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Abstract
Production records for swine
producers specializing in niche
markets (e.g., natural) are analyzed
to determine the factors impacting
profitability. The data span a cross
section of 42 niche pork producers
and record their 2006 production
costs. Profitability was measured
by the net margin (adjusted for
inventory and after all costs) per
hundred pounds of pork produced.
In comparing the 10 most and 10
least profitable producers, there
were statistically significant
differences in production costs
(feed, labor, and other operational
costs) and efficiency (feed
conversion, labor intensity, and
farrowing frequency). Notably,
there was not a statistically
significant difference in the price
received for market hogs.
Multiple regression analysis shows
that 82 percent of the variation in
profitability across producers is
explained by feed costs, labor
efficiency, production efficiency,
management experience, and the
production of more specialized
niche pork (e.g., certified organic).
Profit margins were negatively
impacted by greater feed prices,
feed conversion rates, labor
intensity, and veterinary expenses.
Profit margins were enhanced by
greater farrowing efficiency (pigs
per litter and farrowings per year),
years of niche pork production
experience, and the marketing of
“certified organic” pork.