• TABLE OF CONTENTS
HIDE
 Copyright
 Front Cover
 Table of Contents
 Errata
 Introduction
 Florida's livestock and poultry...
 The cost of livestock rations in...
 The costs of transporting livestock,...
 Relationship between the cost of...
 Summary and conclusions






Group Title: Bulletin - University of Florida. Agricultural Experiment Station - no. 722
Title: Livestock product transportation cost-feed cost relationships between the Midwest and Florida
CITATION PAGE IMAGE ZOOMABLE PAGE TEXT
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00027513/00001
 Material Information
Title: Livestock product transportation cost-feed cost relationships between the Midwest and Florida
Series Title: Bulletin University of Florida. Agricultural Experiment Station
Physical Description: 55 p. : maps ; 23 cm.
Language: English
Creator: McPherson, W. K ( William Kenneth ), 1914-
Witt, Harry Gene, 1933-
Publisher: Agricultural Experiment Stations, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: 1967
 Subjects
Subject: Animal industry -- Costs -- Florida   ( lcsh )
Poultry industry -- Costs -- Florida   ( lcsh )
Feed industry -- Middle West   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Includes bibliographical references.
Statement of Responsibility: W.K. McPherson and H.G. Witt.
General Note: Cover title.
Funding: Bulletin (University of Florida. Agricultural Experiment Station) ;
 Record Information
Bibliographic ID: UF00027513
Volume ID: VID00001
Source Institution: Marston Science Library, George A. Smathers Libraries, University of Florida
Holding Location: Florida Agricultural Experiment Station, Florida Cooperative Extension Service, Florida Department of Agriculture and Consumer Services, and the Engineering and Industrial Experiment Station; Institute for Food and Agricultural Services (IFAS), University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: aleph - 000929570
oclc - 18367794
notis - AEP0358

Table of Contents
    Copyright
        Copyright
    Front Cover
        Front Cover
    Table of Contents
        Page 1
    Errata
        Page 2
    Introduction
        Page 3
        Background
            Page 3
            Page 4
        Scope
            Page 5
    Florida's livestock and poultry industry
        Page 6
        Page 7
        Page 8
        Page 9
        Consumption
            Page 6
        Production
            Page 6
        Structure of the livestock feed industry
            Page 10
        Elevators
            Page 11
        Feed mixers
            Page 11
            Page 12
            Page 13
            Page 14
            Page 15
        Combination feed mixers and elevators
            Page 16
        Cattle feedlots
            Page 17
        Prospects for the future
            Page 17
    The cost of livestock rations in the midwest and Florida
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
    The costs of transporting livestock, poultry products, and mixed feeds between the midwest and Florida
        Page 26
        Transportation costs
            Page 26
        Feed efficiency
            Page 26
        Method of presenting comparisons
            Page 27
            Page 28
    Relationship between the cost of feed and the cost of shipping livestock products between midwestern points of origin and Florida destinations
        Page 29
        Page 30
        Page 31
        Page 32
        Comparison of feed costs
            Page 29
        Comparison of feed cost differentials with the cost of shipping livestock products
            Page 29
            Milk
                Page 29
            Eggs
                Page 33
                Page 34
                Page 35
                Page 36
                Page 37
                Page 38
            Broilers
                Page 39
                Page 40
                Page 41
                Page 42
            Beef
                Page 43
                Page 44
                Page 45
                Page 46
            Pork
                Page 47
                Page 48
                Page 49
                Page 50
                Page 51
                Page 52
    Summary and conclusions
        Page 53
        Page 54
        Page 55
Full Text





HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida





Bulletin 722 December 1967


LIVESTOCK PRODUCT TRANSPORTATION COST =
FEED COST RELATIONSHIPS
Between the Midwest and Florida


W. K. McPherson and H. G. Witt


Agricultural Experiment Stations
Institute of Food and Agricultural Sciences
University of Florida, Gainesville










CONTENTS


INTRODUCTION ........ ...........~.. 3
Background ...---.. .. ... -....- ....... .... .. ...-....---- .... 3
Scope ..... ..... ....... ............. .....-.... ......... ...-. 5


FLORIDA'S LIVESTOCK AND POULTRY INDUSTRY .. ................ 6
Consum ption ...... ... ................ ..................... 6
Production ...... ....--- ------..... -------- ..... .... ..... ................... 6
Structure of the Livestock Feed Industry .......--......- ..... ........ 10
Elevators ...... .............. ........ ............. .. 11
Feed Mixers ..-................... ........ 11
Combination Feed Mixers and Elevators ..................................... 16
Cattle Feedlots -..... ... ............ ......... .......................... 16
Prospects for the Future ..................... 16

THE COST OF LIVESTOCK RATIONS IN THE
MIDWEST AND FLORIDA -----............... -- ........ ..... 18


THE COSTS OF TRANSPORTING LIVESTOCK, POULTRY
PRODUCTS, AND MIXED FEEDS BETWEEN THE
MIDWEST AND FLORIDA --............. ...---- ....-. 26
Transportation Costs .. ............- ......... .............. ...... 26
Feed Efficiency .. ..... .... -........................................ -. 26
Method of Presenting Comparisons ...................... ......... ... 27

RELATIONSHIP BETWEEN THE COST OF FEED AND THE
!COST OF SHIPPING LIVESTOCK PRODUCTS BETWEEN
MIDWESTERN POINTS OF ORIGIN AND FLORIDA
DESTINATIONS -- ....2....9... ... ........ ................ ... 29
Comparison of Feed Costs ...... .......-- ......... .. ....................... 29
Comparison of Feed Cost Differentials with the
Cost of Shipping Livestock Products ......................... ....... .... 29
M ilk ........... ... ..........-.... ...- .....---.....-- .... .... 29
Eggs ................................................... 33
B roilers ................. ......-- -- ..- .... ....- .....-- ......--- .......- .... 39
Beef ......... --...... .. .---.... ..-..--- ---.... 43
Pork .. ......- .. -.. -... -... -..-...--.....- ..........- ... ............. 47


SUMMARY AND CONCLUSIONS ... ~........... ......................... 53


APPENDIX TABLES. Available upon request to
Department of Agricultural Economics
AGRICULTURAL EXPERIMENT STATIONS
GAINESVILLE, FLORIDA





ERRATA
Cover Title
Livestock Product Transportation Cost Feed Cost
Relationships between the Midwest and Florida
Page 9 Table 2, third entry under "Product"
Beef Cattle (1000 dollars)

Page 16 Table 5, 2nd entry under "Percent of total volume"
12.8
Table 5, 5th entry under "Size of Firm"
25,001-50,000

Page 16 "Combination Feed Mixers and Elevators", 5th line
firms carried

Page 18 Footnote 7, 6th line
24-hour period

Page 25 Footnote 10, reference citation
2nd edition

Page 26 Footnote 11, reference citation
Vol. 46

Page 28 Footnote 5, first line of equation
8.0 lbs. feed/lb gain in feedlot x 300 lbs.
grain x 100

Pages 31, 35, 40, 44, 49
Tables 11, 15, 20, 24, 28
Add to table title: (cents per 100 pounds)

Page 39 3rd paragraph, 5th line
frozen egg market

Page 46 last paragraph
relationship is very sensitive

Page 48 3rd paragraph, 6th line
the freight rate on both pork carcasses and
lean pork cuts between

Page 50 table title
change superscript 1 to superscript 2 after
"Florida destinations"








LIVESTOCK PRODUCT TRANSPORTATION COST-
FEED COST RELATIONSHIPS BETWEEN
THE MIDWEST AND FLORIDA1
W. K. McPherson and H. G. Witt2

CHAPTER 1
INTRODUCTION

Background
In colonial America, the livestock and poultry industry
was an integral part of an agrarian economy in which farmers
were largely self-sufficient. Livestock and poultry products
were produced and to a large extent consumed on the same
farms with the farmers themselves providing any transpor-
tation used in the production process.
The Industrial Revolution, together with the rapid in-
crease in specialization and trade that followed it, changed
the agrarian way of life. Late in the 18th century, farmers
began to specialize in raising crops both for sale and for use
in the production of livestock and poultry. Any livestock and
poultry not used on the farm was either sold directly to con-
sumers living in nearby towns and villages and/or to processors
who in turn sold their products in the urban markets. Those
who began to specialize in processing formed the nucleus from
which the livestock and poultry processing industry emerged.
For more than a century, the perishability of processed
livestock and poultry products made it necessary to locate as
near as possible to the ultimate consumers the plants in which
they were processed. Farmers delivered the live animals to
these plants. At first, cattle and hogs were driven to slaughter

1 This research was partially financed by a grant from the Southern
Railway System. The project is a cooperative undertaking of the Depart-
ments of Agricultural Economics, Animal Science, Poultry Science, and
Dairy Science. T. J. Cunha, Chairman, Animal Science Department;
R. H. Harms, Chairman, Poultry Science Department; J. F. Hentges,
Professor of Animal Science; G. E. Combs, Jr., Associate Professor of
Animal Science; M. R. Langham, Associate Professor of Agricultural
Economics; S. P. Marshall, Professor of Dairy Science of the Institute
of Food and Agricultural Science, University of Florida; and R. C.
Haldeman, Senior Transportation Economist, Southern Railway System,
have supplied much of the data and offered numerous suggestions and
constructive criticisms during the course of the work.
2 Agricultural Economist, and Research Assistant, respectively, Florida
Agricultural Experiment Stations.








