Economic and Marketing Information                                                                                                                                                                                          FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana      
May  31,   1961
Costs and Profits in Hog Production
by RONALD  H.  BAUMAN and  LUDWIG  M.  EISGRUBER,
Agricultural Economics
Low costs and high profits in
hog production are associated
with: O a herd-size of about 50
sows (two-litter system), Q a
high level of feed conversion, 
an increasing number of pigs
raised per litter, and © the purchase of feed in volume to get the
advantages of quantity discounts.
But, highly efficient operators
with relatively small hog enterprises have production costs per
hundredweight as low as most
larger producers. These are some
of the major conclusions reached
from a study of a selected group
of central Indiana farms.*
Production Costs per Hog
Lower for Larger Herds
Detailed records, kept in 1956
and 1957 by 118 central Indiana,
two-litter, swine producers,
showed that average cost of producing a hundred pounds of hogs
decreased as enterprise size increased to about 50 sows (Table
1). In herds larger than 50 sows
*Progress reports on this study, the AES Project 787, were published in this publication, July
29,  1958 and April 30,  1960.
costs per cwt. of hogs produced
tended to increase slowly.
The decrease in cost per cwt. of
hog produced—that is associated
with increasing size of enterprise
—is almost entirely attributable
to changes in costs for labor and
capital (use cost of buildings, machinery and equipment, and interest on investment in hogs). Labor cost particularly showed a
consistent decline as size of herd
increased.
When labor was charged at
$1.00   per   hour,   labor   cost   de-
Table 1. Average Cost per Hundred Pounds of Hogs Produced with Various Sizes of Swine Enterprise, Central Indiana, 1956 and 1957.
Cost per hundredweight of hogs produced when the size of the enterprise
Average
(in  number of sows farrowed  twice  per year)   is:
cost
Under
60 and
28
(percent of
Cost item
10
10-19             20-29             30-39              40-49             50-59             over
[average)
Total cost)
Avg.  no.   of  sows   farrowed
(2  litters   each) 8
No. of enterprises 9
Direct costs
Feed* 11.15
Miscellaneous  (electricity,
taxes, vaccination, etc.) .71
Total
11.86
Fixed costs
Use cost  of  buildings,
machinery and equipment    2.38
Interest on  avg.   investment  in   hogs   (6%)
Total
Total costs other
*han   labor
Labor cost  at   ($1.00
Per hr.)
Total
.41
2.79
14.65
1.29
15.94
15
29
10.71
.87
11.58
2.29
.45
2.74
14.32
1.10
15.42
25
33
10.82
.93
11.75
1.89
.44
2.33
14.08
1 04
15.12
34
22
10.01
.91
10.92
1.79
.43
2 22
13.14
.90
14.04
42
12
9.42
.88
10.30
1.52
.46
1.98
12.28
.76
13.04
53
9
9.46
.76
10.22
1.60
.43
2.03
12.25
.74
12.99
73
4
10.22
.96
11.18
1.63
.50
2.13
13.31
.69
14.10
28
118
10.40
.88
11.28
1.94
.44
2.38
13.66
98
14.64
71.0
6.0
77.0
13.3
3.0
16.3
93.3
6.3
100.0
*The corn price charged was $1.21  per bushel; supplement price charged was  S5   per  cwt.,   35   percent   protein   equivalent.   Cost   of   the   average
f*d was $2.55 per cwt.
ration