Farm Economics - The Pig Lesson

You actually believe that stuff?

I've helped on a few dairies & hog farms around me - the use of the milk hormone is rather rare 'here', none of these fellas use it at all. Nothing put in the feed either, other than minerals & vitamins.

I think 'the story' is so good that many, like you, believe it, but the reality is there is very little to it. It's urban legend.

I see reciepts nailed to the wall where dad fed medicated feed to the hogs back in the 60s. But that was when there was an outbreak of something to clear up. Not a regular, all the time thing.

Kinda hard to believe so many folks believe as you do - it is not reality.

--->Paul

Terri, if we are going to look at the ecconomics of raising critters, we have to do a fair comparison.

Using your logic, a hog farmer could put up a $60,000 building, and after the first year, say well the building is already there, so there is no building cost in raising the hogs......

It doesn't work that way.

You have to include the land, feed, housing, and labor costs. And be realistic about them.

I understand what you are saying & trying to do - raising critters is a hobby, not a buisness and none of us cost out the expenses of a hobby.

But, if we are to answer the original question honestly, we have to include realistic costs - or lost oppertunity - in the numbers. That would be the only way to get an honest answer to the question.

And again, this is only for looking at least-cost. If one values home-raised food over purchased food, the dollar numbers are totally meaningless. I do understand that.

--->Paul

rambler, I never did that with buildings but I DID do that with the land!

All of my life I craved land. Green fields that would NOT! be paved over (I grew up in San Jose where every thing really DOES get paved, excepting for houses with lawns and evergreens. No flowers or vegetables: just evergreens!)

I did not buy the land to farm, I bought it because of a deep craving.

In other words, I would have bought it anyways! And, it has turned out a good investment: I paid $75,000 for a house and an acre that is currently worth twice that. The value will go up even farther as soon as they put that hospital in up the road.

As an investment, the land will pay for itself. As will the 5 acres that I bought farther out (it is between 2 growing cities).

SO, when you figure land as an INVESTMENT, then anything you raise on it is gravy. Excepting for the labor, that is!

Do you know, there ARE ways of raising food with less labor. I am doing that on my garden. So, if I raise $200 of vegetables but only put in $100 worth of labor and inputs, how do you figure the extra $100?

I have always taken it as profit, and I do not include the land cost because it IS an investment which WILL pay for itself!

As for the $60,000 hog facility, it depreciates over 10 years or so, yes? If you do not use it, you WILL take a BIG loss! But, AFTER the 10 years, I would NOT consider the building a cost: only the building repair!

Here's my thoughts on this thread so far.

With your line of reasoning.....

It never pays to do anything for your self.

Laundry.....no. It's cheaper to hire it out.
Cutting your lawn.
Chopping firewood
raising a garden.
Doing home repairs yourself.

Because generally you get paid better in your "specialized" field. Than any marginal work you could do. So I'd submit for your consideration...... Just go to work. make money and pay others to do everything else. You can start the next great "homesteading" movement...... Consumpstead (meaning to consume in stead).
This is where you do nothing for your self and go to the Walmart; live in a small apartment in the city(space is over rated and expensive.)

Or you can try as you might to be a self sufficient as possible.

So you only wish to riddicule me? A person tries to have a conversation, & all you want to do is put me down?

The question was not: Which is the better way to get pork.

Or which is the more fun way to get pork.

Or which is the way you want to obtain your pork?

The question was, which is the cheapest way.

A very simple question, with a very simple answer.

Any of the other questions would _certainly_ have a very different answer from me.

I tried very hard to keep my comments positive, and conversational, and in line with some friends discussing things.

I believe Terri still doesn't understand the ecconomics point of it all, but that is ok. I tried, & was not going to comment any more on it. There are a lot of things I don't understand either. She is entitled to be wrong too.

But, you seem to understand by your reply - & still just want to beat up on me?

What for?

(I disagree with you on the laundry - in many practical cases it can be cheaper to own the washer & drier & do your own - but I get your point that you actually agree with me - on pure ecconomics, buying is often cheaper than doing yourself.)

--->Paul

Folks, let's try to keep the exchange here friendly. Lots and lots of good points have been brought up on both sides of the original and subsequent viewpoints. This has been a nice educational thread.

Step back, take ten deep breaths...

I think part of the problem is, everybody is defining the word "cheapest" in a different way. Some people are looking at the word "cheap" to mean of poor quality, some are looking at the word "cheap" to meal less dollars put into the product, and some people use the word "cheap" to include the labor put into the pig AND the dollar amount as well!

That is 3 very DIFFERENT definitions, and so how could people possibly agree when we are using different yard sticks?

For me, in my opinion, unless you inherited wealth labor is the best yardstick. That labor MIGHT be filtered through a job (which we are paid for, and we use the money to buy feed) OR it might be straight labor (for ourselves). The thing is, SOME ways of raising pigs uses less labor than others!

