Economic analysis of size and feed type of swine production in Hawaii

Khem R. Sharma, PhD; PingSun Leung, PhD; Halina M. Zaleski, PhD

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Purpose: To examine the profitability of Hawaii swine production and the industry's potential for future expansion.

Methods: Sixty commercial hog producers were interviewed to collect data on capital investment in and various costs of and returns from swine production. Costs and returns were compared by farm size and type of feeding practice. Factors that significantly affect profitability were determined. Costs and returns of farrow-to-finish operations were also compared between Hawaii and Iowa.

Results: The study showed wide variation across different farm sizes with respect to total economic cost and net return per 100 lb (45.4 kg) of live hog produced. The total economic cost was negatively correlated (r = -.318, P = .016) and net return was positively correlated (r = .336, P = .011) with farm size. The average net return for large herds (> 75 sows) was higher (P =.003) than for small (< 25 sows) and medium (25-75 sows) herds. Factors related to these differences were lower (P < .001) labor use, a lower (P = .006) price for purchased feed, and a tendency to wean more (P = .067) pigs per sow per year in large herds compared to small and medium herds. However, the sample revealed a sizable proportion of small herds that had profitability comparable to some large herds. Although feed costs were lower among garbage feeders, their total economic cost per 100 lb (45.4 kg) of live hog produced was relatively higher than for grain feeders. Overall, grain feeders were not significantly different in profitability from garbage feeders. Garbage feeders did not realize the full benefits of reduced feed costs due to garbage feeding because they paid a higher (P = .002) price for purchased feeds, used more (P < .001) labor, and weaned fewer (P < .001) pigs per sow per year compared to grain feeders. On average, the total economic cost per 100 lb (45.4 kg) of live hog produced by farrow-to-finish operations was nearly three times higher in Hawaii than in Iowa.

Implications: Capturing economies of size and increasing efficiency may be the key to a sustainable swine industry in Hawaii.

Keywords: profitability, farm size, feeding, Hawaii

RIS citationCite as: Sharma KR, Leung PS, Zaleski HM. Economic analysis of size and feed type of swine production in Hawaii. J Swine Health Prod 1997;5(3):103-112.

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