Masters Theses

Date of Award

8-1975

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

John Brooker

Committee Members

Bill Trevena, Larry Morgan, Emit Rawls

Abstract

The primary purpose of this study was to determine costs which buyers incur while purchasing pigs through organized feeder pig sales and the costs of shipping feeder pigs to their final destination.

The survey method was used to obtain information for this study. Two questionnaires were developed since order and farmer buyers comprised two distinct groups. For analysis purposes, data were summarized and, where possible, put into tabular form. Where applicable, the buyers were placed into two size categories. Based on the number of feeder pigs purchased annually, order buyers were classified as "large" (more than 30,000 pigs) and "small" (less than 30,000 pigs). Farmer buyers were also classified as either "large" (more than 2,000 pigs) and "small" (less than 2,000 pigs).

The total number of feeder pigs handled at each of the 18 separate sales locations in 1974 ranged from 910 to 129,144 head. In 1974, order and farmer buyers purchased 608,684 or 43 percent of the total Tennessee feeder pig crop through 442 organized feeder pig sales.

Total fuel cost for order buyers was the largest expense in transporting feeder pigs. Large order buyers paid an estimated $71,940.00 as compared to $12,366.72 for the small order buyers.

Total variable cost for the large order buyers was $162,140.06, compared to $33,998.15 for the small order buyers. Large order buyers incurred a total variable expense of 39.9 cents per pig while small order buyers had only 36.1 cents per pig variable cost.

Order buyers charged their clients $1.00 per mile (one way) and .50 cents per head for transporting the pigs from the Tennessee sale locations to the final destination. These charges also covered personal salaries and other fixed expenses of the order buyers.

The results of this study support the implications that order and farmer buyers are not purchasing feeder pigs under conditions of maximum efficiency at Tennessee feeder pig sales. The overall efficiency of the feeder pig marketing system could be improved by reducing the number of organized feeder pig sales and increasing the number of feeder pigs per sale.

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