BULLETIN 240 FEBRUARY, 1934 Factors Affecting Costs of Producing Pork In Southeast Alabama By JAMES D. POPE and HENRY T. WINGATE AGRICULTURAL EXPERIMENT STATION OF THE ALABAMA POLYTECHNIC INSTITUTE IN CO-OPERATION WITH UNITED STATES DEPARTMENT OF AGRICULTURE BUREAU OF AGRICULTURAL ECONOMICS M. J. FUNCHESS, Director AUBURN, ALABAMA AGRICULTURAL EXPERIMENT STATION STAFF Administrative Committee John Jeitkins, Wilmore, l.M.E.. M.E., LL.D. Btollin~g Hall Crenshaw, M.E., LL.D. Lather Noble Duncan, M.S.. LL.D. M. J. Ftunchess, M.S.. D~irectoir iof Experiment Station W. IL. Weilunbtach, It.S., Exieiutive Secetalry P. 0. D)a1vis. ItS., Agriu tltura EdIitior nl MaIry E. Maurtin, Lib~rariain Sara Willeford, B.S., Agricultlurail Librairian Headi P rofess or of A gri lily Proifes.sor of Soil 'h i itry Associaite Priofiesiir of Soil Chem istry Assistant P'rofes.sor if Soil Chemistry Assistant Priifessor of Siiil (healistry ------_ _ Assistat. Sioil Cheisit. ----_Associate Priofessor of Plant Btreeiing ---- Associae P. rofessohr of Atrionomy __ Assistaiit Profess.or of Agronomiiy ______Assisttint P'rofiessor iif Agrioiiiy --------Assistant P'rofiesor of Astrioomy _------Asitant in Agtriiooy Assistant in Agrionimy .___________________. A.sistant in A gtrono.m y .--- ______ _______ Assistant in Agroniuofy ._--__Assist ant is Agriiii.iiy --------------------. C radiuate A ssistan Agronomy and Soils: M. J. Finoehes, M.S., J. W. Tidmoire, Ph.D. Aitnna L. Sommfler, l'h.D.__ G. 1). Scar eth, B3.S. J1. A. Naftel, M.S., Ph.D.R. E. Yodler, Ph.D. It. IB. Tisdale, M.S. J. T. Williamson, B1.S. R. Y. D. li. Bailey, B.S. G. Stuorkie, Ph.D._ F. L.. Dlavis, M.A. *-G. F. .str. I.S. E. Btertram, 1B.S. J. W. Richardson, R.S. J. R. Taylor, B.S. E. C. Richardson, 1B.S. Animal Husbandry, Dairying an d Poultry: . C. Crimes. M. S. Read Professor if Animail Hiishandry, Daiirying and Poutltry W. I). Salmon. M.A. Resiarch Priifisiir of Animal Nultritioni G. A. Schrader. Ph.D. A..sociate Prolfessor of Aiimal Nutritioin C. 0. Prickett, Bl.A. Assiciaite Proufessolr iof Animail Nutitiion G. A. Trollo~pc, T.S. Priofes. or of Poullltry Husbanduliry 1). F. King, M.S. Assistant P'rofesso r iif Pounltry Huii biaiiiry W. E. Sewell, M.S..-Assis.taiit Priifis or if Animaul liililliltlry C..1. itt ier, M.A._____ Asistant, in Aiimal Iliuulloldry . G. Giodmain, 11.5._-Graduate Assistant in Aitimal Nuriton Botany and Plant Pathology: J1. 1. Seal. PhD. _ ____.Head Priifessiir of Btan~ly iati Plant P'at hololgy C. L.. lick. M.S. Assistaiit Professor of Boitanly :li(1'1Plait Pa.tholoigy E. V. Smith. M.S.. Asistant in Btany and Plaint Paotholoigy Agricultural Economics: .1. D. Pope. M.S. Head Professor of Agricultural E coniomics It. F. Ala ortl M.S. Associate Professor iif Agricuilturail Ec.ionoics E. H. Mereness, Ph.D. _Associaitie Priofessolr iif Atgricutu lrlal Ecoinoicle -- C M. Clark. M.S. -_--Assistaiit Priufessor of Agricultiurael Ecoomics Edit h May Slights __________________.Statistical Assistant Agricultural Engineering: M. tL. Nichols, M.S.____ _______-I_ iad Profes'sor iif Agricultutral Engiiteeriitg Argiellltlirll Engitiier t(Coop U. S. D. A.)I J1. W. Randolph. M.S. i. A. Carns. M.S. ___Assistant Priifessor of Agriciultttral Enuginiiering N W. Wilson, 1B.S. Assistant P'rofessor o~f AgrictultuIral Enlgiileing Assistant in Agrictultulrail Engineering ( Ciiip. U. S. 1t. A.) E. C. 1)ieker. B.S. Assistant in Agrictilttural Engiineeriing (Coolp. U. S. I). A.) I. F. Ried, M.S. Entomology: J. M. Rbisoun. M.A. - _ l-eadl Profes sir oif Ent omlology andI Z l lgy It. S. Swingle, M.S. As sociati IProifiessor of Entomo111logy L.. L.. English. Ph.D. ----------------Associate Professor iif Eiitiology F. S. Araint, M.S. _____.__________. _ Assistant, Professor of Eiitollililigy Special Investigations: .t. F. Duiggar, M.S. ----_________________Research Professiir of Speciail Investigaltios Horticulture and Forestry: L.. M. Ware. M.S. ___ eadl Professor of Holrticul~ture and Folrest ry Professor of Ho~rticuliure aind Folrest ry 0. C. Miilloch, M.S.----*-R. W. Taylor, M.S.__---Suhstations: Fred Stewvart, B.S. R. C. Christopher, B.S. . P. Wilson. B.S. K. C. Baiker, B.S. ____ C. L. McIntyre, P.S..._Otto Blrown, M.S. Harolid Yates, B.S. - -As sisitanIt Priofesasor o~f Ho lrticul tusri anid Forestry ______Assistant Professor iuf Hiirtctulttire and Fo~rest ry ------Supt. -------. Tennessee Valley Sublstation, Blelle, Miitti Stutt. Wiregras toI Btlack Blt Substatilln, Subsitationi hllandiil S lteriit Ali. Alui. Assisanit indenit Sutit Gulf Coast Sublstatioii, and Industries. Fllir-hliti Ala. -Assigniid by the State Department of Agricuiltutri *5On leavse. Staff as iofJanuary, 1934. Factors Affecting Costs of Producing Pork In Southeast Alabama By JAMES D. POPE, Agricultural Economist Alabama Experiment Station and HENRY T. WINGATE, Field Agent Bureau of Agricultural Economics United States Department of Agriculture BULLETIN 240 FEBRUARY, 1934 Contents INTRODUCTION -3 SYSTEM OF HOG PRODUCTION IN