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Manure Value, Pricing Systems, And Swine Production Decisions

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  • Huang, Haixiao
  • Miller, Gay Y.

Abstract

Based on a swine producer's profit maximization model in which manure value and packers' live market weight pricing systems are considered, the optimal farm inventory and optimal hog market weight are simultaneously solved for scenarios generated from the combination of two crop rotations, two forms of manure storage, two levels of manure incorporation, and two nutrient application standards. First, our results suggest that manure value has a significant impact on the optimal farm inventory as well as on the profitability of an operation. The optimal size of operation identified is quite large and varies considerably among the scenarios. Our results indicate that shallow pit buildings with lagoons can support a larger operation scale and require less acreage for manure dispersion than systems with slurry basins. For slurry basin systems, manure applications with immediate incorporation are more profitable than applications with no incorporation. Second, our results show that the optimal hog market weight is insensitive to benefits and costs of manure handling and application, reflecting a dominant influence of the pricing system on a producer's hog marketing decision. Finally, our results show that though more acres are needed for manure application when a P standard is applied in a corn-soybean rotation, still a P standard is economically advantageous to swine farmers and this standard also makes better use of manure nutrients.

Suggested Citation

  • Huang, Haixiao & Miller, Gay Y., 2003. "Manure Value, Pricing Systems, And Swine Production Decisions," 2003 Annual meeting, July 27-30, Montreal, Canada 22233, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea03:22233
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    File URL: http://purl.umn.edu/22233
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    References listed on IDEAS

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    1. Ronald A. Fleming & Bruce Babcock & Erda Wang, 1998. "Resource or Waste? The Economics of Swine Manure Storage and Management," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(1), pages 96-113.
    2. Roka, Fritz M. & Hoag, Dana L., 1996. "Manure Value and Liveweight Swine Decisions," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 28(01), pages 193-202, July.
    3. Roka, Fritz M. & Hoag, Dana L., 1996. "Manure Value And Liveweight Swine Decisions," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 28(01), July.
    4. Schnitkey, Gary D. & Miranda, Mario J., 1993. "The Impact Of Pollution Controls On Livestock-Crop Producers," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(01), July.
    5. Boland, Michael A. & Preckel, Paul V. & Schinckel, Allan P., 1993. "Optimal Hog Slaughter Weights Under Alternative Pricing Systems," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 25(02), December.
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    Keywords

    Livestock Production/Industries;

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