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Maximizing profit in broiler production as prices change: A simple approximation with practical value

Author

Listed:
  • Mariano J. Gonzalez-Alcorta

    (Department of Poultry Science, University of Georgia)

  • Jeffrey H. Dorfman

    (Department of Agricultural & Applied Economics, University of Georgia)

  • Gene M. Pesti

    (Department of Poultry Science, The University of Georgia.)

Abstract
Time-varying energy and protein levels in broiler feed raise profit considerably above feeding at constant levels. To accurately set profit-maximizing levels of feed ingredients, nonlinear biological response functions are employed. Nonlinear programming allows solution for optimal energy, protein, and ingredient levels for given prices, but may be too complex for industry-wide use. However, separable linear programming can approximate the optimal solution without significant loss of profit. Linear programming is common in broiler feed formulation, so producers can adopt this technique with existing technology. The potential increase in profits might well ensure the economic survival of marginal firms. ©1994 by John Wiley & Sons, Inc.

Suggested Citation

  • Mariano J. Gonzalez-Alcorta & Jeffrey H. Dorfman & Gene M. Pesti, 1994. "Maximizing profit in broiler production as prices change: A simple approximation with practical value," Agribusiness, John Wiley & Sons, Ltd., vol. 10(5), pages 389-399.
    • Handle: RePEc:wly:agribz:v:10:y:1994:i:5:p:389-399
    DOI: 10.1002/1520-6297(199409/10)10:5<389::AID-AGR2720100504>3.0.CO;2-I
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    References listed on IDEAS

    as
    1. Oscar R. Burt, 1993. "Decision Rules for the Dynamic Animal Feeding Problem," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 190-202.
    2. Miller, Bill R. & Arraes, Ronaldo de Albuquerque e & Pesti, Gene M., 1989. "Formulation Of Broiler Finishing Rations By Quadratic Programming," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 18(1), pages 1-10, July.
    3. Jean-Paul Chavas & James Kliebenstein & Thomas D. Crenshaw, 1985. "Modeling Dynamic Agricultural Production Response: The Case of Swine Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 636-646.
    4. Hovav Talpaz & Shmuel Hurwitz & Jose R. de la Torre & Peter J. H. Sharpe, 1988. "Economic Optimization of a Growth Trajectory for Broilers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 382-390.
    5. Hertzler, Greg, 1988. "Dynamically Optimal And Approximately Optimal Beef Cattle Diets Formulated By Nonlinear Programming," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 13(1), pages 1-11, July.
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    Cited by:

    1. Costa, Ecio de Farias & Houston, Jack E. & Gunter, Lewell F. & Pesti, Gene M., 2002. "Parts Or Whole? Efficient Broiler Production Responses To Consumer-Driven Markets," Journal of Food Distribution Research, Food Distribution Research Society, vol. 33(1), pages 1-10, March.
    2. Costa, Ecio de Farias & Miller, Bill R. & Houston, Jack E. & Pesti, Gene M., 2000. "Production And Profitability Responses To Alternative Protein Sources In Broiler Rations," Faculty Series 16705, University of Georgia, Department of Agricultural and Applied Economics.
    3. Costa, Ecio de Farias & Houston, Jack E., 2004. "Consumer-Driven Profit Maximization in Broiler Production and Processing," Brazilian Journal of Rural Economy and Sociology (Revista de Economia e Sociologia Rural-RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 42(1), pages 1-18, March.
    4. Costa, Ecio de Farias & Houston, Jack E. & Pesti, Gene M., 2001. "How Does Cottonseed Meal Compare As An Alternative Protein Source To Soybean Meal In Poultry Production?," Faculty Series 16648, University of Georgia, Department of Agricultural and Applied Economics.
    5. Costa, Ecio de Farias & Houston, Jack E. & Gunter, Lewell F. & Pesti, Gene M., 2002. "Incorporating Consumer Demand In Broiler Profit-Maximization Modeling," Journal of Food Distribution Research, Food Distribution Research Society, vol. 33(3), pages 1-10, November.

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