SOUTHEAST ALABAMA-4 COSTS OF PRODUCTION AND RETURNS-4 Methods of Calculating Costs and Income-4 Summary of Costs and Returns-----------------6 Distribution of Costs -------------------------- 7 Variations in Costs --------------------------- 8 Cost of Producing Pork on Waste Peanuts----------8 Cost of Producing Pork on Interplanted Peanuts---9 THE EFFECT OF EARLY FINISHING CROPS ON COSTS----9 RELATION OF YIELD PER ACRE TO COSTS-----------------11 RELATION OF FEED PER UNIT OF GAIN TO COSTS--------11 ADJUSTMENT OF HOGS TO FEED SUPPLY------------------13 COMBINED EFFECT OF ACRE-YIELDS AND FEEDING EFFICIENCY ON COSTS---------------------------------------17 SUMMARY ------------------------------------------------------------- 17 Factors Affecting Costs of Producing Pork In Southeast Alabama HE PRODUCTION of pork, in excess of requirements for home use, has assumed relatively greater importance in Southeast Alabama than in any other part of the State. In six leading counties of that area there were in 1930, according to the Federal census, an average of 9 hogs per farm as compared with 3 hogs per farm in the remainder of the State. The hog industry in this section is closely associated with the peanut crop which, after the spread of the boll weevil, was substituted for cotton on many acres. Hogs constitute about 10 per cent of the gross cash farm income in Southeast Alabama as compared with 3 per cent for the State as a whole. On the farms included in this study, hogs constituted about 14 per cent of the gross cash income and other LR the following percentages: cotton and cottonseed, 50 per cent; peanuts, 14 per cent; other crops, 12 per cent; other livestock, 10 per cent. foAlthough hog production on most farms in Alabama is a SuSoutheast by-product and a side-line to the major farming operations, many farmers interested in increasing both the size and profAE itableness of the enterprise. In order to deterSOCK mine the most important CLK factors associated with the success of the hog enterprise in Southeast AlaWproducts P~RRYare R80R , "E ES T M° / bama and Southwest Geor. .VAgia a study was begun in 1927 in co-operation with the Bureau of Agricultural Economics of the United States Department of Agriculture and the Georgia State College of Agriculture. The area in Alarefers in shown in Fig. 1. bama to which the study MOBLE °AL ALABAMA ALAoA FIGURE 1.-The shaded area indicates the hog-peanut area of Alaincluded in this study were bama, in which the farms located, SYSTEM OF HOG PRODUCTION IN SOUTHEAST ALABAMA In the area studied, hogs as a commercial enterprise are used: (1) To furnish a medium for marketing peanuts interplanted in corn. About 40 per cent of the corn acreage is interplanted with peanuts and most of these peanuts are hogged-off after the corn has been harvested. This is the most important source of pork produced in the area. (2) To furnish a medium for marketing a portion of the solid peanut acreage. On the average, according to crop reports, about one-fifth of the solid peanut acreage is hogged-off, the other four-fifths being dug and sold. This proportion varies from year to year and from farm to farm. (3) To clean up the waste, after the peanuts have been harvested. Often as many as 10 per cent of the peanuts are left in the ground after harvest and the only practicable way to recover these is through hogs. The system of producing pork in Southeast Alabama consists essentially of fattening the hogs on runner peanuts from about September 15 to about February 15, or March 1, and maintaining the herd on permanent pasture and hand-fed supplements for the remainder of the year. Ninety per cent of the hand-fed feeds, according to value, is produced on the farm. In addition to corn, some velvet beans and sweet potatoes are often fed by hand. This system has certain variations, the most important of which consists in extending the fattening period so that it begins in July and August on Spanish peanuts, early corn, cowpeas, soybeans, or other early maturing crops, or combinations of crops. Another variation is to provide green grazing of oats and rye in early spring. No definite system of seasonal distribution of farrowings is generally followed, and uncontrolled breeding is the rule. A peak of farrowings comes in January and February, nearly onefourth of the total number of pigs each year being farrowed in these two months. The seasonal trend of farrowings on the farms in this study is shown graphically in Figure 2. The system of marketing followed seems to be to put the hogs on the market when they reach approximately the number one size, the minimum weight of which is 165 pounds. Many hogs are sold at less than this weight when feed crops for grazing have been exhausted. The weight of all hogs sold in both years on the farms included in the present study averaged about 172 pounds. COSTS OF PRODUCTION AND RETURNS Methods of Calculating Costs and Income.