Economic Replacement of a Heterogeneous Herd |
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| Authors: | Kathryn A Boys Ning Li Paul V Preckel Allan P Schinckel Kenneth A Foster |
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| Institution: | Kathryn A. Boys is a graduate research assistant and Paul Preckel and Kenneth Foster are professors in the Department of Agricultural Economics, Purdue University, 403 West State Street, West Lafayette, IN 47907. Ning Li is senior risk modeler, Consumer Analytics and Modeling Unit, Citigroup, 30 Arbor Road, Syosset, NY 11791. Allan Schinckel is professor, Department of Animal Sciences, Purdue University, Lilly Hall of Life Sciences, West Lafayette, IN 47907. |
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| Abstract: | A model was developed to determine the optimal slaughter weights of pigs with heterogeneous growth raised in a 1,000 head barn and marketed in truckload groups. Under commonly used revenue schemes, which include discounts for weight and leanness, the optimal strategy was to market one or two truckloads of the heaviest animals, to wait several days, and then to market the rest of the herd. This multiple marketing strategy allows the producer to avoid some sort losses for heavy animals, but only modestly extends the grow/finish period, reflecting the dominance of the opportunity cost of facilities in the herd replacement decision. |
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| Keywords: | herd decisions livestock economics livestock replacement |
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