Returns and Costs of Niche Pork Production in 2006

Abstract

Production of niche pork has been expanding in response to growing demand. Little information is known about the costs and returns from niche pork production. This report provides information on cost and returns for 41 niche pork producers. Return levels show that the average return to capital, unpaid labor and management for the top 15 producers was $17.43 per hundred pounds of pork produced, while this average was$2.17 for the bottom 15 producers and $10.08 for all 41 producers. The average margin over all costs on a per head sold basis was slightly below breakeven (-$2.36) for all 41 producers. The average return per hour of labor after all costs was $13.17 for all 41 producers, but$22.66 per hour for the top 15 producers and $3.02 for the bottom 15 producers. The average total cost per hundred pounds of pork produced for all producers was$52.05, while the top 15 third had average total costs that were $11.17 less than the bottom 15 producers ($46.05 vs. $57.22). The main contributor to cost differences between the top third and bottom third producers was operating costs, which included feed and other operating expenses but not labor. These costs represented 96 percent of the total cost difference, with 56 percent of this difference being in other operating costs and 40 percent in feed costs