-The total amount of pork produced on each farm from April 1, 1927 to March 31, 1928, and for the same period for 1928-29 was computed by de- 5 100 Ave LeAG /Go 120 Go IL V __S __ V AlJG. QvL. oV.O0C-3A 'j 'r1 . FIGURE 2.-Seasonal trend of farrowings on farms in this study. Solid line, 1927-28; dotted line, 1928-29. termining the difference between (1) the total weight of the herd on April 1 plus the weight of hogs purchased, and (2) the weight of hogs which died, those butchered, those sold, and those on hand March 31. This figure represents the total net increase in weight in the herd for the year, and is referred to in this report as total gain. The marketable gain was determined by deducting from the total gain that portion of the gain which was made by hogs which died during the year. Costs of production were calculated by charging the handfed feeds grown on the farm at their market value, those purchased at their cost, and hogged-off feeds at the cost of producing such feed. In calculating costs of producing feed, land was charged at the rate estimated by the farmer as the customary rental rate for land of similar grade in the community. Man and mule labor was charged at current rates, which were approximately 121/2 cents and 10 cents per hour, respectively. Machinery was charged at three cents per hour for each hour of mule labor involved. Seed and fertilizer were charged at their market value or cost. No charge was made either for peanuts left in the ground after harvest and salvaged by the hogs, or for interest on investment in hogs, the latter item being difficult to determine accurately and of minor significance in costs. Income per pound of net increase in the hog herd for the year was arrived at by dividing the total number of pounds of net increase, calculated as described above, into the total value of the net increase. The latter value was arrived at by adding together the inventory value of the herd at the beginning of the year and the value of hogs purchased during the year, and subtracting the total from the value of hogs butchered, sold, and on hand at the end of the year. Income per pound, therefore, is not exactly synonymous with selling price per pound, since the former takes into account the total value of marketable pork produced, all of which was not sold. Net return per acre of land is used as one measure of success of the hog enterprise. In the case of peanuts interplanted in corn the amount of land used for hog grazing is considered to be that part of the land occupied by the peanuts. For example, if an acre of land were planted to corn and peanuts in alternate rows, and only the peanuts were hogged-off, which is the usual practice, it would be considered that the pork was produced on one-half acre. The yield per acre of peanuts planted solid included in this study was 30.3 bushels per acre. On fields in which the peanuts were interplanted in alternate rows, the yield per acre of peanuts, when assumed to occupy the proportion of land indicated above, was 29.7 bushels per acre. If, however, the peanuts were considered to occupy the entire land area used by the corn-peanut combination, the average yield was 14.8 bushels per acre. As used in this study, the net return per acre of crop land used for grazing hogs (including interplanted peanuts converted to an equivalent solid basis as indicated above) represents what is left after costs of labor and other direct expenses incurred in connection with the hog enterprise are deducted from the value of the net increase. This return to land is the net amount available for interest on investment in land, including permanent improvements, and for depreciation and taxes. Summary of Costs and Returns.-As a two-year average the total amount of pork produced was 311 pounds per acre, of which 300 pounds was marketable, and 11 pounds was gain on hogs that died during the year. It cost an average of $6.73 to produce 100 pounds of marketable pork for which an income of $7.06 was received. The cost of producing marketable pork was $6.24 in 1927-28 and $7.22 in 1928-29. The two-year average net return per acre of land was $5.70 (Table 1). TABLE 1.-Cost and Income per Hundredweight of Pork Produced, Pounds of Pork Produced per Acre, and Net Return per acre of Land, 179 Farms, 1927-28 and 1928-29. Number Cost per 100 pounds of Income per 100 Pounds of pork produced per pounds of Net re- Year 1927-28 1928-29 gain FrsMreakTtal Fam able $6.24 $5.99 99 of 50 7.22 7.02 turn per acre gain o Marketand Marketln Total oetT able Total able $6.06 346 360 $6.35 $6.62 7.50 7.30 255 262 5.35 Two-Year Average 179 $6.73 $6.50 $7.06 $6.82 300 311 $5.70 Distribution of Costs.-Feed was by far the largest single item of cost on the farms studied and accounted for 90 per cent of the total cost of production. The labor of caring for the herd and marketing the hogs amounted to 8.3 per cent, and miscellaneous costs, mostly veterinary expense, amounted to about 2 per cent of the total costs (Table 2). TABLE 2.