Hog and Pig Farming in Canada Industry Market Research Report from IBISWorld Has Been Updated
New York, NY (PRWEB) May 01, 2014 -- Following its 1598 debut in modern-day Canada, the Hog and Pig Farming industry has come a long way from providing the most popular meat of early settlers to becoming a struggling venture. According to IBISWorld Industry Analyst Antal Neville, “A swine flu outbreak devastated downstream demand in 2008 and 2009, leading up to the most recent five-year period.” Coming off this low, the industry has rebounded during the five years to 2014, with revenue growth in the double digits in 2010 and 2011. However, ballooning input prices have also contributed to this growth. Prices for corn and soybeans, key inputs into livestock feed, have risen due to their input into ethanol; thus, changes in fuel prices dictate cost of feed. Industry farmers have passed on some of these cost increases to downstream customers. Nevertheless, this growth has also been mixed with strong competition from alternative sources of protein. Stemming from recent challenges, IBISWorld expects industry revenue to grow an annualized 4.5% during the five years to 2014, to total $4.0 billion. In 2014, revenue is expected to drop 1.5% due to input price stabilization and slimming pork consumption.
Skyrocketing feed costs and rising ethanol demand are hitting the industry hard. In addition, a severe drought decimated US crops, leading to even higher costs for feed. Coupled with waning demand for pork from downstream processors, high feed costs have slashed industry profit during the period. Consequently, in 2012, industry leader Big Sky Farms was pushed into receivership.
While concentration in the industry is low, the hog and pig farming landscape is shifting toward large, capital-intensive farms. “This trend is likely to positively impact the industry, as larger operators have access to high-tech machinery that reduces per-unit input costs,” says Neville. Still, the major players that function under such economies of scale account for only about one-tenth of total hog and pig operations, leaving the majority flailing in the midst of input cost volatility and fluctuating demand. Corn's strong ties to oil and the volatility that can arise from such a link will continue to keep operators chasing profit instead of making it. Also, competition from other meat sources in light of perceived health issues will hinder pork's popularity. Given these conditions, IBISWorld forecasts industry revenue to grow at a slower pace in the next five years.
Concentration in the Hog and Pig Farming industry is low due to the significant number of family owned operations. However, concentration has been rising, with company numbers expected to decline over the past five years. Lower profitability due to higher feed prices has accelerated consolidation in the industry. Declining farm numbers coupled with relatively large herd counts illustrate the industry's shift toward larger hog farms.
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IBISWorld industry Report Key Topics
Establishments in the Hog and Pig Farming industry primarily farm hogs and pigs in farrow-to-finish operations that include breeding, farrowing, weaning and raising feeder pigs or market-size hogs. The term pig usually refers to the domestic mammal when it is young or small, while hog is the name typically given to domesticated pigs that weigh more than 120 pounds. While hog feedlots are included in the industry, the transportation of the livestock is excluded.
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld, +1 (310) 866-5042, [email protected]
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