Economic and Marketing Information
FOR INDIANA   FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana
April   30,   1963
the feeder pig boom in Indiana1
by Dennis Gaydon, Agricultural Economics
Since 1956, shipments of feeder
pigs into Indiana have increased from
162,000 to 843,000 (Table 1).
The spectacular increase in inship-
ments puts Indiana clearly ahead of
Illinois, and second only to Iowa as
a feeder pig importing state. In 1956,
Indiana farmers sold about 410,000
feeder pigs. If growth in volume at
southern Indiana feeder pig auctions
is any indication, Indiana production
has at least been maintained in recent years. This combination of home
grown and imported feeder pigs
means that some 20 percent of all
hogs marketed in Indiana in 1962
were purchased as feeder pigs. And,
nearly 60 percent of these purchased
pigs came from out of state.
States to the immediate south of
the corn belt are the major feeder pig
sources with Kentucky, Arkansas and
Missouri rapidly growing in importance (Table 2). Pigs listed as coming from other states include one or
two thousand head from such states
as Delaware, South Carolina, Texas
and Minnesota. This points up the
rather far flung nature of feeder pig
trading.
Table  1.   In shipment* of feeder pigs, by states,  1956-62
Implications for Indiana
Producers
Indiana feeder pig raisers have
little inherent price advantage over
competing imports. Transport costs
for feeder pigs are a small item on
a per head basis—about 10 cents per
head per 100 miles when shipped in
large lots. Indiana feeder pig raisers
should concentrate on meeting the
demands of buyers with respect to
physical and genetic quality and ease
and convenience of buying.
What do buyers think important
when purchasing feeder pigs? For
what will they pay a premium?
Weight is by far the most important determinant of feeder pig price.
For any one sale the cost of an additional pound of feeder pig is about
the same over the whole weight range
(40-120 lb.). The costs of each additional pound, however, varied markedly from sale to sale. In the high
priced sales in April, May and October a 60 pound pig cost only about
$1.20 more (12^ per lb.) than a 50
pound pig. In the relatively lower
priced sales this differential was closer to $1.70 per head (170 per lb.).
State
1956
1957
1958           1959
1960
1,000 head
Indiana
162
210
515              417
465
Illinois
168
148
255              270
131
Iowa
486
550
690               962
1235
Ohio
5
6
9                 26
135
1961
1962
6.');;
L45
780
192
843
275"
n/a
250"
a Estimates.
Table   2.   Inshipments   of  feeder  pigs
origin, by years 1957-62
into   Indiana,   by   states   of
Statt
1957
1958
1959
1960
Tennessee
Kentucky
Arkansas
Missouri
Wisconsin
Other States
Total
148,356
338,243
14,090
48,317
559
27,291
4,661
19,612
17,043
39,512
25,459
43,044
192,413
73,154
45,709
28,079
53,254
24,101
280,285
81,355
53,734
22,615
12,693
20,549
1961
1962
323,932
415,415
99,073
161.198
101,453
126,740
67,015
84.150
28,336
30,070
33,364
25,868
On a higher hog market the 40-65
pound pigs are bid up relative to tin-
price of those over 65 pounds. Certainly, costs of II to 12 cents per
pound for weight above 40 pounds
are close to many producers" costs of
production.
Color is apparent!) not a highl)
important factor. However, there were
indications that all other things equal
white pigs tended to realize somewhat
lower prices than the average. Similarly belts and black pigs tended to
realize a little more than the average.
Grade of feeder pigs tended to have
a greater effect on price than did
color. Grade affected prices significantly in half of the 14 sales. Where
grade affected price there was an
average differential between each of
the top four grades of 60 cents per
head. This differential applied particularly to pigs in the 40 to 80 pound
weight range.
Size of lot appeared to he important. Buyers apparently were willing
to pay a premium for larger lots of
uniform pigs. In the 14 sales at Osgood in 1962. on the average, as salt-
lot size increased by 10 pigs, buyers
were willing to pay an extra 22c per
head. As an example, w ith other
things equal, pigs sold in lots of 7(1
tended to realize about $1.10 more
per head than those sold in lots of 20.
The 873 lots analyzed ranged from
1 to 165 head. Only 50 of these lots
exceeded 100 pigs. There was no evidence that lot sizes between 100 to
165 were getting too big for buyers
—these lots, in fact, tended to earn
a very pronounced premium. Then-
was a distinct tendency for lar^c lots
of Grade 2 and even Grade 3 pigs to
command prices as high as. or even
210,168 515,019
416,710 471,231 653,173
843,441
1 Based on a study of the feeder pig industry in Indiana in 1962 under Project
No. 876, Auction data are from Osgood.
1959-1962.