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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:
Mitigating the Compliance Cost of a Phosphorus-Based Swine Manure Management Strategy
Posted in: Economics by admin on January 1, 2004 | No Comments
Regulatory changes by federal and state agencies portend a switch from nitrogen based livestock manure disposal policies to phosphorus-based policies. This paper estimates the compliance costs of such a policy change for a hypothetical hog-grain farm in North-Central Indiana. The farm includes 1,500 acres of cropland and has the capacity to raise 11,970 grow-finish hogs annually. The farm model also has the potential to produce four different crops on six different land types. A nonlinear math-programming model was developed to determine the optimal mix of management activities for a phosphorus-based regulation. The model allows mitigation of compliance costs via the choice between four different pig diets, three alternative methods of manure disposal, changes in timing of manure application, and crop pattern adjustments. This analysis includes that the new regulation will result in a decrease in whole-farm returns above variable costs, the use of phytase enzyme in pig diets, and an increase in wheat acreage. The model also reveals that it is optimal for the farmer to hire a custom hauler to assist in application of manure in an effort to reduce the degree to which available field days constrain farming activities and land application of manure. The estimate cost to the farmer, as a result of the policy change, ranges between $0.56 and $21.74 per unit of pig production capacity.
Economic weights for feed intake in the growing pig derived from a growth model and an economic model
Posted in: Economics by admin on January 1, 2003 | No Comments
The aim of this paper is to derive economic weights for parameters of the Technisen Model Varkersvoeding (TMV) growth model, in particular for feed intake and to illustrate the effects of different levels in these parameters on performance traits and economic weights for parameters of the growth model. It is found that economic weights for parameters of the growth model depend on the level of feed intake in relation to the optimum feed intake, while conventional breeding objectives always put a negative economic weight on feed intake. Advances in performance recording procedures to obtain information necessary to implement growth models into breeding programs are required. Electronic feeders that are able to control the level of feed intake for individual pigs together with electronic
scales and video images allow recording of the information necessary to implement growth models in genetic
evaluation systems.
Technological Changes in Beef and Pork Production: Effects on Marketing Margins and Prices
Posted in: Economics by admin on | No Comments
Our study focuses on the effects of changing
meat packer and farm-level technologies on real
beef and pork farm-wholesale marketing margins
and on livestock prices. Results indicate cost savings
from meatpacking technologies increase real
livestock prices, while technological changes at the
farm level reduce real livestock prices. On balance,
the positive effect from meatpacking technology outweighs the negative effect of farm-level technological
change.
Analysis of Economically Optimal Nutrition and Marketing Strategies for Paylean Usage in Hog Production
Posted in: Economics by admin on | No Comments
Under historical average prices, feeding Paylean appears to be a profitable innovation
for many producers. Regardless of whether Paylean is adopted or not, the highest returns
accrue to production systems with superior management and growing environments. In
addition, a phase-feeding program makes a substantial contribution to increasing returns.
Paylean requires increasing the dietary lysine percentage to obtain the full potential
benefit. The optimal Paylean concentration and net return from Paylean adoption
increase with the ratio of lean value to fat value. It is optimal to initiate Paylean supplementation
for CF hogs at a lighter weight and feed Paylean for a longer period compared
with SEW hogs.
Based on results of the sensitivity analysis, the optimal Paylean concentration is
sensitive under payment schemes 3 and 4 only, and the length of the optimal Paylean
supplementation period is relatively stable. In addition, the returns from hog production
are not sensitive to the price of Paylean, but are highly sensitive to finishing hog and
feeder pig prices.
Future work should examine additional strategies for managing Paylean. Ideally,
these approaches will be coupled with live animal studies that evaluate the biological
responses to a broader range of Paylean supplementation strategies-including step-up
programs where the Paylean concentrations are increased over time. Additional research
is also needed to assess the effect of Paylean on the within-barn variability in hog
growth. Ultimately, a stochastic model of hog growth should be developed that permits
fme-tuning of herd-level marketing strategies and allows evaluation of Paylean’s effect
on herd variability and its impact on producers’ net returns.
An empirical analysis of the demand for wholesale pork primals: Seasonality and Structural Change
Posted in: Economics by admin on | No Comments
This study focuses on estimating wholesale pork primal demand relationships in order to determine their own quantity flexibilities, whether these flexibilities have changed over time, and seasonal price fluctuation. A set of equations for pork loin, rib, butt, ham, pork belly, and picnic primals was estimated. Monthly data over an 11-year period were used to determine that their own-quantity flexibilities varied across months, that they increased in absolute value over time for some primal cuts, and cold storage stocks were used as an inventory control measure to reduce price variation for some primal cuts.
