1. Integrated Crop-Livestock Production Systems
John Lawrence
Iowa State University
Extension Livestock Economist

2. Overview of Iowa Livestock
#1 in production of
Hogs
Eggs
Pork processing
#5 in cattle feeding
#10 in turkeys
#11 in beef cows
#12 in milk production

3. Overview of Iowa Livestock
#1 in production of
Corn
Soybeans
Used in animal agriculture in Iowa
Over one-third of the corn
Over one-fourth of the soybeans
Grain surplus in all but 1-2 counties
Ample land for manure application

7. Diversified v. Specialized
Iowa 1980 – 2001
Number of farms -22%
Average acres per farm +23%
Hog producing farms
1980 over 53% of farms
2002 only 11% of farms

8. Stochastic Budget Analysis
Cash grain v. diversified grain-hog farm
Farrow to finish
Breed to wean
Wean to finish

9. Stochastic Budget Analysis
6000 hours of labor per year
No seasonal labor constraint
Corn production = corn demand
Corn acres = soybean acres
Manure applied ahead of corn
Tractors shared between crop and hogs

10. Cash Grain v. Hog-Grain Farms With 6000 Hours of Labor per Year
Enterprise Acres Sows Hogs Sold
Cash Grain 2378
Farrow-Finish w/G ,270
Breed - Wean w/G ,200
Wean - Finish w/G ,963

11. Net Return to Labor and Management Excluding Government Payments ($/yr) 6000 Hours per Year
Mean
Std Dev
90% Interval
Cash Grain
18,414
124,520
-164,984
226,791
F-F w/G
78,807
73,283
-29,760
207,421
B-W w/G
91,555
68,697
-11,351
208,914
W-F w/G
55,492
90,643
-84,884
212,825

12. Return on Investment Excluding Government Payments 6000 Hours per Year
Mean
Std Dev
90% Interval
Cash Grain
3.80%
3.60%
-1.50%
9.80%
F-F w/G
4.50%
5.60%
-4.00%
14.30%
B-W w/G
4.80%
6.80%
-5.50%
16.50%
W-F w/G
2.60%
5.00%
-5.30%
11.20%

13. Net Return to Labor and Management Including Government Payments ($/yr) 6000 Hours per Year
Mean
Std Dev
90% Interval
Cash Grain
127,564
81,819
56,591
285,458
F-F w/G
104,119
67,430
7,490
221,214
B-W w/G
102,079
66,344
4,085
216,494
W-F w/G
88,758
82,814
-30,681
236,775

14. Return on Investment Including Government Payments 6000 Hours per Year
Mean
Std Dev
90% Interval
Cash Grain
6.90%
2.40%
4.90%
11.50%
F-F w/G
6.50%
5.10%
-1.00%
15.40%
B-W w/G
5.80%
6.60%
-3.90%
17.10%
W-F w/G
4.50%
-2.20%
12.40%

15. Percent of Observations by Rank and that Beat Cash Grain Government Payments Included
Profitability Rank
Beat
Enterprise 1 2 3 4
Cash
Grain
Cash Grain
55% 8% 9%
28%
F-F w/G
15%
44%
37% 4%
39%
B-W w/G
20%
32%
31%
17%
38%
W-F w/G
10%
16%
23%
51%

16. Source \\nt1_econ\data\share468\Lawrence\Data\LMIC Files\IMPEXP1.xls

17. Cash Grain v. Beef-Grain Farms With 6000 Hours of Labor per Year
Yearling Steers
Calf Steer
Cow-Calf
Cow-Finish
Crop
1,141
866 22
232
Pasture -
1,103
829
Hay 84
123
191
174
Total
1,225
989
1,316
1,235
Cattle
1,405
1,102
441
605
Acres and Head

18. Cash Grain v. Dairy-Grain Farms With 6000 Hours of Labor per Year
Acres and Head
Dairy
Pasture Dairy
Crop
145
105
Pasture - 80
Hay 85 19
Silage 37
Total
266
204
Cattle 83 63

19. Summary Cost savings from diversification
Less acres per person with livestock
Impact of 2002 Farm Bill
Without: cash grain was lowest average and highest risk
With: cash grain is highest average and lowest risk

20. Future analysis Stochastic analysis of beef and dairy
Include crop insurance
Seasonal labor constraints
Optimization programming with greater detail on production and price
Inter-farm v. intra-farm optimization