-Distribution of Costs of Producing Pork, Two-Year Average, 1927-28 and 1928-29. Two-year average cost per Per cent of pound of total cost per Marketable Total gain pound of total gain (cents) gain (cents) 1.4 0.3 0.1 0.1 3.7 0.4 0.6 0.1 1.3 0.3 0.1 0.1 3.6 0.4 0.5 0.2 6.5 20.5 4.4 1.0 1.6 0.5 55.5 6.0 8.3 2.2 100.0 Item Farm-grown feed fed by hand Purchased feed fed by hand Permanent pasture Grazing crops Soiling crops Peanuts Other finishing crops Labor Veterinary and miscellaneous Total I 6.7 Peanuts hogged-off constituted the single most important item in feed costs amounting to about 55 per cent of total costs. Hand-fed feeds grown on the farm amounted to 20.5 per cent, and purchased h-fehand-fed feeds 4.4 per cent of total costs. The distribution of costs of producing peanuts is indicated in Table 3. The total cost was 1.67 cents per pound, of which 0.64 cents or 38 per cent was the charge for the use of land. Man and mule labor together amounted to 42 per cent of total costs and the use of machinery, seed, and fertilizer accounted for the remaining 20 per cent. TABLE 3.-Distribution of Costs of Producing Runner Peanuts for Hog Grazing, Two-Year Average, 1927-28 and 1928-29 Cost Item Cents 0.37 2.74 Man labor 0.33 2.39 Mule labor 0.05 0.37 Fertilizer 1.31 0.18 Seed 0.10 0.72 Machinery 0.64 4.64 Land rent 1.67 12.17 Total i ~LL~lt:c). Lilt-5 ~~~L~~tl L~~~L, VVdr~ I.U1 Lt;11~~3Mt;l Per acre Dollars Per pound Per cent of total cost 22 20 3 11 6 38 100 8 Variations in Costs.-Wide variations in costs of producing pork existed among the farms studied, as is indicated in Table 4. Ignoring a few extremes of highest and lowest costs, which were exceptional cases, there was a range of costs during the two years on most of the farms from $3.00 to $9.00 per hundred pounds of pork produced. Costs were higher in 1928-29 than in 1927-28, indicating that average costs may vary from one season to another as well as from farm to farm. TABLE 4.-Number of Farms Having Specified Costs of Producing Pork, 1927-28 and 1928-29. Cost per 100 pounds of marketable gain Dollars 1.001.99 2.002.99 3.003.99 4.004.99 5.005.99 6.006.99 7.007.99 8.00- 8.99 9.009.99 10.00-10.99 11.00-11.99 12.00-12.9913.00 and more Total Number of farms 1927-28 1928-29 12_ 83 15 19 18 17 5 5 4 1 4 99 3 16 16 13 13 6 4 1 4 1 80 The costs reported in this study were calculated on the basis of 1927-28 and 1928-29 prices for land rent, labor, feeds, and other costs. Since at the beginning of 1933, land rents, labor rates, and feed costs had declined by at least half from the levels which prevailed during the years to which this study refers, costs of production on the basis of early 1933 prices would be around one-half of the figures given, or between three and four cents per pound. However, the relationships discussed below between certain factors and profits from the hog enterprise would hold true at any set of prices, provided the various cost items remained in approximately the same ratio as prevailed from 1927 to 1929. Cost of Producing Pork on Waste Peanuts.-Many farms which grow peanuts for direct sale, fatten a few hogs each year on the waste salvaged after harvest. These farms are not typical of the farms included in this study, the latter representing farms on which the hog enterprise was above average in size and on which comparatively large acreages of peanuts were hogged-off. Data were obtatined on two farms in 1927-28 and six farms in 1928-29 on which the hogs were fattened entirely on waste peanuts, these farms not being included in the tables presented in this report. The costs on these farms were $1.15 and $3.46 per hundred pounds of total gain in 1927-28 and 1928-29 respectively. In calculating these costs no charge was made for the waste peanuts consumed by the hogs. Without hogs, the waste peanuts would have been entirely valueless. This method of fattening hogs, though very economical, is, of course, limited to the amount of available peanut waste on the farm. Cost of Producing Pork on Interplanted Peanuts.-On 13 farms in 1927-28 and 12 farms in 1928-29, the hogs were fattened entirely on interplanted peanuts. From the farmer's point of view the interplanted peanuts are grown as a secondary crop in connection with corn, since the corn would be grown whether accompanied by peanuts or not. From this standpoint corn should bear the entire charge for the use of land and peanuts charged only the additional costs incurred in connection with that crop. These additional costs are the peanut seed, fertilizer applied directly to the peanuts, and the labor, if any, of hoeing the peanuts. In the tables presented in this study, costs of interplanted peanuts were calculated on the basis of charging the peanuts with one-half the land rent where they occupied onehalf of the land, and likewise their proportionate share of other costs of production of the combined corn-peanut crop. On this basis, the two-year average cost on the 13 farms in 1927-28 and the 12 farms in 1928-29 referred to above was $6.72 per hundredweight