The research described in this paper analyses agglomeration effects and spatial externalities in the Hungarian hog sector between 2000 and 2010. We apply a spatial lag – spatial error regression model to capture horizontal and vertical spillover effects and to understand the environmental restrictions that determine the location of pork production at the municipality level. Due to the dual nature of the structure of the Hungarian pork industry, we investigate agglomeration effects for individual and corporate farms separately. Results indicate that pork production by these farm groups is affected by different factors in different ways.