The independent hog producer is very hard to find in Ohio. Most of the farms that produce pigs do so on a contract basis for someone else who owns the animals. The industry moved to contracts on a large scale when the price of live hogs went to nine cents a pound a few years back. There was no way for a hog producer to make a profit on a small scale family farm.

Stan Smith, Beef Team Member in Fairfield County Ohio, suggested in the June 25th issue of the OSU Extension Beef Team newsletter that the beef industry is in a similar time of change in Ohio right now.

“There aren’t enough cost saving feed alternatives anywhere in the state of Ohio, which would allow us to put together a cattle finishing budget for the next year which shows a profit,” Smith said. “At least not at the feeder cattle prices we presently see and the feed cost we can anticipate today.”

Francis Fluharty, OSU beef specialist and coordinator of the Ohio Beef Industry Center said it this way, “It’s pretty simple, if corn is $7.50 per bushel and an average feed efficiency for calves is 6.5 to 1, then the feed cost of gain would be 87 cents per pound. When the cost of the calf, interest, yardage, treatment, death loss, and labor are added, there is no possibility for a profit.”

There are some who believe if they just keep their own calves and feed them out, it is somehow different.

The problem is if they can sell their 650 pound calves to a western feedlot or even a neighbor down the road with a dull pencil, for say $1.10, they have already made all the profit there is to make in today’s climate.

“I challenge you to run the numbers for yourself.” If you don’t have a tool you are already happy with go to: www.aede.osu.edu/programs/

farmmanagement/budgets/beef2008, said Smith.
“Even if you don’t give yourself anything for labor, management or buildings, you still lose.

If you would like to learn more about risk management, living with higher feed cost, and changing expectations in our economy, go to:  and click on “Agriculture and Natural Resources” and then click on “Beef Cattle Newsletter.” Look for the June 25th edition.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Steve Bartels may write to him in care of this publication.