of marketable gain. When, however, the interplanted peanuts are charged with only the small additional costs involved in their production, which is in line with the farmer's point of view, the cost of producing pork is reduced to $3.52 per hundredweight. These data indicate that the use of interplanted peanuts is a very economical method of fattening hogs when considered a by-product of corn production. As stated above, most of the pork in Southeast Alabama is produced by this method, but on farms where it is used as the sole method, the hog enterprise is limited in accordance with the corn acreage which may be interplanted with peanuts. THE EFFECT OF EARLY FINISHING CROPS ON COSTS One of the purposes of the study was to compare the costs of production with different cropping and hog-grazing systems used in the area. When this study was begun it was thought that a significant relationship might exist between the use of early finishing crops and low costs of production. It was believed that the use of such crops in addition to the main crop of runner peanuts would bring about a substantial and profitable reduction in hand-fed feed requirements. Several farms which were using early fin- 10 ishing crops were included in the study. However, a comparison of this group of farms with those which used only runner peanuts indicated very little difference between the two groups in costs of production. As an average of 1927-28 and 1928-29, those farms which used early finishing crops, in addition to the main crop of runner peanuts, produced pork at a cost of 10 cents per hundredweight of marketable gain more than those which did not include such crops. The former group received a net return for use of land of 18 cents less and produced somewhat less pork per acre than the latter group. These differences are not significant (Table 5). TABLE 5.-Compiarative Costs of Pork Production with Late Finishing Crops and with Early and Late Finishing Crops, 1927-28 and 1928-29. Crops used in hog grazing Late finishing Early and late crops only finishing crops 57 100 236 53 0 120 409 332 321 $7.00 6.68 0.32 5.82 218 75 36 95 424 296 284 $7.12 6.78 0.34 5.64 33 Item Average number of farms: Pounds of feed disappearing per pounds marketable gain: Peanuts hogged Other late finishing crops hogged Early finishing crops hogged Hand-fed feeds TOTAL FEED Pounds of total pork produced per acre Pounds of marketable pork produced per acre Income per 100 pounds marketable gain Cost per 100 pounds marketable gain Profit per 100 pounds marketable gain Net returns to land per acre In Table 5 is indicated the pounds of concentrated feeds which disappeared per hundredweight of gain on the farms on which the hogs were fattened on only runner peanuts and other late finishing crops, and on the farms on which early finishing crops were included. The term "disappeared" is used here since apparently in many instances the hogs did not eat all the feed but some of it was wasted or plowed back into the ground. In both groups of farms peanuts constituted 74 per cent by weight of the grazed feeds used; the digestible nutrients consumed by the hogs on both groups of farms were therefore derived preponderantly from peanuts. As an average for the two years, the group of farms using early finishing crops fed about 20 per cent less of hand-fed feeds than the group not having such crops. However, the former group used 4 per cent more of all feeds or 424 pounds per hun- 11 dredweight of gain as compared with 409 pounds used by the latter group. It appears that although the use of early finishing crops resulted in a material reduction in the quantity of hand-fed feeds required to produce a given amount of pork, the use of such crops did not reduce materially the costs of production. The data indicate that green crops may be substituted for a large part of the hand-fed feeds required, but the cost remains about the same. In other words, the cost of early finishing crops amounted to about as much as the value of the hand-fed feeds thereby displaced. RELATION OF YIELD PER ACRE TO COSTS The crops grazed by the hogs were charged against the cost of producing pork at the cost of producing those crops. When other things are equal, the higher the yield per acre of such crops the lower the unit cost of the grazed feed. Peanuts was the most important crop grazed and the relationship of yield per acre of peanuts to the cost per pound is shown in Figure 3. Since grazed feeds formed such an important part of cost of production in the area, it would be expected that the cost of producing pork would be materially influenced by the yield per acre of grazed feed crops. That such a relationship exists is indicated in Table 6. As the yield per acre of grazed feed increased the pounds of pork produced per acre increased, the cost of production decreased, and the net return per acre of land increased. It is significant, therefore, that the yield per acre of peanuts has a vital relationship to costs of producing pork in Southeast Alabama. per Cents lb. RELATION OF FEED PER UNIT OF GAIN TO COSTS 3.0 Although the yield per 2.0 acre of grazed feed and pounds of pork per acre were important factors related to costs, they were not the sole determinants of the cost. Another factor, namely, the 1.0 30 Yield per acre, 40 amount of feed which disappeared per 100 pounds of gain was FIGURE exert considerable influence 3.