LIVESTOCK PRODUCT TRANSPORTATION COST-
FEED COST RELATIONSHIPS BETWEEN
THE MIDWEST AND FLORIDA1
W. K. McPherson and H. G. Witt2

CHAPTER 1
INTRODUCTION

Background
In colonial America, the livestock and poultry industry
was an integral part of an agrarian economy in which farmers
were largely self-sufficient. Livestock and poultry products
were produced and to a large extent consumed on the same
farms with the farmers themselves providing any transpor-
tation used in the production process.
The Industrial Revolution, together with the rapid in-
crease in specialization and trade that followed it, changed
the agrarian way of life. Late in the 18th century, farmers
began to specialize in raising crops both for sale and for use
in the production of livestock and poultry. Any livestock and
poultry not used on the farm was either sold directly to con-
sumers living in nearby towns and villages and/or to processors
who in turn sold their products in the urban markets. Those
who began to specialize in processing formed the nucleus from
which the livestock and poultry processing industry emerged.
For more than a century, the perishability of processed
livestock and poultry products made it necessary to locate as
near as possible to the ultimate consumers the plants in which
they were processed. Farmers delivered the live animals to
these plants. At first, cattle and hogs were driven to slaughter

1 This research was partially financed by a grant from the Southern
Railway System. The project is a cooperative undertaking of the Depart-
ments of Agricultural Economics, Animal Science, Poultry Science, and
Dairy Science. T. J. Cunha, Chairman, Animal Science Department;
R. H. Harms, Chairman, Poultry Science Department; J. F. Hentges,
Professor of Animal Science; G. E. Combs, Jr., Associate Professor of
Animal Science; M. R. Langham, Associate Professor of Agricultural
Economics; S. P. Marshall, Professor of Dairy Science of the Institute
of Food and Agricultural Science, University of Florida; and R. C.
Haldeman, Senior Transportation Economist, Southern Railway System,
have supplied much of the data and offered numerous suggestions and
constructive criticisms during the course of the work.
2 Agricultural Economist, and Research Assistant, respectively, Florida
Agricultural Experiment Stations.








houses and horse-drawn wagons were used to transport the
livestock and poultry products to market. During the first
half of the 19th century, river boats and barges were exten-
sively used in the assembly of livestock. In 1852, it became
possible to transport live animals to market more rapidly and
economically via a railroad car especially designed for the pur-
pose. This stimulated the growth of the livestock and poultry in-
dustry on the peripheries of the large population centers. Within
20 years, the perfection of the refrigerated railroad car made
it feasible to slaughter livestock and poultry near the locations
in which they were produced and ship the products to the
urban consumption centers. Chicago became the center of the
livestock industry. After World War I, paved highways and
the use of trucks resulted in a transportation cost structure
that encouraged the shipment of meat rather than live animals,
and a more efficient system of collecting and disseminating
market news made it economically feasible for livestock and
poultry processing firms to be located in the smaller cities of
the areas in which feedstuffs were produced.
Prior to 1940, the cost of shipping livestock and livestock
products from rural areas to urban population centers was less
than the difference between the cost of feed in the two areas.
At the same time, however, large quantities of feed grains
were being shipped from surplus grain producing areas to deficit
production areas around the major population centers and used
in the production of fluid milk and eggs-commodities for which
consumers were willing to pay a premium in the "fresh" form.
During the past quarter of a century, the spread between
the cost of shipping the feed utilized in the production of a
unit of livestock product and the cost of shipping the product
itself has narrowed. The expansion of the broiler industry in
deficit feed grain producing areas was a first physical mani-
festation of the phenomenon. No doubt the efficiency with
which broilers convert feedstuffs into meat and regional differ-
ences in labor costs were contributing factors, but this does
not negate the fact that it is still cheaper to ship the feedstuffs
needed to produce broilers than it is to ship dressed broilers
into these areas. More recently, farmers have begun to produce
fat cattle at locations considerably nearer the market than in
the past. The number of cattle fed in California, Arizona,
Colorado, Georgia, and Florida has increased rapidly during the
past decade.









Of the several inputs used in the production of livestock
and livestock products, capital and management are relatively
mobile and can be made available at approximately the same
cost in all parts of the country within a relatively short
period of time. On the other hand, the cost of feed which
represents from 50 to 80% of all production costs varies widely
from location to location. Likewise, the cost of shipping live-
stock products to the areas in which they are consumed varies
among locations. Consequently, the location at which live-
stock products can be produced most profitably is largely deter-
mined by the relationship that exists between the difference in
the cost of feed between alternative locations and the cost of
shipping the products between the same locations.

Scope
This study was designed to determine (1) the relationship
between the cost of shipping livestock products and the differ-
ence in the cost of the feed used in producing the animals in
surplus feed grain producing areas and Florida, and (2) the
economic impact that changes in these relationships might have
on the livestock industry in Florida.
In Chapter II, Florida's livestock and poultry industry is
described in terms of the markets for the products, the ability
of Florida farmers to produce the animals, and the structure
of the feed mixing industry. The methods used to calculate
the cost of dairy cattle, layer, broiler, beef cattle, and swine
rations in three Midwestern and three Florida locations are
outlined in Chapter III. A summary of the costs of shipping
the quantity of livestock products that can be produced from
a given quantity of feed between three Midwestern origins and
three Florida destinations is presented in Chapter IV. Differ-
ences in the cost of the least-cost formulations of the five
rations at the surplus grain producing area points of origin
and Florida destinations are compared in Chapter V to the
cost of transporting the livestock products between the same
locations. The summary and conclusions are presented in
Chapter VI.








CHAPTER II
FLORIDA'S LIVESTOCK AND POULTRY INDUSTRY

Consumption
The amount of livestock and poultry products consumed in
Florida is determined by the number of people living in the
state, their incomes, and their preferences for meat, milk, and
eggs. From 1940 to 1960, the population increased from 1.9
to 4.9 million-approximately 160%.3 During the same period,
the annual income per capital increased from $513 to $1,988
-more than 285%. By 1975, 8.2 million people receiving an
average income of $2,925 per person are expected to reside in
the state.
On a per capital basis, the consumption of beef and broilers
is expected to increase while the per capital consumption of
milk, pork, and eggs is expected to remain constant or to
decline slightly.
By 1975, 2,367 million pounds more livestock and poultry
will be consumed in the state than Florida farmers are expected
to be producing at that time (Table 1). For these products,
consumers living in Florida will pay the price prevailing in
the surplus feed grain and livestock producing areas plus either
(1) the cost of transporting live animals, (2) the difference
in the cost of feed required to produce the animals in the two
areas, or (3) the cost of shipping the finished product, depend-
ing upon which is lower. In this study, it is assumed that
the cost of shipping live animals over long distances will con-
tinue to be higher than the cost of shipping livestock and
poultry products between surplus and deficit feed grain pro-
ducing areas.4

Production
Five classes of livestock products are produced in com-
mercial quantities in Florida. The quantity of beef, milk,
eggs, and broilers produced annually has increased steadily

3 The projections appearing in this section of the report are based
on the DARE Report, Institute of Food and Agricultural Sciences, Uni-
versity of Florida, Gainesville, Florida, 1964.
4 This assumption is based on the hypothesis that transportation rates
will be based on the cost of service and that the cost of shipping live
animals is higher than the cost of shipping either concentrated feedstuffs
or livestock and poultry products.








since 1940 while swine production has remained about constant
(Table 1). During the same period, the annual income farmers
received for the sale of these products has increased even more
rapidly, partly because of the increased volume of production
and partly because prices have been rising (Table 2).
Of the five classes of animals used in the production of
livestock and poultry products, beef and dairy cattle consume
both forages and roughages as well as the more concentrated
feeds, such as grain and oilseed cakes. In contrast, swine,
broilers, and layers are raised almost entirely on the concen-
trated feedstuffs.
Since World War II, the land upon which most of the for-
ages, and to a limited extent roughages, are produced has been
fully stocked, primarily with beef cattle. The increase that
has taken place in the production of milk and beef or forage
and roughages during this period has been the result of (1)
increasing the amount of feedstuffs (primarily forages) pro-
duced on a slowly decreasing number of acres of pasture and
range land, (2) stocking these pasture and range lands with
higher quality animals, and (3) the use of more efficient
production techniques.
In the late 1940's, many ranchers were producing only
from 5 to 15 pounds of beef per acre on native range land.
By 1964, an average of approximately 40 pounds of live beef
cattle per acre was being produced on slightly less than 7
million acres of pastures and range. Whether or not the live-
stock industry expands as rapidly as anticipated will depend,
in part, upon how rapidly pasture and range land is improved.
At the present time, many ranchers who have improved
and fertilized their pastures and who are managing their herds
efficiently are producing from 200 to 600 pounds of beef per
acre, and on the muck soils as much as 1,000 pounds per acre.
Thus, it is clear that it is technically feasible to (1) produce
the forage needed to increase calf production, (2) condition
calves for the feedlot, and (3) produce grass-fed beef. The
extent to which this increase actually takes place will depend
to a large extent upon how active the market is within the state
for stocker and feeder cattle and calves.
The production of milk, eggs, broilers, hogs, and the
higher grades of beef cattle requires the use of large quanti-
ties of concentrated feedstuffs, corn, molasses, citrus pulp, oil-
seed cakes, etc. In 1960, livestock and poultry in the state













Table I.-Livestock and poultry products: Quantities consumed and produced in Florida, 1940 to 1960, and estimates for 1975.
(million pounds)

1940 1950 1960 1975 estimate rpl
Surplus (+)
Product Consump- Produc- Consump- Produc- Consump- Produc- Consump- Produc- or
tion tion Deficit tion tion Deficit tion tion Deficit tion tion deficit (-)

