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4 F-3/3 Federal Reserve Bank of Chicago - • July 28, 1961 FEEDER CATTLE SHIPMENTS into Corn Belt states during June were 9 per cent below the same month last year. This is the second month in which inshipments were below the year-earlier level and reflects the effects of the sharp decline in prices of fat cattle during the spring. The greatest reduction was in Illinois, down 40 per cent from last year. Increases were reported in the western Corn Belt states of Iowa, South Dakota and Nebraska. COSTS of hog production have been presented in a recent series of studies at Purdue University. A hundred pounds of hogs produced on farms with 50 or more sows farrowing twice a year cost $2 less than on those with -less-than 25 sows. The large-scale_ producers had an average of 59 sows, almost four times the average of 16 for the small producers. Nearly half the saving was achieved through lower feed costs. The large hog producers required only 380 pounds of feed per hundred pounds of hogs marketed while the smaller producers used 10 per cent more feed. The remaining cost reduction was about evenly divided between lower expenses for buildings, machinery and equipment and a smaller amount of labor. • While size of the operation is an important element costs of hog production, apparently the reducing in management skill of the farmer and that unknown factor "luck" have even more important roles in achieving efficiency. The most efficient group of small producers had costs $1.45 a hundred pounds below the average of the largest producers and the least efficient large producers had costs $.33 above the average of the small 1 utturat ett- er .S. DEPT OF AGRICULTURE LIBRARY AUG 2 1 1961 Number 618 0§PROtithRlartakisnsin costs was due to producers. variations in -the-feed---required--to.4roduce a hundred pounds of hogs, which largely reflects the amount of death loss and size of litter. The best third of all producers had 8 pigs raised per litter while the poorest third had an average of only 5.6 pigs, and the difference in cost between these groups was more than $3 per hundred pounds. Large-scale production of hogs clearly produces economies through reductions in overhead costs and labor time. If improvements in disease control, better feeding practices, etc., can reduce the variability of costs, the small hog producer will be under considerable economic pressure from the lower production costs of the larger producers. However, until alternative uses are developed for the labor and capital of the small scale producer, hog production will continue to be an essential source of his income. Furthermore, greater efficiency in small operations can achieve substantial savings and reduce costs close to those obtainable through largescale production. Research Department Cost of Producing Hogs, Central Indiana, 1956 and 1957 (per hundred pounds) Most efficient Under 25 Number of farms Sows per farm Feed per cwt.(lbs.) costs Direct 7. . . 14 0 7 kliscellaneous Total , Fixed costs Buildings, machinery, equipment Interest(at 6 per cent) Total Total costs except labor .. Labor cost (.11 per hour) .. Total costs 1 25-49 Number of sows farrowing twice a year Over-all average 50 and 50 and Under 25-49 over 25 over Least efficient Under 25 25-49 50 and over 10 16.5 300 10 34.5 315 3 53.8 282 52 15.8 418 53 33.6 406 13 59.3 380 10 15.5 536 10 30.9 526 3 58.2 457 $ 7.64 .83 8.47 $ 7.94 .79 8.73 $ 7_18 .79 7.97 $10.64 .86 11.50 $10.34 .91 11.25 $ 9.70 .82 10.52 $13.65 .74 14.39 $13.43 .96 14.39 $11.65 .96 12.61 1.97 .39 2.36 10.83 1.01 11.84 1.79 .42 2.21 10.94 .90 11.84 1.61 .44 2.05 12.57 .72 13.29 2.55 .46 3.01 17.40 1.30 18.70 2.41 .48 2.89 17.28 .96 18.24 1.70 .44 2.14 14.75 .88 15.63 1.88 .46 2.34 10.31 .52 10.83 2.18 .44 2.62 14.12 1.18 15.30 1.74' .44 2.18 13.43 .85 14.28 Corn used was charged at $1.21 per bushel, 35 per cent protein equivalent at $5.00 per cwt. Total cost was $2.55 per cwt. FARM BUSINESS CONDITIONS June 1961, with comparisons 1960 1961 ITEMS PRICES: Received by farmers (1947 - 49 =100) Paid by farmers (1947 - 49 =100) Parity price ratio (1910 - 14 =100) Wholesale, all commodities (1947 - 49=100) Paid by consumers (1947 - 49 =100) Wheat, No. 2 red winter, Chicago (dol. per bu ) Corn, No. 2 yellow, Chicago (dol. per bu ) Oats, No. 2 white, Chicago (dol. per bu.) Soybeans, No. 1 yellow, Chicago (dol. per bu ) Hogs, barrows and gilts, Chicago (dol. per cwt.) Beef steers, choice grade, Chicago (dol. per cwt.) Milk, wholesale, U.S.(dol. per cwt.) Butterfat, local markets, U.S.(dol. per lb.) Chickens, local markets, U.S.(dol. per lb.) Eggs, local markets, U.S. (dol. per doz.) Milk cows, U.S.(dol. per head) _ %. Farm labor, U.S.(dol. per week without board) Factory labor, U.S. (dol. earned per week) June June May - 86 87 87 120 78 118 128 121 120 78 79 119 127 120 127 1.91 1.22 1.89 1.88 1.14 1.15 .69 .70 .76 2.73 3.10 2.15 16.74 16.57 22./4-5 23.14-3 3.88 .60 3.92 .6o 16.89 26.04 3.80 .59 .13 .31 228 .14 .32 2214- .17 .32 2214. -- 4.6.25' 45.75a 91.60 94.24 92.90 PRODUCTION: Industrial, physical volume (1947 - 49 =100) Farm marketings, physical volume (1947 - 49 =100) ... 167 110 164 106 166 106 INCOME PAYMENTS: Total personal income, U.S.(annual rate, bil. of dol.) ... Cash farm income, U.S. 1 (annual rate, bil. of dol.) 417 .._ 14-13 404 37 36 EMPLOYMENT: Farm (millions) Nonagricultural (millions) 6.7 5.6 6.9 62.0 61.2 61.7 • FINANCIAL (District member banks): Demand deposits: Agricultural banks (1955 monthly average =100) Nonagricultural banks (1955 monthly average =100).... Time deposits: Agricultural banks (1955 monthly average =100) Nonagricultural banks (1955 monthly average =100).... 1 a . 99.5 98.6 98.0 102.2 102.7 103.3 142.8 114-1.9 114.5.1 133.1 129.4 146.1 Based on estimated monthly Income. April I, Compiled from official sources by the Research Department, Federal Reserve Bank of Chicago •
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