The large corporations are fond of using "economy of scale", which means they get a break on feed because they order in bulk and they use their buildings and equipment.

But, there ARE other ways of being economical. Economy of scale is not ALWAYS better than other forms of economy (though it very often is).

One REALLY economical way to get pork is to set out corn, and shoot a wild pig who comes to get it! One really eXPENSIVE way to have a pig is to hire somebody to build a barn, buy the pig, buy feed, and have it slaughtered and cut up for you. The first way is cheaper than commercial pork, the second way is more expensive.

One moderate way to keep a pig is to bang together something out of scrap lumber for summer shade, feed it things you otherwise do not need like excess vegetables and cracked eggs, buy what feed you must, and cut up the pig yourself. A butcher gets a LOT per hour: if you are a minimum-wage employee I suppose you COULD value your butchering time at $20 an hour, but I do not agree with that. If the going price of my labor is $6 an hour, but can save myself $100 by doing a job myself, I have always figured that I profited by $100. Because, I KNOW that if earn $6 in town that is what I can sell my labor for! I have simply made it possible to NOT hire somebody at $20 an hour!

Yes, I have really enjoyed reading this thread since I raise some pigs. I have only been raising pigs since 1996. Not too many people in my area raises pigs anymore, so it's nice to hear stories about other people's experiences. Take care and I'll keep reading.

There are essentially two ways to increase new income out of an enterprise: raise gross or reduce expenses.

Example: You produce a widget and have been selling it for $10. You raise the price to $12.50. You have increased gross income by $2.50 per widget. Now say your cost of production of that widget is $7.50. You keep the price at $10, but reduce expenses per widget to $6.50. You have increased net income by $1.00 per widget. If you do both at the same time, gross income is increased by $2.50, but net income is increased by $3.50 per widget.

Another concept is cost avoidance. Say you can buy a new vehicle at dealership A for $18K and the identical vehicle at dealership B for $16K. Here you have avoided $2K in cost if you will be paying cash. If you finance, then the difference may be significantly more due to the interest charges on $18K vs $16K over the life of the loan. On the cash deal, you haven't profited $2K, but rather avoided $2K in cost. That $2K can then be used elsewhere.

On a reply above someone noted they can grow a hog for $100 less than buying a finished one. That really isn't a profit, but rather a cost avoidance.

If you are picking up dropped apples, or giving the wormy ones, to a hog it is cost avoidance through reducing your need for purchased feed.

Unless you have sometime more profitable to do with the time involved, including family quality time, then perhaps a labor charge shouldn't be factored into the apple feed. Even here, say one of your children helps you obtain the apples. Then are you both avoiding cost and obtaining quality time?

At one time I was running over 60 brood cows. I had the additional pasture expenses of providing water, bushhogging down weeds in pasture, fertilizing and liming on two pastures. I also had weed control, fertilization and liming on a third field for hay. I decided to cut the herd down to what I can keep in the small pasture around my pond. Not only did I avoid those expenses on two large pasture areas, I rented those two, plus the hay field, to someone for row cropping. On all three fields I reduced expenses while at the same time generated more net income from them than from the larger herd of brood cows. For my significantly smaller herd I can get enough hay off of odd corners and such to avoid having to purchase hay off the farm - more cost avoidance.

By my figuring I am netting more out of this arrangement. My gross is down, but the decreases in expenses more than offset the income from the larger cow herd. (And, if the row cropper grows corn, I can turn my smaller herd out on the corn stubble to reduce hay needs - cost avoidance.)

Factored into this is far, far, far less time involvement on my part. I'm not out bushhogging the fields, but still bushhog between crop area and fence rows. Reduces bushhogging time from say 14 days a year to one - which thereby reduces fuel cost and wear and tear on tractor and bushhog. I can use that extra time in my eBay business (generating income there) plus have the cost avoidance in equipment operating and wear and tear costs.

Fertiliation, weed control and liming are now the responsibility of the row cropper on the acreage he plants. As long as he maintains field fertility (which is in his own interest to do) my net land fertility largely won't change. (And I somewhat enhance this with the agreement no more than two years of corn without one year at least of soybeans.) The guy will also no-till after soybeans, but lightly disk after corn, at least partially covering field stubble for be worked on by soil critters.

I think this is where we disagree. I see the "cost" avoidance. As net pocket income (without additional taxes or fees). This is due to the fact that I gain "meat" for instance with less cash out of pocket. The fact that my income is largely the same year over year yet expenses increase I find this as a way to offset the difference. Now you mention "family" time as a "profit" of sorts. Well I agree also. I believe keeping stock is a great way to teach children about life, living, and the importance of doing a good job.