Fluid
milk 503 253 -250 762 524 -238 1,367 1,271 -96 2,254 1,800 -454
Beef
cattle 2 216 73 -143 356 207 -149 815 301 -514 1,672 700 -972
Swine 2 247 91 -156 339 89 -250 571 85 -486 884 86 -798
Broilers 2 6 2 -4 35 26 -9 161 23 -138 312 45 -267
Eggs 3 74 25 -49 132 44 -88 203 126 -77 280 404 +124


TOTALS 1,046 444 -602 1,624 890 -734 3,117 1,806 -1,311 5,402 3,035 -2,367

1Summary of data and estimates appearing in the DARE Report, Institute of Food and Agricultural Sciences, University of Florida, Gaines-
ville, 1964.
SLiveweight equivalent of animals produced.
5Weight of eggs = number of eggs x 1.47 lbs. per doz. or number of eggs x 0.1225 lbs.
12









Table 2.-Cash farm income from the sale of selected livestock products,
Florida, 1940, 1950, 1960, and estimated 1975.
Product 1940 1950 1960 1975
(estimated)
Milk (1,000 dollars) 10,300 36,900 87,200 111,000
Percent increase
from 1940 ..... 258 747 977
Beef Cattle (1,000) dollars 6,000 41,000 55,000 133,000
Percent increase
from 1940 ...... 583 817 2,116
Eggs (1,000 dollars) 4,073 13,967 35,277 96,297
Percent increase
from 1940 ..... 243 766 2,264
Swine (1,000 dollars) 5,000 15,000 13,000 13,000
Percent increase
from 1940 ..... 200 160 160
Broilers (1,000 dollars) 378 7,648 5,430 6,018
Percent increase
from 1940 ........ 1,923 1,337 1,492
TOTALS 25,751 114,515 195,907 359,315
Percent of increase
from 1940 ....... 345 661 1,295


consumed 1,125,517 tons of high energy feeds, whereas only
573,735 tons were produced (Table 3). During the same year,
livestock and poultry consumed 277,376 tons of high protein
feeds, 18,628 tons of which were produced in Florida. This
was a net deficit of 551,782 tons of high energy feeds and
258,748 tons of high protein feeds, a total of 810,530 tons of
feedstuffs.5
By 1975, Florida farmers are expected to increase the pro-
duction of high energy feeds by 1,079,039 tons to a total of
1,652,774 tons. If this takes place and if the livestock and
poultry production goals are achieved, there will still be a
deficit of 227,145 tons of high energy feeds. The production
of high protein feeds is also expected to increase to 57,427 tons
by 1975. However, by that time the deficit will be approxi-
mately 481,090 tons, almost twice the deficit in 1960.
These deficits, coupled with the fact that the cost of feed
represents more than half of the cost of producing livestock
and poultry, make it clear that the rate at which Florida's
livestock and poultry industry can expand in the future will

5DARE Report, Institute of Food and Agricultural Sciences, Univer-
sity of Florida, Gainesville, Florida, 1964.








CHAPTER II
FLORIDA'S LIVESTOCK AND POULTRY INDUSTRY

Consumption
The amount of livestock and poultry products consumed in
Florida is determined by the number of people living in the
state, their incomes, and their preferences for meat, milk, and
eggs. From 1940 to 1960, the population increased from 1.9
to 4.9 million-approximately 160%.3 During the same period,
the annual income per capital increased from $513 to $1,988
-more than 285%. By 1975, 8.2 million people receiving an
average income of $2,925 per person are expected to reside in
the state.
On a per capital basis, the consumption of beef and broilers
is expected to increase while the per capital consumption of
milk, pork, and eggs is expected to remain constant or to
decline slightly.
By 1975, 2,367 million pounds more livestock and poultry
will be consumed in the state than Florida farmers are expected
to be producing at that time (Table 1). For these products,
consumers living in Florida will pay the price prevailing in
the surplus feed grain and livestock producing areas plus either
(1) the cost of transporting live animals, (2) the difference
in the cost of feed required to produce the animals in the two
areas, or (3) the cost of shipping the finished product, depend-
ing upon which is lower. In this study, it is assumed that
the cost of shipping live animals over long distances will con-
tinue to be higher than the cost of shipping livestock and
poultry products between surplus and deficit feed grain pro-
ducing areas.4

Production
Five classes of livestock products are produced in com-
mercial quantities in Florida. The quantity of beef, milk,
eggs, and broilers produced annually has increased steadily

3 The projections appearing in this section of the report are based
on the DARE Report, Institute of Food and Agricultural Sciences, Uni-
versity of Florida, Gainesville, Florida, 1964.
4 This assumption is based on the hypothesis that transportation rates
will be based on the cost of service and that the cost of shipping live
animals is higher than the cost of shipping either concentrated feedstuffs
or livestock and poultry products.








CHAPTER II
FLORIDA'S LIVESTOCK AND POULTRY INDUSTRY

Consumption
The amount of livestock and poultry products consumed in
Florida is determined by the number of people living in the
state, their incomes, and their preferences for meat, milk, and
eggs. From 1940 to 1960, the population increased from 1.9
to 4.9 million-approximately 160%.3 During the same period,
the annual income per capital increased from $513 to $1,988
-more than 285%. By 1975, 8.2 million people receiving an
average income of $2,925 per person are expected to reside in
the state.
On a per capital basis, the consumption of beef and broilers
is expected to increase while the per capital consumption of
milk, pork, and eggs is expected to remain constant or to
decline slightly.
By 1975, 2,367 million pounds more livestock and poultry
will be consumed in the state than Florida farmers are expected
to be producing at that time (Table 1). For these products,
consumers living in Florida will pay the price prevailing in
the surplus feed grain and livestock producing areas plus either
(1) the cost of transporting live animals, (2) the difference
in the cost of feed required to produce the animals in the two
areas, or (3) the cost of shipping the finished product, depend-
ing upon which is lower. In this study, it is assumed that
the cost of shipping live animals over long distances will con-
tinue to be higher than the cost of shipping livestock and
poultry products between surplus and deficit feed grain pro-
ducing areas.4

Production
Five classes of livestock products are produced in com-
mercial quantities in Florida. The quantity of beef, milk,
eggs, and broilers produced annually has increased steadily

3 The projections appearing in this section of the report are based
on the DARE Report, Institute of Food and Agricultural Sciences, Uni-
versity of Florida, Gainesville, Florida, 1964.
4 This assumption is based on the hypothesis that transportation rates
will be based on the cost of service and that the cost of shipping live
animals is higher than the cost of shipping either concentrated feedstuffs
or livestock and poultry products.









Table 3.-Livestock feed utilization, Florida, 1960 and estimated 1975.
Energy Protein supplement
Product (tons) (tons)
1960 1975 1960 1975
(estimated) (estimated)
Milk 418,812 586,000 94,248 132,000
Beef cattle 338,700 588,800 108,900 201,000
Eggs 169,250 507,750 55,000 165,000
Hogs 178,955 172,169 15,694 14,649
Broilers 19,800 25,200 3,534 4,498
TOTALS 1,125,517 1,879,919 277,376 517,147
Source: DARE Report, Institute of Food and Agricultural Sciences, University of
Florida, Gainesville, Florida, 1964.


be greatly influenced by (1) the availability of feedstuffs pro-
duced in other parts of the nation, and (2) the cost of shipping
them to Florida.
This dependence of the Florida livestock and poultry in-
dustry upon feedstuffs shipped in from other parts of the
country has created attractive economic opportunities for firms
that specialize in purchasing feedstuffs and reselling them to
producers of livestock and poultry either in the form they
arrive in or as mixed feeds. This feed industry is now an
important component of the state's livestock and poultry in-
dustry.


Structure of the Livestock Feed Industry
The several hundred firms that comprise Florida's feed
handling and mixing industry have not been completely enu-
merated. Excluding retail feed dealers, these firms are classi-
fied as elevators, combination elevator and feed mixers, feed
mixers, feed ingredient manufacturers, and feedlots. The loca-
tion and classification of some of the larger elevators, feed
mixers, and feed ingredient manufacturers are shown in
Figures 1 and 2.
To determine some of the characteristics of the industry,
the following firms were interviewed: (1) a random sample
of firms known to be mixing feed; (2) all known commercial
grain elevators; and (3) a representative sample of the larger
beef cattle feedlots. Feed ingredient manufactures were not
interviewed; neither were dairy and poultry producers that
mix their own feed.









Elevators
The number of elevators in the state is not known, but
the six firms interviewed had a combined storage capacity of
888,000 bushels of grain (Table 4). Five of these firms were
located on railroad sidings. All of the elevators were built
more than five years ago, and none of the firms expect to expand
their physical plant within the next five years.

Feed Mixers
Of the 125 firms known to be mixing feeds, 59 produced
18,569 tons of feed, less than 3% of the total from July 1,
1963 through June 30, 1964 (Table 5). An additional 37 firms
produced a total of 80,763 tons. Thus, 76.8% of the firms in
the industry produced less than 16% of the mixed feed. On
the other hand, two firms, or 1.6% of the firms in the indus-
try, produced almost one-fourth of the mixed feed produced
in the state during the 12-month period, and five firms pro-
duced more than 40% of the total.
Thirteen of the firms engaged only in mixing feeds pro-
duced 325.5 thousand tons of mixed feed in 1964, more than
half of the total mixed in the state during this period. The
average normal storage capacity of the 13 firms was approxi-
mately 7,500 bushels of grain and 300 tons of other feed in-
gredients (Appendix Table 1).6
Twelve of the 13 mixers maintained an inventory of both
cottonseed and soybean oil meal, seven had a supply of animal
protein on hand, and five carried an inventory of other oilseed
meals and grain proteins. The relatively large inventory of
"other" feed ingredients carried by all mixers, together with
the oilseed cakes and animal and grain protein on hand, sug-
gests that these firms are prepared to mix a wide variety of
formulas and/or that the formulas they do mix call for a
relatively large number of ingredients. On the average, these
feed mixers carried a sufficiently large inventory of feed in-
gredients to operate nine days and enough grain to operate
seven days. However, one firm maintained only a three-day
inventory of both ingredients and grain, while another could
operate 25 days without replenishing its supply of ingredients.
Every feed mixer interviewed carried an inventory of mixed

SThe Department of Agricultural Economics, Institute of Food and Agricultural
Sciences, University of Florida, Gainesville, Florida, 32601, will supply copies of the
Appendix Tables upon request.









