Economic and Marketing Information                                                                                                                                                                                      FOR INDIANA  FARMERS          
April  30,   1960
Again Pay Best
Moderately Large Hog Enterprises
by R.  H.  BAUMAN  and  L.  EISGRUBER
Agricultural  Economics
ADDITIONAL evidence indicates that size of enterprise
is an important factor affecting
costs and returns in producing
hogs.1
Gains in production efficiencies
appear to be most rapid up to 30-
40 sows and then increase more
slowly up to 50-60 sows. Apparently, under present technologies,
it's very difficult even for the best
of managers to keep the hog business operating at peak levels of
performance much beyond the 50-
60 sow herd size.
While the total net returns from
the hog enterprise may continue
to increase in larger herds, it
seems safe to say that this comes,
in the main, from greater volume
rather than from lower unit costs
of production.
THESE FINDINGS are based
on a 1956-57, two-year study, of
130 central Indiana hog enterprises.- The herds ranged in size
from 5 to 120 sows all on a two-
litter basis. The data were adjusted to a corn-hog ratio of 13.6 to 1
(long-time Indiana average) with
corn at $1.21 per bushel and hogs
$16.50 per hundred, adjusted seasonally to more nearly reflect the
average situation. Labor was
charged at $1 per hour.
Average costs and returns were
calculated for seven, 10-sow interval, size groups. Various measures
'Progress report for the year 1956, first year
or the study of AES Project No. 787, was published in "Economic and Marketing Information
'"Indiana   Farmers,"   July   29,   1958.
"Includes 54 enterprises in 1956 and 76 en-
'srprises in 1957. Farms from which the data
*ere obtained are in Carroll, Clinton, Miami,
Montgomery and Tippecanoe  Counties.
of costs tended to go down with
increased size of enterprise up to
50 or 60 sows (Tables 1 and 2).
Beyond this size of enterprise, unit
costs tended to increase. However,
the number of cooperators with
larger herds was too small to give
much reliability to the results. At
least constant costs and returns do
seem possible in somewhat larger
herds though evidence from the
study is lacking to back this up
(Figures 1 and 2).
Small  Declines  in  All
Major Cost Items
Up to the 50-60 sow herd size
small decreases tended to occur in
all major cost categories—feed,
man labor, building use, equipment use and miscellaneous. After this, total costs increased. Difference in total costs between the
10-sow and the 60-sow herd size
amounted to about $2.20 per hundred or about $5 per hog marketed (Table 3).
Net returns per man hour increased from about $1 for the 10-
sow herds to about $4.50 per hour
Table   1.   Costs and Returns for Two-Litter Swine Enterprise by Number
Of Sows in  Herd, Central Indiana—Two Year  1956-57 Average.*
S
ze  of  Enterprise
10 sow
20 sow
30 sow
40 sow   50 sow
60 sow
Over
(5-1 A)
(15-24)
(25-34)
(35-44)   (45-54)
(55-64)
65
Avg.
Number   of   enterprises''
25
32
34
19             9
5
6
130
Avg. number of sows farrowe
d    10.9
20.3
29.6
40.1        50.3
60.1
97
30.2
Pigs   farrowed   per   litter
8.9
8.4
8.5
8.1          8.3
8.2
9.4
8.5
Pigs   weaned   per   litter
7.1
7.0
7.3
6.9         7.2
7.3
7.4
7.2
Pigs   raised   per   litter
6.8
6.7
7.1
6.5          6.9
7.0
6.9
6.8
Avg.  wt.   market  hogs  sold—Ibs.   216
214
217
221         215
218
217
217
Per  Enterprise
Net return to labor and  mgt.
$391
$1058
$2052
$3220    $4460
$4820
$7340
$2175
Net  return  to   management
25
485
1260
2285      3340
3410
5850
1380
Per   Sow   and   Two-Litters
Total receipts (incl.  inv. chang
e) $517
$ 468
$ 543
$ 503    $ 510
$ 474
$  499
$ 508
Total   costs   (incl.   labor)
514
442
501
446        444
418
449
472
Net    return
3
26
42
57           66
56
50
36
Per   Hundredweight   Hogs
Produced
Total receipts (incl. inv.
change)
$16.83
$16.43
$16.87
$16.77   $16.59
$16.70
$16.83
$16.72
Total   costs   (incl.   labor)
16.86
15.62
15.78
14.86      14.56
14.50
15.21
15.64
Net   return
-.03
.81
1.09
1.91        2.03
2.20
1.62
1.08
Uni
costs  and  returns
Net   return   per   man   hour
$    .98
$  1.36
$ 2.23
$ 3.20   $ 4.44
$ 2.62
$ 4.02
$ 2.19
Gross   return   per  $   feed   fed
1.55
1.69
1.61
1.67        1.74
1.77
1.57
1.64
Cost per weaned pig (incl.
labor)
10.57
7.92
8.58
7.40       5.93
6.17
7.24
8.29
Farms from  which  these  data  were  obtained  are  in  Carroll,  Clinton,  Miami,  Montgomery  and  Tippecanoe Counties.
54 enterprises in  1956; 76 in  1957.  Detailed  records were kept on  the  130 enterprises which  ranged
from 4 to 120 sows.