Economic Impacts from Increasing Pig Farrowing in Iowa

Hog production has historically been a significant, value-adding industry in Iowa. Sales of finishing hogs can result in gross income in the range of $2.5 billion annually. The economic activity would be greater as there are impacts on upstream and downstream sectors of the economy. Accounting for these impacts leads to a generation of more than $3 billion of annual gross product in Iowa. Throughout the past three decades, the swine breeding herd in Iowa has experienced a decreasing trend, with relatively sharp declines coming since the early 1990’s. Producers have increasingly looked to other parts of North America for a supply of feeder pigs. This reflects a lost opportunity for the Iowa pork production industry. This study evaluates the viability and economic impact of expanding the number of sows farrowed in Iowa. We estimate the impacts to the aggregate state economy from a revival of pig farrowing. Our estimates of costs and returns to farrowing show the potential to generate much value added profit. These profits would benefit farm owners, managers, input suppliers, and processors, etc. These impacts will ripple throughout the economy including rural communities. A 5 million head increase in SEW pig production would require approximately 238,000 additional sows. The feed bill would be about $30 million while the labor bill would be about $35 million. The income earned by employees and to those that sold the feed etc. goes toward buying other goods and services, multiplying the overall economic impact. In aggregate the addition of 5 million feeder/SEW pigs would produce $270 million of economic activity. A large part of this would occur in rural communities