Elevators
The number of elevators in the state is not known, but
the six firms interviewed had a combined storage capacity of
888,000 bushels of grain (Table 4). Five of these firms were
located on railroad sidings. All of the elevators were built
more than five years ago, and none of the firms expect to expand
their physical plant within the next five years.

Feed Mixers
Of the 125 firms known to be mixing feeds, 59 produced
18,569 tons of feed, less than 3% of the total from July 1,
1963 through June 30, 1964 (Table 5). An additional 37 firms
produced a total of 80,763 tons. Thus, 76.8% of the firms in
the industry produced less than 16% of the mixed feed. On
the other hand, two firms, or 1.6% of the firms in the indus-
try, produced almost one-fourth of the mixed feed produced
in the state during the 12-month period, and five firms pro-
duced more than 40% of the total.
Thirteen of the firms engaged only in mixing feeds pro-
duced 325.5 thousand tons of mixed feed in 1964, more than
half of the total mixed in the state during this period. The
average normal storage capacity of the 13 firms was approxi-
mately 7,500 bushels of grain and 300 tons of other feed in-
gredients (Appendix Table 1).6
Twelve of the 13 mixers maintained an inventory of both
cottonseed and soybean oil meal, seven had a supply of animal
protein on hand, and five carried an inventory of other oilseed
meals and grain proteins. The relatively large inventory of
"other" feed ingredients carried by all mixers, together with
the oilseed cakes and animal and grain protein on hand, sug-
gests that these firms are prepared to mix a wide variety of
formulas and/or that the formulas they do mix call for a
relatively large number of ingredients. On the average, these
feed mixers carried a sufficiently large inventory of feed in-
gredients to operate nine days and enough grain to operate
seven days. However, one firm maintained only a three-day
inventory of both ingredients and grain, while another could
operate 25 days without replenishing its supply of ingredients.
Every feed mixer interviewed carried an inventory of mixed

SThe Department of Agricultural Economics, Institute of Food and Agricultural
Sciences, University of Florida, Gainesville, Florida, 32601, will supply copies of the
Appendix Tables upon request.



















... -

0 ai Q











0 r ,O 0
0I I 1 0








9 e
oo




























Legend:

0 1,000 to 10,000 tons
* More than 10,000 tons

Source: Feed Inspection Division, Florida Department of Agricul-
ture, Tallahassee, Florida.


Figure 1.-Feed mixers in Florida: location and size, 1963 1964.
0 More than 10,000 tons

















l -i .i i" ...... ,,.^-- .7..""'' .......... -?-'-' ) o O





CoNI Fay TiOit'





S ieo ,
"O
.- o.o .-. .



















Legend:
By-product feed ingredient manufacturers (citrus pulp, molasses, meat
and poultry by-products, peanut meal, etc.).
O Less than 1,000 tons annually
1,000 to 10,000 tons annually
* More than 10,000 tons annually
Grain Elevators
o Grain elevators, all sizes
Source: Feed Inspection Division, Florida Department of Agricul-
ture, Tallahassee, Florida.

Figure 2.-By-product feed ingredient manufacturers and commercial grain
elevators: location and size of ingredient manufacturers, 1963- 1964.









Table 4.-Summary of feedstuffs and feed mixed and/or handled by 34 firms, Florida, 1964.

Feed Combination
mills feed mills
Item Unit & elevators Elevators Feedlots Total

No. plants in sample 13 7 6 8 34

Total volume of feed Tons 325,469 31,549 ..---. 61,372 418,390

Total grain storage
capacity
Bulk Bu 99,400 409,500 888,000 401,000 1,797,900
Total Bu 100,400 519,500 888,000 428,500 1,936,400

Normal inventory of
Complete feeds Tons 1,187 170 0...-- 0 1,357
Soybeans oil meal Tons 685 72 ..--- 0 757
Cotonseedmeal Tons 683 140 -......- 160 983
Other oilseed meal Tons 190 30 --... 0 220
Animal protein Tons 149 14 ....... 10 163
Grain Tons 33 29 --...-... 0 62
other feedstuffs Tons 3,856 430 ....... 1,000 5,286

Number of days
supply of
Grain
Jan. 1, 1965 Days 7 35 ...... 20 11
Jan. 1, 1963 Days 7 34 ---...... 40 14
Other feedstuffs
Jan. 1, 1965 Days 9 14 ---. 15 10
Jan. 1, 1963 Days 9 14 -.....- 21 11












Feed Combination
mills feed mills
Item Unit & elevators Elevators Feedlots Total

Volume of complete
feeds mixed
Broiler Tons 517 225 ........--- --742
Layer Tons 85,014 8,045 --.-. ...... 93,059
Other poultry Tons 5,030 -........ .......- ..- 5,030
Beef Tons 34,063 14,089 ......---. 16,372 109,524
Dairy Tons 181,789 4,860 ....... --. 186,649
Swine Tons 1,418 3,547 ... ......... 4,965
Other livestock Tons 10,690 783 -...-...-. 11,473

Plants located on
oC rail siding No. 13 3 5 1 22

Plants built within
Past five years No. 2 2 0 2 6

Plants planned in
next five years No. 5 1 0 1 7









Table 5.-Feed mixers: number, total volume and average volume of feed
handled by selected size groups, July 1963 June 1964.
No. Percent Total Percent of Average
Size of Firm firms of firms volume total volume volume
Less than 1,000 tons 59 47.2 18,569 2.9 315
1,000 5,000 tons 37 29.6 80,763 12.9 2,183
5,001 10,000 tons 11 8.8 73,023 11.6 6,639
10,001 25,000 tons 13 10.4 203,703 32.4 15,669
25,00 50,000 tons 3 2.4 99,906 15.9 33,302
Over 50,001 tons 2 1.6 153,305 24.4 76,652

Totals 125 100.0 629,269 100.0 134,760
Source: Feed Inspection Division. Florida Department of Agricul-
ture, Tallahassee, Florida.


feed. The average amount was 91.3 tons, but this quantity
varied among firms from 10 to 350 tons. Eleven of the 13
firms mixed an average of 16,600 tons of dairy feed and nine
firms manufactured beef cattle, layer, and/or other kinds of
feed in 1964.
All of the feed mills were located on rail sidings. Two
mills were built within the past five years, and five expect to
build new plants within the next five years.


Combination Feed Mixers and Elevators
The seven combination feed mills and elevators had an
average of about four times as much bulk storage capacity as
the feed mills but mixed on an average only one-tenth of the
volume of feed during the year (Appendix Table 2). These
firms carried approximately the same feed ingredients as the
commercial mixers but a substantially smaller quantity of each.
However, the quantity of feed ingredients they kept on hand
was sufficiently large to permit the plant to operate longer
than the larger feed mills. The fact that the inventories carried
by combination feed mill elevator firms permit them to operate
over a relatively long period of time may be due to the large
quantities they are required to purchase to obtain the ingre-
dients at the lowest possible price.
All of these firms mixed beef cattle feed and four mixed
layer and dairy feeds. The firm mixing the largest amount
of feed was substantially larger than the smallest commercial
feed mixer.








Cattle Feedlots
Eight of the feedlots mixed an average of more than 7,500
tons of feed during the 12 months, ranging from 360 tons to
33,762 tons (Appendix Table 3). The smallest bulk storage
capacity was 7,500 bushels and the largest 225,000 bushels.
The average quantity of grain bulk storage was 57,300 bushels,
approximately the same amount as the combination elevator-
feed mixers. All of these firms carried an inventory of cotton-
seed meal and seven of the eight had other feedstuffs available.
On January 1, 1965 the feedlots were carrying a 20-day supply
of grain, less than half the supply available on the same date
in 1963. -
None of the feeds mixed by locally owned mills were being
formulated by computers. In at least one instance, however,
the formulas mixed by a mill associated with a feed mixing
firm operating at the national level were formulated in the
national office with the aid of computers and an extensive
bank of data on the price and composition of alternative feed
ingredients.

Prospects for the Future
The rate at which Florida's livestock industry will grow
in the future depends almost entirely upon the availability of
feed at prices producers can afford to pay, while earning a
reasonable profit. Florida farmers are increasing their output
of feedstuffs, but not rapidly enough to satisfy the needs of
an expanding livestock industry that is already utilizing more
than twice as much feed as is being produced in the state.
If the difference between the costs of the feed used in
producing a pound of livestock products is less than the cost of
shipping the pound of product between surplus grain producing
areas and Florida, the livestock industry and the industry that
supplies its feed will continue to grow. On the other hand,
if the cost of shipping the product is less than the differences
in the cost of the feed used in producing it, a larger part of
the state's requirements for livestock products will be produced
elsewhere.
In the remainder of this report, attention will be focused
directly on the relationship that existed between the cost of
five livestock rations in the Midwest and Florida and the cost
of shipping livestock products between these areas.








