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MF1070 Contract Hog Production - uwagec.org

Kansas State University Agricultural Experiment Station and Cooperative Extension ServiceMF-1070 Hog Enterprise ManagementDEPARTMENT OF AGRICULTURAL ECONOMICSC ontract hog produc-tion involves an agreementbetween a contractor and agrower. The contractorowns and provides feederpigs for feeder pig finish-ing contracts and breedingstock for feeder pigproduction contracts, andtypically bears the costsassociated with feed,medication, and transporta-tion. Growers raise thepigs in their own facilities,and are compensated on a fee basis. Growers coststypically include labor, facility costs, repairs, utilities,insurance, and property in Contract hog Production has increased inrecent years. This growing interest in Contract produc-tion is related to the risks associated with independentproduction, the availability of financing throughcontracting, and the stability of Contract returns.

2 contract rewards them for what they do best. For example, production bonuses that are too “optimistic” will not benefit even an above average producer.

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