-Relation of yield per on cost of gain. In other trner tound ouf pea-words, not only the cost of producing feed, but also the nuts. bushels examined and found to TABLE 6.-Relation of the Yield per Acre of Finishing Crops to the Cost of Producing Pork and Other Factors, 1927-28 and 1928-29. Yield per acre of finishing crops (pounds) Number of farms Average Marketable Average yield yield pork proof all finish- peanuts of per duced per ing crops per acre acre acre (pounds) (pounds) (pounds) Number of hogs on hand Per 100 pounds of Net returns to land per acre marketable gain Income I Cost tember Sep1 per acre I\ rTrr~nrrmrr 1927-28 800-1199 1200 and more All f arms 0- 799 27 50 22 652 957 1615 998 594 832 1047 806 285 330 477 346 1928-29 1.7 2.1 2.7 2.1 $3.06 6.46 9.34 $6.06 $6.95 6.82 5.96 $6.62 $7.63 6.21 5.07 $6.24 99 700-1099 1100 and more All farms rr nI 0- 699 26 35 19 80 532 886 1287 842 I I 494 726 1125 730 213 271 300 255 1.4 1.9 1.8 1.7 $3.86 4.72 8.89 $5.35 $7.47 7.35 7.75 $7.50 $7.63 7.38 6.48 $7.22 ~ h 13 efficiency with which it was utilized by the hogs and converted into pork affects the cost of producing pork. The quantity of grazed feeds disappearing per 100 pounds of gain showed a wide range, varying from about 200 pounds to about 700 pounds. The data in Table 7 indicate the relationship of pounds of feed disappearing per 100 pounds of gain to cost of production. The relationship is marked. In both years an increase of 100 pounds of feed disappearing per 100 pounds of gain was associated with an increase of about one cent per pound in cost of producing pork. It is also interesting to note (Table 7) that on the farms on which the larger quantities of feed disappeared per 100 pounds of gain, and which had the higher costs, there was a tendency for yields of finishing crops per acre to be higher. The higher yields were associated with lower unit costs of feed; but the benefit of cheaper feed on the higher yielding acres was partially lost by less efficient use of the feed. ADJUSTMENT OF HOGS TO FEED SUPPLY The question arises, why did some farmers use the feed grazed by hogs so much more efficiently than other farmers? Apparently a hog would make about the same response to the same feed, other things equal, on one farm as on another. But the hogs did not gain equally on all farms and the problem is to find the causes of this inequality. If all the feed available for hog grazing on a given area of land is to be converted into pork there must be an adequate number of hogs on the field for a sufficient number of days to fully utilize the feed. It is not possible, of course, to forecast accurately the yield of a field sufficiently far in advance to be able to raise the required number of pigs to use the feed efficiently. A partial adjustment may be made by finishing the hogs to a heavier weight, but this type of adjustment will not fully take care of the fluctuations in peanut yields. The problem exists, therefore, of having on hand the proper number of hogs to use efficiently the grazed feed available. In some cases farmers buy hogs if they have a surplus of feed, but many of them simply turn into the fields the hogs they have on hand at the time. Although there was a tendency for farmers with the heavier-yielding acres to have on hand at the beginning of the fattening period more hogs per acre than those with lower-yielding acres, the former did not have on hand enough more hogs to use efficiently the larger quantity of feed. The data in Table 8 indicate that the number of head of hogs on hand September 1 per 1,000 pounds of grazed feed is related to the amount of feed disappearing per 100 pounds of gain and therefore to cost of production. Many farms lost a on Hogs to the Yield TABLE 7.-Relation of the Pounds of all Feed Disappearing per 100 Pounds of Total per Acre of All Finishing Crops and to the Income and Cost per 100 Pounds of 1927-28 and 1928-29. Gain Gain, Pounds of feed disappearing per 100 pounds of total gain i Number of farms Average number of Average yield of pounds of all feed all finishing crops disappearing per 100 per acre pounds of total gain (pounds) I. Income per 100 pounds marketable gain Cost per 100 pounds of gain Marketable Total 1927-28 0-299 300-399 400 and more All farms 27 36 36 99 243 344 524 383 894 876 1129 998 1928-29 0-299 300-399 400 and more All farms 16 25 39 80 252 340 549 421 584 735 971 842 $7.95 7.30 7.45 $7.50 $6.00 6.85 7.98 $7.22 $5.86 6.67 7.76 $7.02 $6.63 6.92 6.34 $6.62 $4.52 6.50 7.26 $6.24 $4.37 6.08 7.08 $5.99 15 large part of the benefit from larger than average yields per acre by not having enough hogs or by not keeping them on the peanuts long enough, or both, to utilize efficiently the feed available. Although the average weight of hogs sold was lighter in the groups having the larger number of hogs in relation to the feed supply, the income per hundredweight of marketable gain was not materially reduced. TABLE 8.