Cattle Feedlots
Eight of the feedlots mixed an average of more than 7,500
tons of feed during the 12 months, ranging from 360 tons to
33,762 tons (Appendix Table 3). The smallest bulk storage
capacity was 7,500 bushels and the largest 225,000 bushels.
The average quantity of grain bulk storage was 57,300 bushels,
approximately the same amount as the combination elevator-
feed mixers. All of these firms carried an inventory of cotton-
seed meal and seven of the eight had other feedstuffs available.
On January 1, 1965 the feedlots were carrying a 20-day supply
of grain, less than half the supply available on the same date
in 1963. -
None of the feeds mixed by locally owned mills were being
formulated by computers. In at least one instance, however,
the formulas mixed by a mill associated with a feed mixing
firm operating at the national level were formulated in the
national office with the aid of computers and an extensive
bank of data on the price and composition of alternative feed
ingredients.

Prospects for the Future
The rate at which Florida's livestock industry will grow
in the future depends almost entirely upon the availability of
feed at prices producers can afford to pay, while earning a
reasonable profit. Florida farmers are increasing their output
of feedstuffs, but not rapidly enough to satisfy the needs of
an expanding livestock industry that is already utilizing more
than twice as much feed as is being produced in the state.
If the difference between the costs of the feed used in
producing a pound of livestock products is less than the cost of
shipping the pound of product between surplus grain producing
areas and Florida, the livestock industry and the industry that
supplies its feed will continue to grow. On the other hand,
if the cost of shipping the product is less than the differences
in the cost of the feed used in producing it, a larger part of
the state's requirements for livestock products will be produced
elsewhere.
In the remainder of this report, attention will be focused
directly on the relationship that existed between the cost of
five livestock rations in the Midwest and Florida and the cost
of shipping livestock products between these areas.









CHAPTER III
THE COST OF LIVESTOCK RATIONS IN THE MIDWEST
AND FLORIDA

Animal nutritionists write the specifications for livestock
rations 7 (or diets) in terms of the kind and amount of nutrients
(energy, proteins, or amino acids, fiber, fat, etc.) they should
contain.8 These specifications vary widely among the several
species, classes, and weights of animals. Livestock producers
and feed mixers are continually striving to formulate rations
(diets) that will meet these specifications at the lowest possible
cost. The nutrient specifications for the five classes of animals
in this study appear in Table 6.
The nutrients called for in these specifications are available
in a large number of products, both agricultural and non-agri-
cultural. In the industry, commodities containing nutrients are
commonly called feedstuffs, or feed ingredients. Animal scien-
tists have identified and determined the quantity of the nutritive
attributes contained in a large number of feedstuffs, but the
task is far from complete. This is partly because of the very
recent identification of some of these attributes and partly be-
cause of the cost of conducting nutritional research, especially
on large animals. For example, until recently the total digestible
nutrients content of a feedstuff was considered to be a relatively
accurate measure of its nutritional value. Animal nutritionists
have now learned there is no single measure of the nutritional
value of a feedstuff that is satisfactory for all purposes, and other
measures such as net energy, metabolizable energy, maintenance
energy, productive energy, digestible protein, individual amino
acids, and fat contents are much more useful in formulating
rations for specific purposes. Furthermore, any given feedstuff
varies in the amount of nutrients it makes available for each
of the several classes, weights, sexes, and grades of livestock.

7 In the livestock and poultry industry, the word ration generally
means the kind and amount of each of the feedstuffs (feed ingredients)
in a mixture of feedstuffs that is fed to animals. Technically this is not
correct. The composition of a feed mixture is more precisely defined as
a diet and the amount of this diet (mixture of feedstuffs) that is fed
in a 24-hours period is a ration. However, in an effort to help members
of the industry interpret the results of this study, the word ration is
used throughout this bulletin to identify the composition of a feed mixture.
8 National Academy of Sciences-National Research Council. Nutrient
Requirements of Domestic Animals, Washington, D.C. Poultry 1960, Swine
1964, Dairy Cattle 1950, Beef Cattle 1958.








Although steady progress is being made on determining the
nutritive values for the several feedstuffs for specific classes
and grades of animals, the need for more accurate and com-
plete data is becoming more urgent as price competition in
the feedstuff and livestock markets intensifies. This is especially
true for the nutrients that are available in roughages that are
consumed by beef and dairy cattle, i.e., ruminant animals.
The nutrient content of feedstuffs varies widely from
product to product with some containing several nutrients and
others only one.9 Some feedstuffs have relatively stable nutrient
compositions while the quantities of nutrients in others vary
widely from variety to variety, manufacturer to manufacturer,
and lot to lot. In the case of corn, the energy and protein
content varies within narrow limits, whereas the composition
of different lots of hay vary as much as 50% from the average.
In this study the average composition of feedstuffs is used.
This practice is followed by some feed mixers, but some of
the larger firms find it desirable to make an analysis of each
lot of an ingredient purchased and take this into consideration
when formulating the rations.
From the large number of feed ingredients currently avail-
able, it is theoretically possible to formulate any given livestock
or poultry ration in a number of different ways and still
achieve the same feed efficiency. Whether or not animals will
convert the numerous possible formulations of the ration into
livestock products with equal efficiency depends upon (1) how
accurately the nutrient requirements of animals that are raised
for specific purposes are known, (2) the accuracy of the data
on the amount of each nutrient available in each feedstuff
when mixed with other feedstuffs, (3) the response of animals
of different classes, sexes, and weights to each nutrient, and
(4) the palatability of the feed mixture.
In the past, the task of calculating the amount of each
feed ingredient required to meet the nutritional specifications
of any given ration was both difficult and time consuming.
Consequently, there was a tendency to describe rations in
terms of the ingredients they contained rather than the
nutrient requirements of the animals. For example, livestock
feeders described (and many still do) a typical steer ration

9 National Academy of Sciences-National Research Council. Joint
United States-Canadian Tables of Feed Composition Publication 1232,
Washington, D.C., 1964.








Table 6.-Tentative specifications for broiler, layer, steer finisher, 20% dairy and hog finisher rations.
Broiler Steer 1 Dairy 2 Hog
Requirement Unit finisher Layer finisher 20% finisher
Minimum net energy Cal/lb. 680 740
Minimum productive energy Cal/lb. 1000. 900. -
Minimum crude protein % 11.5 20.0 13.0
Minimum digestible protein % 9.0 -
Minimum arginine % 1.03 .50
Minimum lysine % 1.03 .625 .66
Minimum methionine % .38 .299 .22
Minimum methionine plus cystine % .725 .509 .44
Minimum trypthopan % .185 .148 .11
Minimum glycine % .800 .200
Maximum crude fat % 0 0
Maximum crude fiber % 4.0 6.0 12.0 5.0
Minimum calcium % .8 2.75 .5 .3 .48
Minimum total phosphorus % .3 .4 .44
Minimum available phosphorus % .4 .6
Minimum niacin Mg/lb. 20.0 15.0 5.0
Minimum riboflavin Mg/lb. 2.5 1.6 1.0
Minimum pantothenic acid Mg/lb. 6.5 3.0 4.5
Minimum vitamin B12 Mcg/lb. .4 5.0 5.0
Minimum choline Mg/lb. 650. 450.
Minimum vitamin A activity MIU/lb. .003 .004
Minimum xanthophyll Gm/lb. .90 .80
Weight Lbs. 100.0 100.0 100.0 100. 100.0
Minimum added fat % 1.0 2.0
Maximum added fat % 15.0 15.0 5.0 s 4.0 10.0
Trace mineral mix % .15 .10 .10
Salt % .4 .35 0.5 1.0 .50
Minimum synthetic vitamin A MIU/lb. .0015 .002 .001 .002 .001
Maximum fish meal % 7.5 5.0 7.5








Broiler Steer 1 Dairy 2 Hog
Requirement Unit finisher Layer finisher 20% finisher


Minimum corn
Maximum meat meal
Maximum poultry by-product meal
Miximum feather meal
Minimum metabolizable energy
Maximum cottonseed meal 41%
Maximum molasses, cane
Maximum urea
Minimum alfalfa meal 17%
Minimum crude fiber
Maximum crude protein
Maximum calcium
Maximum total phosphorus
i- Maximum yellow hominy
Maximum dried whey
Maximum peanut meal
Maximum corn gluten meal
Maximum blood meal
Maximum brewer's yeast
Maximum fish solubles
Maximum wheat middlings
Maximum rice bran
Maximum alfalfa meal
Maximum citrus pulp
Maximum corn gluten feed


% 10n inn


%
%
%
Cal/lb.
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%


10.0
2.0












35.0
35.0

33.0
25.0


5.0
5.0
5.0
1300.
10.
5.0



17.0
.80
.65
20.0
5.0
10.0
5.0
3.0
5.0
2.5
20.0
20.0
2.5


1 Tentative estimates for a non-pelleted, self-fed, "all concentrate" diet for yearling steers in a moderate environment. At least 15% of diet re-
stricted to bulky ingredients. Least-cost formulations based on these specifications have not been tested in cattle experiments. The nutritional speci-
fications used generally conform with the National Research Council's recommended nutrient allowances.
2The 20% dairy feed mixture specifications are incomplete in that the roughage intake has not been taken into consideration.
I Several animal nutritionists believe that 5% added fat should be the maximum permissible. From 5 to 6% added fat appeared in several least-
cost formulations. Many -animal nutritionists would permit these quantities of added fat in steer rations.











Table 7.-Nutrient specifications, alternative formulations, and costs of a typical steer ration.


