An Economic Comparison Of Midwest And North Carolina Hog Prices

During the decade of the 60's, hog production in North Carolina increased by more than 50 percent. During the early 60's, North Carolina pork consumption was as much as 100 million pouuds greater than production. By the end of the decade, pork production in the state exceeded consumption. Theoretical price relationships between North Carolina and the Midwest were examined giving specific attention to North Carolina's change from importing to exporting pork to other states. North Carolina hog prices were compared to prices at various midwestern markets using prices reported during the 60's. Specific attention was given to differences in methods of marketing and price reporting and to differences in quality of hogs. The observed price differences were consistent with theoretical differences. North Carolina prices were found to be higher than Midwest prices by an amount roughly equal to transfer cost from the Midwest to North Carolina during the early 60's. As production in North Carolina increased, North Carolina hog prices declined relative to Midwest prices. In the late 60's, North Carolina prices were about the same as prices in the Midwest. No further relative decline would be expected.