company Name |
Market Share Percentage |
| � |
� |
| Smithfield |
26% |
| Tyson/IBP |
17% |
| Swift(ConAgra) |
11% |
| Cargill/Excel |
8% |
| Hormel |
8% |
Smithfield Foods, a Fortune 500 company, is the top pork producer
in the United States as well as in the entire world. Through the
acquisition of such competitors as Farmland Foods,  Murphy
Farms, and Carroll's Foods, Smithfield has unprecedented ability
to produce over 11 million hogs annually. In addition to its production
capabilities, Smithfield operates the world's largest processing
plant in Bladen County, NC, which has the capability of slaughtering
over 40,000 hogs of the 80,000 hogs Smithfield slaughters every
day.
 Tyson
Foods, the leading chicken producer in the United States, entered
the pork-producing industry in a big way when it purchased the country's
number two pork producer IBP, in 2001. The acquisition of IBP made
Tyson the leading meat producer in the world.
�
 Swift
& Company, a division of ConAgra Foods, is the nation's third
largest pork producing company with an 11% market share. The majority
of the company's operations are centered in the Midwest, where its
successful Armour brand is produced.
 The
Excel Corporation, a subsidiary of Cargill Foods, has an 8% share
of the market. Excel has been in the pork-producing industry since
1987 and produces over 2 million hogs per year.
 Hormel
Foods, the fifth leading pork producer in the United States, is
based in Austin, MN and has over 15,500 employees.
�
Top Hog Farming Companies in North Carolina
North Carolina is the second leading hog producer in the United
States, behind Iowa, with a hog population of over 10 million. The
industry has seen a hog population explosion since 1992, when North
Carolina's hog population totaled about 2 million. The majority
of the hog industry in the state is located in the Southeastern
region of North Carolina, particularly in the counties of Duplin,
Sampson, Bladen, and Robeson.
The hog industry in the state of North Carolina is dominated by
three major companies, one of which is the leading pork producing
company in the world. The three leading pork-producing companies
in North Carolina are Smithfield Foods, Prestage Farms, and Premium
Standard Farms.
Smithfield Foods, the world leader in pork production and a Fortune
500 company, dominates the North Carolina hog farming industry.
The Virginia-based company produces over 11 million hogs annually
with the majority of those sows being raised and processed in the
state of North Carolina. Through its strategy of vertical integration,
Smithfield is has been able to contract North Carolina hog farmers
to raise its sows until they are ready to be processed in its meat
packaging facility located in Bladen County, NC, which is the largest
of its kind in the world.
Prestage Farms, based in Clinton, NC, was founded in 1983 and produces
over 123,000 sows that result in about 450 million pounds of pork
annually. The company employs over 1,000 people and has over 700
contracts with farmers to raise their sows. All of the sows produced
by Prestage Farms are sold to Smithfield Foods.
Premium Standard Farms, a Missouri based company, produces about
1.9 million hogs per year in North Carolina in farms are primarily
located in Duplin, Greene, Pitt and Sampson counties. The company
has over 200 contracts with North Carolina farmers to raise their
hogs. An 800,000 square foot processing plant located in Clinton,
NC, processes over 9.1 million hogs annually for Premium Standard
Farms and employs approximately 1,200 people.
Information courtesy of:
Article on North Carolina Hog Farming by Chris Hunt and Kelly Zering
http://www.ag.uiuc.edu/archives/experts/swine/1215.html
The Fayetteville Observer -- http://www.fayettevillenc.com/
Major newspaper in the heart of North Carolina's hog farming region.
Oligopoly Watch --http://www.oligopolywatch.com/2003/12/28.html
An article on the consolidation occuring within the hog farming
industry.
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