Nutrient specification of steer ration

Required
Nutrient quantity
Net energy 680 Cal/lb.
Crude energy 11.5 %
Digestible protein 9.0 %
Crude fiber 8.0 12.0 %
Calcium .5- .9 %
Total phosphorus .3- .5 %
Salt (trace) .5 Ibs.
Vitamin A .001 MIU/lb.






Cost of eight formulations of the steer
ration in Florida
Formulation
Typical Least-Cost Difference


April 1962
Nov. 1962
April 1963
Nov. 1962


$2.35
2.37
2.61
2.31


$1.95
1.94
2.16
2.15


$ .40
.43
.45
.16


Typical and least cost formulations of steer ration from
feedstuffs available in Florida

Least cost formulation
Typical April Nov. April Nov.
Ingredients formulation 1962 1962 1963 1963


Wheat std. middlings
Stabilized animal fat
Rice bran
Ground corn cobs
Urea
Citrus pulp
Alfalfa meal
Cane Molasses
Vitamin A
Salt
Milo (ground)
Dicalcium phosphate
Peanut hay
Limestone
Meat & bone scrap
Peanut oil meal
Corn gluten feed
Ground snap corn
Soybean meal, 44%
Steamed bone meal
Salt-vitamins-minerals
TOTALS


5.0

Added


27.6
2.5
10.2
7.4
1.0
35.8
5.0
10.0
Added
.5
53.2


.8
1.0
27.4
5.0
2.9
Added
.5
53.2
.5
8.7


2.0

28.7
1.0

5.0

Added
.5
59.7


.4
2.3
.4


.6


1.0

5.0

Added
.5

1.4
1.0


82.75 ...--- --- 79.8
10.0 -........ .
1.25--- ---....
1.0- -- --- --.
100.00 100.00 100.00 100.00 100.00








in terms of the amount of corn, soybean meal, etc. it contains
rather than its nutrient content. (See Table 7 for a typical
steer ration.)
The use of electronic computers now makes it possible
to determine quickly and accurately the formulation and cost
of the cheapest ration that meets any given set of nutrient
specifications under any given feed ingredient price structure,
that is, the cost of the least cost formulation of a ration at
any given time and place. Feed mixers and poultry producers
began experimenting with computer formulated rations about
a decade ago and have developed the techniques that are now
being used extensively, especially by large vertically integrated
firms. Beef cattle, dairy cattle, and swine producers are be-
ginning to use the same techniques. The extent to which
computer formulated rations will be utilized in feeding rumi-
nant animals depends largely upon how rapidly the nutrient
specifications of rations can be established and the nutrient
content of all of the alternative feed ingredients determined.
In selecting the nutrient specifications of the rations used
in this study, it became very apparent that there are not yet
available many of the data on the nutrient composition of the
alternative feedstuffs needed to formulate the more complex
rations. This was especially true in the case of beef and dairy
cattle rations. The following examples illustrate the kind of
problems that are encountered in the formulation of ruminant
animal rations.
It has been amply demonstrated that feedstuffs make one
amount of energy available to animals for the maintenance of
body weight and another amount -available for the production
of additional weight. The only reason the specifications for
the ration are not written in terms of the amount of main-
tenance energy and productive energy required is because the
maintenance and productive energy values of the feedstuffs
that might be fed to beef cattle have not yet been determined
for a large number of the feedstuffs commonly use in Florida.
Roughages, silage, haylage, and similar feedstuffs are not
considered in the formulation of rations because accurate data
on their nutrient content are not available. The wide varia-
tions in the composition of various lots of these feedstuffs
makes it difficult and often impossible to use them efficiently.
However, this does not bias the result of the study appreciably
since this type of feedstuffs seldom appears in acceptable form-








ulations of the five nutrient specifications examined in this
study. In the formulation of these rations, 49 of the most
commonly used concentrated feed ingredients are considered
(Appendix Table 4.)
Price quotations were obtained for the 49 feedstuffs at
three locations in the surplus grain producing area, Kansas
City, Missouri; East St. Louis, Illinois; and Cincinnati, Ohio;
and three Florida locations, Jacksonville, Tampa and Port
Everglades for each month of the period from April 1964
through March 1965 (Appendix Tables 5a, b, c, d, e, and f).
These locations were selected because (1) Kansas City, Mis-
souri; East St. Louis, Illinois; and Cincinnati, Ohio, are located
on the periphery of the nation's major surplus grain producing
area and are transportation centers through which a large
quantity of feedstuffs move, and (2) Jacksonville, Tampa, and
Port Everglades, Florida, are located in densely populated areas
of a deficit grain producing state. Livestock and livestock
products are being produced in the agricultural areas sur-
rounding all six locations.
The problems encountered in obtaining reliable informa-
tion on the price of feedstuffs provide much insight into one
of the reasons Florida livestock producers find it difficult to
compete with Midwestern producers. It was relatively easy
to derive the market price of feedstuffs in the Midwest where
feedstuff prices are collected and disseminated by many agen-
cies, both public and private. In sharp contrast, the price of
many of the feedstuffs Florida livestock might use were diffi-
cult or sometimes impossible to obtain from dealers. These
feedstuffs included such products as milo, shorts, cottonseed
and soybean oil cake, and citrus pulp. For these commodities,
the prices used were the prices quoted at a market center in
the surplus producing area plus the cost of transporting them
to Florida destinations plus a handling charge. Only the larg-
est producers can afford to consider all of their alternatives
in a market that is as imperfect as the feedstuff market in
Florida. The competitive position of Florida's livestock in-
dustry will improve as the livestock industry grows and as more
people request both private and public price reporting services
to develop a more effective feedstuff price reporting system.
Using data on the nutrient requirements of the rations
and on the price and composition of alternative feedstuffs,








linear programming techniques 10 were used to calculate the
cost and formulation of the least cost formulation of each
ration for each month of the 12-month period, April 1964
through March 1965. The potential differences in feed cost
between the surplus feed grain producing areas and Florida
destinations were then determined by subtracting the cost of
the least cost formulation of each of the five rations at the
three surplus areas points of origin from the cost of the
least cost formulation of the comparable ration at each Florida
destination. These differences, which are referred to as Feed
Cost Differentials (FCD), are presented in Appendix Tables
14, 15, 16, 23, 24, 25, 32, 33, 34, 41, 42, 43, 50, 51, and 52
and are analyzed in Chapter V.
The formulations of the least cost rations compared in
this study have not been subjected to feeding tests. The as-
sumption that they will produce livestock products with equal
efficiency rests squarely on the assumption that the nutrient
requirements of animals are known with sufficient precision
to establish a ration regardless of how it is formulated, and
that the analysis of alternative feed ingredients is accurate.
In the poultry segment of the livestock industry, both assump-
tions are sufficiently well satisfied to enable feed mixers to
change the formulation of a ration to achieve the lowest possi-
ble cost without testing each new formulation. On the other
hand, more information is needed on the nutrient requirements
of large animals and on the extent to which the nutrients in
specific feedstuffs are available to ruminant animals before
beef and dairy cattle rations can be programmed in this man-
ner. Nevertheless, some feedlots are already using program-
ming techniques to formulate beef cattle rations.

10 L.P. 90 Usage Manual, A Comprehensive Computing System for
Linear Programming. CEIR Washington, 1963, 2d edition.








CHAPTER IV
THE COSTS OF TRANSPORTING LIVESTOCK, POULTRY
PRODUCTS, AND MIXED FEEDS BETWEEN
THE MIDWEST AND FLORIDA

To compare the cost of shipping livestock products between
surplus and deficit grain producing areas with the difference
in the cost of producing them at those locations, it was also
necessary to determine (1) the cost of shipping the product
and (2) the efficiency with which animals convert feed into
livestock products.

Transportation Costs
During the 12-month period covered in this study, beef,
pork, and fresh eggs could be transported from Midwest origins
to Florida destinations most economically via truck trailers
loaded on flat cars (TOFC) (Plan III, Two Trailer). On
the other hand, frozen eggs and milk could be transported much
more economically by truck (Appendix Tables 6, 7, and 8).

Feed Efficiency
The rate at which the animals convert feed into the product
that is shipped, i.e., feed efficiency, varies both among the
animals that produce each product and among the products.
Area to area variations in the quality of the animals will
be reflected in variations in feed efficiency. In surplus feed
grain producing areas, it is quite likely that the average feed
efficiency of the beef cattle, dairy cattle, and hog populations
at the present time is higher than in Florida, primarily be-
cause a higher percentage of the animals are of the type that
can utilize feed efficiently. However, it is possible to produce
animals that utilize feed equally efficiently in both areas.
Feeding efficiency also varies with climatic conditions,
especially temperatures. At very high or very low tempera-
tures, feeding efficiency falls off rather sharply, but it is be-
lieved to remain relatively constant between 450 and 800F.
Since the mean temperature in both areas lies within this
range, it is assumed that the location in which animals are
produced will not alter their feed efficiency appreciably.1 Fur-
11 Few data are available on feed efficiency at alternative locations.
A paper entitled "Temperature and Feed Conversion" by R. J. Armich
and J. C. Purcell (Journal of Farm Economics, Vol. 26, No. 5, pp. 1227)








CHAPTER IV
THE COSTS OF TRANSPORTING LIVESTOCK, POULTRY
PRODUCTS, AND MIXED FEEDS BETWEEN
THE MIDWEST AND FLORIDA

To compare the cost of shipping livestock products between
surplus and deficit grain producing areas with the difference
in the cost of producing them at those locations, it was also
necessary to determine (1) the cost of shipping the product
and (2) the efficiency with which animals convert feed into
livestock products.

