Contract Finishing For New Entrants In Pork Production

The pork production industry is a far different industry today than it was fifty, twenty, or even five years ago. On diversified Midwestern farms during the mid-to-late 20th century, the swine enterprise was labeled "the mortgage lifter". The hogs added value to home-produced feedstuffs such as corn and increased the income from a given acreage base. As farm mechanization and technology rapidly developed, farms became larger and less diversified as livestock disappeared from many farmsteads. In this paper, we address the question whether swine units can be introduced to non-livestock farms via a coordinated agreement for the grower-finisher phase and make these farms more profitable. To do this, we first describe some of the changes that have taken place in the pork industry. Second, production contracts and grower payments are introduced. Next, we move on to issues of manure management and the value of manure to non-livestock farms. Finally, in the Appendix, financial analyses for sample contract finishing contracts are laid out to help farmers determine if contract finishing could benefit their farming operations.