Alternative Pork Production Systems: Overview of Facilities, Performance Measures, and Meat Quality
Posted in: Economics by admin on | No Comments
Intensive outdoor pig production systems have been considered in recent years in some
parts of the world. These alternatives to traditional slatted-floor indoor systems may become
more common as environmental and/or animal welfare regulations increase. The objective of this paper is to compare outdoor and indoor pig finishing systems. The results were variable. Some reasons for this variation include differences in pig birth environment, seasonal effects,
and quality of ground or bedding surfaces. Research from Texas Tech University indicates that
outdoor born pigs have higher growth rates but more backfat. A possible advantage for outdoor
rearing may be linked to increased a* values and decreased L* values of the loin muscle. Darker
colored pork is more desirable for export markets because of the increase in water holding
capacity. A careful economic analysis should be conducted to determine if increased backfat and
feed:gain that is associated with outdoor finished pigs could be offset by higher market prices for
meat products from pigs finished in an outdoor environment. Alternative nutrition research
could lead to decreased backfat levels of outdoor finished pigs. If consumers are willing to pay
more for products that are produced as “sustainable”, “natural”, or others, then these production
systems could be very successful in the future. There are some real differences in pork quality noted in the literature. However,
differences in pork quality vary among the different environments that were investigated.
Consumer perception is such that when they enter a retail environment they are willing to buy
pork products with social assurances. In some cases, consumers may believe the alternative pork
products will taste better. We can say quite clearly that alternative products do not taste worse
than conventional products. Pork produced from pigs born and reared outdoors was equal to or
better than pork from conventional systems under some circumstances in our experiences.
Success of alternative production systems will depend on many factors and consumer
“willingness to pay” for these products would certainly increase economic benefits for these
production systems.
Consumer perceptions: pork and pig production. Insights from France, England, Sweden and Denmark
Posted in: Economics by admin on | No Comments
The aim of this study is to use focus groups to obtain insights into decision-making towards fresh pork purchase and attitudes towards today’s pig production systems using consumers from France, England, Sweden and Denmark. It was found that many positive perceptions of pork meat were evoked, such as being good value for money and always available.
Negative images of the systems of production used today were expressed, but often rationalised in terms of consumer demands, market competition and by comparisons to previous systems of production. Knowledge of production systems appeared of little consequence in terms of meat market potential as several groups freely remarked that there was no link between the negative images of production methods and their purchase behaviour. The groups were clearly confused and had a strong mistrust in the limited information at the point of meat purchase. Careful consideration should be given to the labelling, in particular, taking account of the evident consumer ethnocentrism, and assuring that this information enhances consumer confidence.
Economic Impacts of Banning Subtherapeutic Use of Antibiotics in Swine Production
Posted in: Economics by admin on January 1, 2002 | No Comments
The objective of this study is to develop useful economic estimates of the impact of potential restricted-use policies for antimicrobial agents used in swine production as growth promotants. By using a model similar to that used by Wohlgenant, the economic impacts of banning antimicrobials in swine production are measured by the changes in producers’ and consumers’ surplus. It was found that a ban on the use of antimicrobial agents as growth promotants for swine would be costly, totaling $242.5 million annually, with swine producers bearing $153.5 million of the cost in the short run. In the long run, the loss borne by consumers would likely be larger than the
loss borne by producers. Based on a 30-year planning horizon and a 4% discount rate, the net present value of these increased costs would be $3.2 billion.
Value of Feed Peas to Swine Diets
Posted in: Economics by admin on | No Comments
This study was undertaken with the following objectives: 1) identifying feed deficit regions in the United States, 2) determining the value of field peas as a ration ingredient in swine diets, and 3) identifying the most valuable nutritional components of peas for this use. The results of the study suggest that peas are an attractive alternative as a feed ingredient in hog diets, especially in feed deficit regions. Peas can be part of the least-cost diet replacing corn, barley, and soybean meal. Except at high prices or under low-cost periods for alternative feedstuffs, peas can constitute up to 39 percent of the diet for pigs in the 50 to 80 pound weight category. For hogs 80 to 140 pounds, peas account for up to 52 percent of the diet if prices are low enough. Peas can constitute 36 to 42 percent of the diet for hogs in this class. It is possible for peas to account for 63 percent of a least-cost diet for hogs 140 to 190 pounds, but this would require lower than average prices received in recent years in North Dakota. With reasonable prices, though, peas could account for up to 54 percent of the least-cost diet for hogs in this phase. With very low prices, it is possible for the least-cost diet for 190 to 260 pound hogs to consist of 71 percent peas. Even with this high inclusion rate, methionine is not added because the larger hogs have lower requirements for amino acids.
Environmental regulation and implications for competitiveness in international pork trade
Posted in: Economics by admin on | No Comments
Environmental concerns linked to hog production are growing in the United States, Canada and the European Union. New regulations controlling animal manure management are being imposed to address these concerns. This study determines that potential increases in U.S. and Canadian environmental regulation would have minimal effects on the relative competitiveness of pork exports for these countries. By contrast, more stringent European Union regulations have the potential to significantly reduce EU competitiveness and contribute to a trend of increasing export market share for U.S. and Canadian pork products.