In 1990s, American pig industry experienced great changes in vertical integration. Because the pig futures provide the reference price of the future spot, producers can adjust the output and predict the future price according to the change of market demand, while processors and sellers avoid risks through hedging, which makes it generally accepted for large pig breeding enterprises and large pork processing enterprises to trade through production contracts, replacing the previous open market transactions. The quantity, place and time of delivery are stipulated in the contract, and the price is based on the market, and corresponding rewards are given according to the quality or scale of the products. Under the production contract mode, large-scale pork processing enterprises provide management services, piglet and veterinary services, and pig farmers provide land, equipment and labor, and farmers get fixed returns and production incentives. Production contract and market contract have become the main trading methods of American pig production enterprises and pork processing enterprises. By 1999, nearly 60% of live pigs in the United States are produced through long-term contracts and vertical integration for many years.

American pig industry has explored a successful path, and pig futures have accelerated the formation of scale operation within the industry and vertical integration between industries. Large manufacturers use their own technical and financial strength to bring small manufacturers and upstream and downstream enterprises in the same industry into their own production system by signing long-term contracts and vertical integration. On the other hand, the expansion of scale promotes the progress of technology, which makes the evolution of the whole industrial chain enter the stage of scale development and spiral rise.

As the first domestic livestock futures product, live pig futures is under active research and development, and it is very likely to become the first new agricultural futures contract in 20 10. Understanding the impact of American pig futures on pig industry is of reference significance to China, and the launch of China pig futures may be an opportunity for the transformation of pig industry in China.