|Abstract or Summary
- Several agricultural and related industry groups in the Pacific
Coast states have expressed concern about the competitive position
of these states in the production of feed grains and livestock products.
This study was directed toward the investigation of these
In order to permit the real world situation, with its accompanying
multivariable reality, to be reduced to workable size, a
linear programming model was designed. The 48 contiguous states
were divided into five regions with smaller regions in the western
United States to permit a more detailed analysis of the West.
The quantities of feed grains produced in each state were
determined and summed for the states in a region. The quantities
of fed beef, pork, broilers, turkeys, eggs, and milk (the products
of the major grain consuming classes of livestock) demanded in each
state were computed.
A matrix of transportation costs between regions was developed
for feed grains and for the livestock products of the model. Regional weighted average prices received by farmers for each feed grain and
for each livestock product were determined.
The model was then utilized to indicate production of all the
livestock products required for consumption by region at the least
cost of producing the products.
Optimal solutions were obtained using 1968 and 1969 relative
prices and these solutions were analyzed. The analysis indicates
that generally the states which are deficit in beef, pork, broiler,
and egg production have a slight economic advantage in producing
these products for local consumption until the locally produced feed
supply is utilized. Each region in the model produced the milk consumed
in that region. Region I (Oregon and Washington) has traditionally
been self-sufficient in turkey production, and Region III
(California) has been a turkey exporting state. According to the
model, both of these regions should import the turkey consumed in
the region to derive optimum economic benefits. These conclusions
are based on the relative prices and transportation costs that
existed in 1968 and 1969.
After the solutions were obtained, the price of wheat in Region I
was varied using a parametric procedure available with the linear
programming package. Results of this analysis using 1968 and 1969
relative prices were described. The parametric analysis indicated
that at the 1968 price of wheat in Region I more than twice the
quantity of wheat allocated to livestock feeding in the basic model
could have been economically utilized and would have reduced costs
of producing the livestock products consumed in Region I.
The 1969 wheat price in Region I was sufficiently low that the
parametric analysis indicated an allocation of over four times the
quantity used in the basic model for livestock feeding. The basic
model utilized 1,043,000 tons of wheat for livestock feeding.
It can be concluded from the analysis that Region I could have
utilized much larger quantities of wheat for livestock feeding than
was allocated for feeding in the basic model. Based on the relative
feed ingredient costs that existed in 1968, Region I producers of
pork, broilers, eggs, and milk are competitive with other regions
in supplying the quantities of these products demanded for regional
The 1969 relative prices made Region I even more competitive
in producing pork, broilers, eggs, and milk, and added beef production
as an economically advantageous alternative.
These conclusions are based only on feed ingredient and transportation
costs. If non-feed costs and relative feeder cattle costs
for beef production are included, Region I producers appear to have
a slight margin for producing beef,for local consumption until
locally produced feed supplies are exhausted.