-Relation of Number of Hogs on Hand September 1 per 1,000 Pounds of Grazed Feed to Pounds of Grazed Feed Disappearing per 100 Pounds of Total Gain and other Factors, 1927-28 and 1928-29. Average Average Average number of hogs on Hogs on hand September 1 Number hand Septemper 1,000 pounds of ber 1 per weight oweight of grazed feed farms 1,000 pounds of grazed feed 1.5 2.5 4.3 2.1 1.3 2.6 4.5 2.0 ohog sold 1927-28 181 176 144 173 1928-29 174 172 161 172 Pounds of grazed feed dspernpe10 of gain pudofoiogs pounds total Peanuts 229 182 120 193 322 212 132 246 Total 1.9 and less 2.0-3.4 3.5 and more All farms 1.9 and less 2.0 3.4 3.5 and more All farms 36 45 18 99 32 35 13 80 357 230 169 277 423 278 165 321 r Another measure of the degree of adjustment between hogs and feed supply is the number of hog grazing days provided for a given amount of feed available for grazing. This measure may be expressed as the pounds of grazed feed available per grazing day. The relationship of pounds of grazed feed available per hog grazing day to the pounds of grazed feed disappearing per 100 pounds of total gain is indicated in Table 9. It will be noted that as the pounds of grazed feeds available per hog grazing day on finishing crops increased the pounds of feed disappearing per 100 pounds of gain increased. In all groups peanuts were in about the same proportion to other feeds, and amounted to about 74 per cent by weight of the total grazed feeds available. Thus the group having the largest amount of grazed feed available per grazing day used nearly twice as much feed in 1927-28, and more than twice as much in 1928-29 to make 100 pounds of gain as the group having the smallest amount of grazed feed available. The daily gain per hog in the group using the largest average quantity of feed was 0.9 pounds as compared with 0.7 pounds in the group using the smallest 16 TABLE 9.-Relation of Pounds of Grazed Feed Available per Grazing Day to the Pounds of Grazed Feed Disappearing per 100 Pounds of Total Gain and Income and Cost per 100 Pounds of Marketable Gain, 1927-28 and 1928-29. Pounds available of grazed Number feed available of per grazing day farms Average pounds of grazed feed available per grazing day Pounds of grazed feed disappearing per 100 pounds of total pork produced Peanuts Total 1927-28 1.9 and less 2.0--2.9 3.0 and more All farms 2.4 and less 2.5-3.9 4.0 and more All farms 24 39 35 98* 17 32 31 1.6 2.5 4.0 2.7 1.7 3.1 5.4 157 191 220 194 1928-29 162 221 318 197 304 407 190 257 358 277 321 246 3.4 80 *One farm used in other tables is omitted from this table because of inadequate data on hog grazing days. The use of the average quantity of grazed feeds per day. larger quantities of feed resulted in a slightly larger rate of daily gain but not enough larger to offset the much larger quantities of feed used in relation to the gain obtained. The farms on which the larger quantities of feed disappeared did not have enough hogs on the fields for a sufficient number of days to use the feed to as good advantage as the farms using the smaller quantities of feed. Many farmers seemed to have as an objective the finishing to a marketable weight the hogs they happened to have on hand at the beginning of the fattening period instead of planning to have the proper number of hogs needed to convert into pork the total supply of feeds available for hogging-off. This lack of adjustment between hogs and the quantity of feeds available for grazing is typical of the general attitude of many farmers toward the hog enterprise in Southeast Alabama. Hogs are considered by many an incidental by-product, the revenue obtained from this source being regarded as mostly clear gain. This lack of adjustment of hogs to feed, however, is a problem inherent in the system of fattening hogs on peanuts. The adjustment cannot be made by holding the feed until hogs can be raised to use it, as in the case of corn-hog production. Those farms which had the lowest costs and largest profits not only had better than average yields per acre of feed crops, but had on hand an adequate number of hogs to more efficiently and economically use the available feeds. Whether this better adjustment of hogs to feed on some farms was predetermined or accidental is not clear from a study of the records, nevertheless it proved profitable. 