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Impacts of PST on Optimal Production and Marketing Decisions of a Grow-Finish Hog Farm Operation

Published online by Cambridge University Press:  15 September 2016

Ramu Govindasamy ,
Donald J. Liu  and
James Kliebenstein
Ramu Govindasamy
Affiliation:
Department of Agricultural Economics & Rural Sociology, University of Arkansas
Donald J. Liu
Affiliation:
Department of Economics, Iowa State University
James Kliebenstein
Affiliation:
Department of Economics, Iowa State University
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Abstract

This paper examines the impact of PST on the optimal production/marketing decisions of a grow-finish hog farm operation. The analysis evaluates PST from three angles: the feed efficiency effect, the leaner meat price effect, and the aggregate-supply-induced price effect. When limited to the feed efficiency effect only, the primary response to the new technology is to increase the animal turnover rate of the operation. When the leaner meat price effect is also included, marketing weight increases while turnover rate remains relatively unchanged. Additionally, if the increased aggregate supply depressed the market price by more than 10%, the benefits from improved feed efficiency and leaner meat will be completely dissipated. Aggregate price adjustments (reductions) of less than 10 percent maintained positive producer benefits resulting from improved feed efficiency and leaner meat.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 22 , Issue 2 , October 1993 , pp. 166 - 174
Copyright
Copyright © 1993 Northeastern Agricultural and Resource Economics Association 

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