An economic analysis of swine production in the Tennessee Valley watershed of Tennessee

The primary objectives of the study were to determine the effect of specific variables on the net returns to swine producers, to determine the competitiveness of swine with other major farm enterprises in the use of farm resources and to determine crop and livestock combinations which will maximize returns to the fixed resources for specified resource situations. The analysis was conducted under various resource and pricing situations for representative-type farms in three study areas of the Tennessee Valley Watershed Area of Tennessee.

The representative farm included 160 acres of openland in Area I, 135 acres of openland in Area II, and 125 acres of openland in Area III. The base labor supply included 3,000 hours of annual labor. The land labor ratios were varied by alternatively increasing farm size by 100 and 200 percent and labor to 6,000 and 7,392 hours of available labor. The size of the livestock enterprises were restricted to not more than 120 Grade "A" dairy cows; 200 brood sows; 3,000 purchased feeder pigs; 500 beef steers; 200 beef cows; and 100 ewes.

Standard budgetary techniques were utilized in developing costs and returns, input requirements and estimated output for the major crops and livestock considered in the analysis. Linear programming techniques were used to determine the optimal farm organization which would maximize returns to land, labor, capital, and management for each situation.

Optimal farm organizations were developed for each of the resource situations considered when swine was an excluded alternative and when swine was an alternative, and swine prices were varied from $30 to $60 per hundredweight. Variations were also made in grain prices, number of pigs produced per sow, feed conversion ratio for finishing hogs, and in livestock enterprises considered.

In general, when swine were priced at $35 per hundredweight and above, the optimal farm organization included either a farrow-to-finish swine production system or the feeding out of purchased feeder pigs to slaughter weights. The number of brood sows varied from 55 to 194 as the land-labor ratios were varied by area. The number of purchased feeder pigs varied from 32 to 2,834. A large volume of grains would be purchased in most situations analyzed.

When the price of corn was varied from $1.50 to $4.00 per bushel, the number of hogs produced per sow from 10 to 20 per year, and the feed conversion was varied from 3.2 to 4.8 pounds of feed per pound of gain, the enterprise organization remained relatively stable; however, large changes occurred in the potential net returns to land, labor, capital, and management.

When comparisons were made of livestock alternatives, highest potential net returns were realized when the farm organization was restricted to swine. Where grain purchases were not permitted, the returns from swine production were severely reduced.

Based on the assumptions and results of the study, farrow-to-finish swine production and feeding out purchased feeder pigs appear to be relatively profitable farm enterprises under a variety of technical conditions and resource situations when the price of slaughter hogs are $35 per hundredweight and above.