Transportation Costs
During the 12-month period covered in this study, beef,
pork, and fresh eggs could be transported from Midwest origins
to Florida destinations most economically via truck trailers
loaded on flat cars (TOFC) (Plan III, Two Trailer). On
the other hand, frozen eggs and milk could be transported much
more economically by truck (Appendix Tables 6, 7, and 8).

Feed Efficiency
The rate at which the animals convert feed into the product
that is shipped, i.e., feed efficiency, varies both among the
animals that produce each product and among the products.
Area to area variations in the quality of the animals will
be reflected in variations in feed efficiency. In surplus feed
grain producing areas, it is quite likely that the average feed
efficiency of the beef cattle, dairy cattle, and hog populations
at the present time is higher than in Florida, primarily be-
cause a higher percentage of the animals are of the type that
can utilize feed efficiently. However, it is possible to produce
animals that utilize feed equally efficiently in both areas.
Feeding efficiency also varies with climatic conditions,
especially temperatures. At very high or very low tempera-
tures, feeding efficiency falls off rather sharply, but it is be-
lieved to remain relatively constant between 450 and 800F.
Since the mean temperature in both areas lies within this
range, it is assumed that the location in which animals are
produced will not alter their feed efficiency appreciably.1 Fur-
11 Few data are available on feed efficiency at alternative locations.
A paper entitled "Temperature and Feed Conversion" by R. J. Armich
and J. C. Purcell (Journal of Farm Economics, Vol. 26, No. 5, pp. 1227)








CHAPTER IV
THE COSTS OF TRANSPORTING LIVESTOCK, POULTRY
PRODUCTS, AND MIXED FEEDS BETWEEN
THE MIDWEST AND FLORIDA

To compare the cost of shipping livestock products between
surplus and deficit grain producing areas with the difference
in the cost of producing them at those locations, it was also
necessary to determine (1) the cost of shipping the product
and (2) the efficiency with which animals convert feed into
livestock products.

Transportation Costs
During the 12-month period covered in this study, beef,
pork, and fresh eggs could be transported from Midwest origins
to Florida destinations most economically via truck trailers
loaded on flat cars (TOFC) (Plan III, Two Trailer). On
the other hand, frozen eggs and milk could be transported much
more economically by truck (Appendix Tables 6, 7, and 8).

Feed Efficiency
The rate at which the animals convert feed into the product
that is shipped, i.e., feed efficiency, varies both among the
animals that produce each product and among the products.
Area to area variations in the quality of the animals will
be reflected in variations in feed efficiency. In surplus feed
grain producing areas, it is quite likely that the average feed
efficiency of the beef cattle, dairy cattle, and hog populations
at the present time is higher than in Florida, primarily be-
cause a higher percentage of the animals are of the type that
can utilize feed efficiently. However, it is possible to produce
animals that utilize feed equally efficiently in both areas.
Feeding efficiency also varies with climatic conditions,
especially temperatures. At very high or very low tempera-
tures, feeding efficiency falls off rather sharply, but it is be-
lieved to remain relatively constant between 450 and 800F.
Since the mean temperature in both areas lies within this
range, it is assumed that the location in which animals are
produced will not alter their feed efficiency appreciably.1 Fur-
11 Few data are available on feed efficiency at alternative locations.
A paper entitled "Temperature and Feed Conversion" by R. J. Armich
and J. C. Purcell (Journal of Farm Economics, Vol. 26, No. 5, pp. 1227)








thermore, feeding tests indicate that when comparable animals
are used at different times and locations, it is possible to
achieve the same level of feed efficiency in Florida as in the
Midwest.
The efficiency with which animals convert feed into five
classes of livestock products appear in Table 8. These feed
efficiencies are based on average data and may not reflect the
efficiency that may be obtained in any specific operation. In-
stead, they indicate the feed efficiencies that would have pre-
vailed if feed costs had been reduced to a minimum and if the
same feed'efficiency can be achieved in each of the geographic
areas studied.

Method of Presenting Comparisons
The cost of transporting between two points the amount
of a commodity produced from 100 pounds of feed was cal-
culated by dividing the transportation rate (in cents per 100
pounds) on any given product by the amount of feed (in hun-
dredweights) required to produce 100 pounds of product. This
statistic is called the Feed Cost Equivalent of the Transpor-
tation rate, or the FCETR. The FCETR's for milk, fresh and
frozen eggs, broilers, beef, pork carcasses, and primal cuts
of pork by mode of transportation are shown in Appendix
Tables 9, 10, 11, and 12.
In those instances in which the FCETR is less than the
transportation rate, it is possible that the least cost formulation
of the ration in the Midwest plus the cost of transportation
into Florida in the form of mixed feed could be less than the
least cost formulation of the same ration in Florida. To deter-
mine whether or not this is true, it is necessary to compare
the feed cost differential between locations in the Midwest and
Florida with the cost of shipping the feed mixed in the Mid-
west into Florida. The cost of shipping mixed feeds between
origins in the Midwest and Florida destinations are shown in
Appendix Table 13.


has shown that the optimum feed efficiency for swine is approximately
60 and that it falls off rapidly below 45 and 80F. Inasmuch as the
maximum temperatures in the Midwest and Southeast are approximately
the same, and the minimum temperatures in the Southeast are from
10 to 45 above the minimum temperatures in the Midwest, it is quite
possible that feed efficiencies in the South could be higher than in the
Midwest.









Table 8.-Quantities of feed
livestock products.


required to produce 100 pounds of selected


Feed required
to produce Weight of Product
Livestock 100 pounds of shipped as % of
product Form product product on animal
(pounds) (%)
Milk Bulk 40.51 100

Eggs Fresh 255.0 2 100
Frozen 304.0 s 84

Broilers Carcass
(ice pack) 280.0 4 75

Beef Carcass 400.0 5 60

Pork Carcass 377.0 6 70
Primal cuts
and trim 528.0 7 50


1 .405 lbs. feed/lb. of milk x 100=40.5 lbs. feed/100 lbs. of milk
(4% butter fat, body maintenance met from other sources)
S4.0 Ibs. feed/dozen eggs x 30 dozen x 100
= 255 Ibs. feed/lO0 Ibs. eggs
47 (weight of 30 dozen cases)
B 4.0 Ibs. feed/dozen eggs x 30 x 100
S4.0 lbs. eed/dozen eggs x 3doz x 100 304 lbs. feed/l00 lbs. frozen eggs
39.6 Ibs. frozen eggs/3 dozen case
S2.1 Ibs. feed/lb. of broiler x 100
2.1 bs. feed/bofbroilerx100= 280 lbs. feed/100 lbs. dressed broiler
.76 (dressing percent)
S8.0 Ibs. feed/lb. grain in feedlot x 300 lbs. grain x 100 4 .
-= 400 Ibs. feed/100 Ibs. of carcass
1,000 (liveweight) x .60 (dressing percent)
(assuming 700 Ibs. feeder cattle of comparable quality are available in all areas)
s 3.3 lbs. feed/lb. of gain x 160 Ibs. gain from feed x 100
377 Ibs. feed/100 Ibs. of car-
200 (liveweight) x .70 (dressing percent)
cass (assuming 40 lb. feeder pigs of comparable quality are available in all areas)
8 3.3 lbs. feed/lb. of gain x 160 Ibs. gain from feed x 100 lbs. feed/ lbs. of pri-
200 (liveweight) x .50 (dressing percent)
mal cuts and trim (assuming 40 lb. feeder pigs of comparable quality are available in all
areas)







CHAPTER V
RELATIONSHIP BETWEEN THE COST OF FEED AND THE
COST OF SHIPPING LIVESTOCK PRODUCTS BETWEEN
MIDWESTERN POINTS OF ORIGIN AND
FLORIDA DESTINATIONS

Comparison of Feed Costs
In every instance, the annual average cost of the least
cost formulation of a livestock ration was lower in the Mid-
west than in Florida (Table 9). The difference in costs ranged
from 8.2 to 22.1 cents per hundredweight between Cincinnati,
Ohio and Jacksonville, Florida. Between Kansas City, Missouri
and Port Everglades, Florida the difference ranged from 45.2
to 60.7 cents per hundredweight. In every instance, these differ-
ences are substantially less than the published freight rates on
mixed feeds between the same points. Hence, there was no
incentive to ship mixed feeds from the Midwest to Florida under
the transportation rate and feedstuffs price structure that pre-
vailed in 1964 and 1965.12

Comparison of Feed Cost Differentials with the
Cost of Shipping Livestock Products
Milk. The annual average cost of the least cost formu-
lation of the dairy ration (commonly known as 20% dairy
feed) at Florida locations exceeded the cost at Midwestern
locations from 22.1 to 60.7 cents per hundredweight during
the period studied (Table 9). At Jacksonville, Florida the
least cost formulation of the ration cost only 11 cents per hun-
dredweight more than at Cincinnati, Ohio in October 1964
whereas the cost of the Port Everglades formulation was 77
cents per hundredweight higher than the cost of the Kansas
City, Missouri formulation in June 1964 (Appendix Tables 14,
15, and 16). The standard deviation and range of the monthly
cost of the least cost formulation of the ration indicated that
dairy feed costs were considerably more stable in Florida than
in the Midwest (Table 10).
The composition of the least cost formulation of dairy
rations vary widely (Table 11). Wheat standard middlings,
hominy feed, and corn gluten feed were generally the cheapest
sources of energy in the Midwestern rations (Appendix Table

12Compare Table 9 with Appendix Table 13.









