Economics

 Industry Partners


Prairie Swine Centre is an affiliate of the University of Saskatchewan


Prairie Swine Centre is grateful for the assistance of the George Morris Centre in developing the economics portion of Pork Insight.

Financial support for the Enterprise Model Project and Pork Insight has been provided by:



Author(s): D.D. DiPietre
Publication Date: June 10, 2013
Reference: Advances in Pork Production, Volume 24, 2013
Country: Canada

Summary:

Often the pork industry views maximum production as maximizing profit, but this only occurs with no costs associated (free input). When there are costs, the maximum level of production will be less than the maximum total production. In the 1980s to 2000s the focus shifted from the individual pig to herds and meat, and averages became the standard for evaluation. The goal became to spread fixed costs over more units, but did not account for the rise of variable costs after a certain output level. As well, it was about weight of meat produced, but failed to look at quality. Soon producing more specialized products did occur, and the global market opened. Then in the 2000s the volatile prices of feed and hogs changed the industry, and a high price for a hog no longer necessarily meant profit. Individual animal data is now rarely collected, and average group metrics are now used to determine future profitability. The future of production likely will continue to have volatile crop prices, and the need to keep records of crops will be important. The development of technology will continue, with more implementation. Metrics are currently looked at too individually, and correlations need to be assessed. In order to determine profit optimal production producers need to record more  than averages because the distribution in a population is currently being overlooked.

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