MANURE VALUE, PRICING SYSTEMS, AND SWINE PRODUCTION DECISIONS

Haixiao Huang and Gay Y. Miller

No 22233, 2003 Annual meeting, July 27-30, Montreal, Canada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

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.

Keywords: Livestock; Production/Industries (search for similar items in EconPapers)
Pages: 21
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea03:22233

DOI: 10.22004/ag.econ.22233

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