17 COMBINED EFFECT OF ACRE-YIELDS AND FEEDING EFFICIENCY ON COSTS The available data indicate that both yield per acre and the economical use of feed through adjustment of hogs to feed supply are outstanding factors influencing costs of production in Southeast Alabama. The higher yields per acre are associated with low costs per unit of feed produced for hog grazing; provision for enough hogs for a sufficient length of time to utilize the available feed to the best advantage is associated with the efficiency with which the feed is used. Low efficiency in one factor may offset high efficiency in the other. Those farms which were above average in both of them had the lowest costs of production. For example, in 1927-28 the farms which were above average in number of hogs per 1,000 pounds of grazed feed and in yield per acre produced pork at $4.53 per hundredweight of marketable gain in 1927-28 and $6.45 in 1928-29, while those farms which were below average in both these factors had a cost of $7.73 and $8.22, respectively (Table 10). SUMMARY Hog production in Southeast Alabama is based largely on peanuts, which when hogged-off are a relatively cheap method of fattening hogs. A large part of the pork produced in Southeast Alabama is finished on interplanted peanuts which may be regarded as a by-product of corn production. The area, however, is one of high costs of maintaining the herds and raising the pigs between peanut crops. The general system of hog production followed in the area consists of fattening the hogs on runner peanuts during the fall and winter months and maintaining the herd on permanent pasture and hand-fed feeds, consisting mostly of corn, for the remainder of the year. On some farms early maturing crops such as Spanish peanuts are used, thereby extending the length of the fattening period. Ninety per cent of the cost of producing pork on the farms studied was feed cost, of which 23 per cent consisted of homegrown feed fed by hand, 5 per cent of purchased feed fed by hand, and 62 per cent peanuts grazed. The most important single item of the total feed cost was the cost of producing runner peanuts for hog grazing. The two-year average cost of producing runner peanuts planted solid was $12.17 per acre or $1.67 per hundredweight. Costs of producing pork varied widely as between different farms, ranging from $3.00 to $9.00 per hundredweight of total gain on the majority of the farms. TABLE 10.-Relation of Number of Hogs on Hand September 1, and the Yield per Acre of Grazed Feed to the Cost and Income per 100 Pounds of Marketable Gain and the Net Returns per Acre, 1927-28 and 1928-29. Above average yield per acre of grazed I feed Hogs on hand Sep tember 1 per 1,000 pounds of Number of grazed feed farms Below average yield per acre of grazed feed Per 100 poun ds of marketable gain Income Cost Net returns to la nd per a cre Number of farms Per 100 pounds of marketable gain Income Cost Net returns to land per acre 1927-28 Above average Below average .57 .93 37 18 $6.86 7.20 $6.39 7.73 $6.19 3.50 1928-29 Above average Below average $10 ).95 6 .67 34 7 $7.16 8.02 $7.57 8.22 $3.26 4.30 19 The two-year average cost of producing 100 pounds of marketable and total gain was $6.73 and $6.50, respectively; income was $7.06 and $6.82 respectively. Pork produced per acre was 300 and 311 pounds for marketable and total gain, respectively. Net return per acre of land used for hog grazing averaged $5.70, the interplanted peanut acreage being reduced to a solid acre basis. Costs and returns on the group of farms which fattened the hogs in fall and winter and those which began the fattening period in the latter half of the summer on early maturing finishing crops, principally Spanish peanuts, were about equal. Slightly more pounds of feed were used with early finishing crops than without them. The system of hog-grazing followed did not appear to exert a controlling influence on costs, except that the farms using only waste peanuts had very low costs, as did those using only interplanted peanuts when the latter are treated as a by-product in computing their costs of production. Yield per acre of finishing crops was an important factor affecting costs of production. High yields were associated with a high poundage of pork produced per acre and low total costs of producing pork. The amount of feed disappearing or used per 100 pounds of gain was also an important factor affecting costs. Other things being equal, the smaller the quantity of feed required per unit of gain, the lower the cost. The quantities of grazed feed disappearing per 100 pounds of gain were associated with the number of head of hogs on hand on September 1 and the number of days of grazing provided for the consumption of a given quantity of feed. Adjustment of the number of hogs to the feed supply influenced markedly the efficiency with which feed was used. The two factors, namely, yield per acre of crops hogged-off and adjustment of number of hogs to the feed supply exerted an outstanding influence on costs of production. As a two-year average, the farms which were above average in both these factors produced pork at a cost of approximately $5.50 per hundredweight of marketable gain; those below average in both factors at approximately $8.00 per hundredweight.