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Impacts of PST on Optimal Production and Marketing Decisions of a Grow-Finish Hog Farm Operation

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  • Govindasamy, Ramu
  • Liu, Donald J.
  • Kliebenstein, James

Abstract

This paper examines the impact of PST on the optimal production/marketing decisions of a grow-finish hog farm operation. The analysis evaluates PST from three angles: the feed efficiency effect, the leaner meat price effect, and the aggregate-supply-induced price effect. When limited to the feed efficiency effect only, the primary response to the new technology is to increase the animal turnover rate of the operation. When the leaner meat price effect is also included, marketing weight increases while turnover rate remains relatively unchanged. Additionally, if the increased aggregate supply depressed the market price by more than 10%, the benefits from improved feed efficiency and leaner meat will be completely dissipated. Aggregate price adjustments (reductions) of less than 10 percent maintained positive producer benefits resulting from improved feed efficiency and leaner meat.

Suggested Citation

  • Govindasamy, Ramu & Liu, Donald J. & Kliebenstein, James, 1993. "Impacts of PST on Optimal Production and Marketing Decisions of a Grow-Finish Hog Farm Operation," Agricultural and Resource Economics Review, Cambridge University Press, vol. 22(2), pages 166-174, October.
    • Handle: RePEc:cup:agrerw:v:22:y:1993:i:02:p:166-174_00
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    1. Govindasamy, Ramu & Liu, Donald & Kliebenstein, James, 1993. "Economic Impacts of Porcine Somatotropin on a Farrow-to-Finish Hog Farm Operation," ISU General Staff Papers 199302010800001247, Iowa State University, Department of Economics.
    2. Jean-Paul Chavas & James Kliebenstein & Thomas D. Crenshaw, 1985. "Modeling Dynamic Agricultural Production Response: The Case of Swine Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 636-646.
    3. Harry M. Kaiser & Loren W. Tauer, 1989. "Impact of Bovine Somatotropin on U.S. Dairy Markets under Alternative Policy Options," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 11(1), pages 59-73.
    4. Catherine M. Lemieux & Michael K. Wohlgenant, 1989. "Ex Ante Evaluation of the Economic Impact of Agricultural Biotechnology: The Case of Porcine Somatotropin," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(4), pages 903-914.
    5. Kliebenstein, James & Buhr, Brian L. & Hayenga, Marvin L., 1989. "Economic Impacts of Technology Adoption: The Case of Pst," Staff General Research Papers Archive 11634, Iowa State University, Department of Economics.
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