Table 9.-Difference between annual average cost of the least cost formu-
lation of five livestock rations between three midwestern and three Florida loca-
tions.'/'
(cents per 100 pounds)

Jacksonville Tampa Port Everglades

Dairy Ration
Cincinnati, Ohio 22.1 25.6 31.7
East St. Louis, Illinois 41.7 45.2 51.3
Kansas City, Missouri 51.1 54.6 60.7
Layer Ration
Cincinnati, Ohio 19.4 26.1 31.5
East St. Louis, Illinois 22.7 29.4 34.8
Kansas City, Missouri 33.1 39.8 45.2
Broiler Ration
Cincinnati, Ohio 20.8 28.5 34.7
East St. Louis, Illinois 24.5 32.3 38.4
Kansas City, Missouri 37.5 45.3 51.4
Steer Ration
Cincinnati, Ohio 15.2 16.9 22.2
East St. Louis, Illinois 33.3 35.0 40.3
Kansas City, Missouri 41.0 42.7 48.0
Hog Ration
Cincinnati, Ohio 8.2 14.9 20.6
East St. Louis, Illinois 21.1 27.7 33.4
Kansas City, Missouri 40.7 47.3 54.0

1 Apparent inconsistencies between these differences multiplied by amount of feed
required to produce a hundred pounds of products and the Transportation Rate Equiva-
lent of the Feed Cost Differential shown in Tables 13, 18, 22, 26, and 31 are due to
rounding errors.
2In every instance the cost of the rations was higher in Florida than in the midwest.


Table 10.-Dairy Ration: Annual average, standard deviation, and range
of monthly costs of the least-cost formulations at three Midwestern and three
Florida locations, April, 1964 March, 1965.
(cents per 100 pounds)

Annual aver- Standard Range
Location age cost deviation Low High

Cincinnati, Ohio 230.1 8.06 217 243
East St. Louis, Ill. 210.5 12.69 190 224
Kansas City, Missouri 201.1 15.42 175 221
Jacksonville, Florida 252.2 4.81 242 260
Tampa, Florida 255.7 5.05 247 263
Port Everglades, Fla. 261.8 5.27 252 269









Table 11 .-Composition and cost of least cost formulation of dairy ration in April 1964 at six locations.

Kansas City E. St. Louis Cincinnati Jacksonville Tampa Port Everglades

Cost: 1.94 2.09 2.30 2.55 2.61 2.68


Ingredients
X 2-Wheat standard middlings
X 3-Stabilized animal fat
X 9-Soybean meal, 44%1
X13-Dicalcium phosphate
X14-Limestone
X16-Hominy feed
X17-Cane molasses
X22-Cottonseed meal, 41% 1
SX23-Peanut oil meal
X25-Corn gluten feed
X27-Rice bran
X28-Oat mill feed
X30-Wheat bran
X32-Ground corn cobs
X34-Dried citrus pulp'
X37-Urea
X39-Alfalfa hay
X42-Timothy-clover hay 1
X46-Vitamin A, synthetic
X47-Salt


28.48
4.00


0.51
26.72


28.48
4.00


0.51
26.72


25.00 25.00

11.68 11.68


13.95



0.54
54.65



25.00


4.00


0.55
30.16


10.07

51.60


4.00


0.44
26.70


1.85
25.00
35.00


4.00


0.32
25.47
10.00

7.62
13.97
35.00


2.00


0.62
1.00


1Ingredients that appeared, in the least cost formulation of the ration during other months (Appendix Tables 17-22).









Table 12.--Milk: differences between feed cost differential (FCD) and feed cost equivalent of transportation rate (FCETR) be-
tween three Midwestern origins and their Florida destinations'.
(cents per 100 pounds)

Cincinnati, Ohio East St. Louis, Ill. Kansas City, Missouri
Jackson- Port Jackson- Port Jackson- Port
Month ville Tampa Everglades ville Tampa Everglades ville Tampa Everglades

April 1964 261 323 360 380 326 375 359 400 459
May 1964 268 323 370 279 326 377 359 401 462
June 1964 261 316 363 274 321 372 353 395 456
July 1964 259 316 361 272 322 370 356 400 459
M August 1964 255 314 360 275 326 376 357 403 463
September 1964 268 323 369 284 331 381 370 412 472
October 1964 275 330 376 291 338 388 372 414 474
November 1964 251 307 353 289 337 387 372 414 475
December 1964 266 324 369 295 345 394 385 430 489
January 1965 269 327 372 290 340 389 381 426 485
February 1965 270 329 374 291 342 391 381 427 486
March 1965 264 322 368 292 342 392 382 427 487

'The difference is calculated by subtracting the FCD (Appendix Tables 14, 15 and 16) from the FCETR (Appendix Table 9). A positive differ-
ence indicates that the cost of shipping the finished product was more than the difference in the cost of the feed to produce it between the two areas.







CHAPTER V
RELATIONSHIP BETWEEN THE COST OF FEED AND THE
COST OF SHIPPING LIVESTOCK PRODUCTS BETWEEN
MIDWESTERN POINTS OF ORIGIN AND
FLORIDA DESTINATIONS

Comparison of Feed Costs
In every instance, the annual average cost of the least
cost formulation of a livestock ration was lower in the Mid-
west than in Florida (Table 9). The difference in costs ranged
from 8.2 to 22.1 cents per hundredweight between Cincinnati,
Ohio and Jacksonville, Florida. Between Kansas City, Missouri
and Port Everglades, Florida the difference ranged from 45.2
to 60.7 cents per hundredweight. In every instance, these differ-
ences are substantially less than the published freight rates on
mixed feeds between the same points. Hence, there was no
incentive to ship mixed feeds from the Midwest to Florida under
the transportation rate and feedstuffs price structure that pre-
vailed in 1964 and 1965.12

Comparison of Feed Cost Differentials with the
Cost of Shipping Livestock Products
Milk. The annual average cost of the least cost formu-
lation of the dairy ration (commonly known as 20% dairy
feed) at Florida locations exceeded the cost at Midwestern
locations from 22.1 to 60.7 cents per hundredweight during
the period studied (Table 9). At Jacksonville, Florida the
least cost formulation of the ration cost only 11 cents per hun-
dredweight more than at Cincinnati, Ohio in October 1964
whereas the cost of the Port Everglades formulation was 77
cents per hundredweight higher than the cost of the Kansas
City, Missouri formulation in June 1964 (Appendix Tables 14,
15, and 16). The standard deviation and range of the monthly
cost of the least cost formulation of the ration indicated that
dairy feed costs were considerably more stable in Florida than
in the Midwest (Table 10).
The composition of the least cost formulation of dairy
rations vary widely (Table 11). Wheat standard middlings,
hominy feed, and corn gluten feed were generally the cheapest
sources of energy in the Midwestern rations (Appendix Table

12Compare Table 9 with Appendix Table 13.







CHAPTER V
RELATIONSHIP BETWEEN THE COST OF FEED AND THE
COST OF SHIPPING LIVESTOCK PRODUCTS BETWEEN
MIDWESTERN POINTS OF ORIGIN AND
FLORIDA DESTINATIONS

Comparison of Feed Costs
In every instance, the annual average cost of the least
cost formulation of a livestock ration was lower in the Mid-
west than in Florida (Table 9). The difference in costs ranged
from 8.2 to 22.1 cents per hundredweight between Cincinnati,
Ohio and Jacksonville, Florida. Between Kansas City, Missouri
and Port Everglades, Florida the difference ranged from 45.2
to 60.7 cents per hundredweight. In every instance, these differ-
ences are substantially less than the published freight rates on
mixed feeds between the same points. Hence, there was no
incentive to ship mixed feeds from the Midwest to Florida under
the transportation rate and feedstuffs price structure that pre-
vailed in 1964 and 1965.12

Comparison of Feed Cost Differentials with the
Cost of Shipping Livestock Products
Milk. The annual average cost of the least cost formu-
lation of the dairy ration (commonly known as 20% dairy
feed) at Florida locations exceeded the cost at Midwestern
locations from 22.1 to 60.7 cents per hundredweight during
the period studied (Table 9). At Jacksonville, Florida the
least cost formulation of the ration cost only 11 cents per hun-
dredweight more than at Cincinnati, Ohio in October 1964
whereas the cost of the Port Everglades formulation was 77
cents per hundredweight higher than the cost of the Kansas
City, Missouri formulation in June 1964 (Appendix Tables 14,
15, and 16). The standard deviation and range of the monthly
cost of the least cost formulation of the ration indicated that
dairy feed costs were considerably more stable in Florida than
in the Midwest (Table 10).
The composition of the least cost formulation of dairy
rations vary widely (Table 11). Wheat standard middlings,
hominy feed, and corn gluten feed were generally the cheapest
sources of energy in the Midwestern rations (Appendix Table

12Compare Table 9 with Appendix Table 13.







CHAPTER V
RELATIONSHIP BETWEEN THE COST OF FEED AND THE
COST OF SHIPPING LIVESTOCK PRODUCTS BETWEEN
MIDWESTERN POINTS OF ORIGIN AND
FLORIDA DESTINATIONS

Comparison of Feed Costs
In every instance, the annual average cost of the least
cost formulation of a livestock ration was lower in the Mid-
west than in Florida (Table 9). The difference in costs ranged
from 8.2 to 22.1 cents per hundredweight between Cincinnati,
Ohio and Jacksonville, Florida. Between Kansas City, Missouri
and Port Everglades, Florida the difference ranged from 45.2
to 60.7 cents per hundredweight. In every instance, these differ-
ences are substantially less than the published freight rates on
mixed feeds between the same points. Hence, there was no
incentive to ship mixed feeds from the Midwest to Florida under
the transportation rate and feedstuffs price structure that pre-
vailed in 1964 and 1965.12

Comparison of Feed Cost Differentials with the
Cost of Shipping Livestock Products
Milk. The annual average cost of the least cost formu-
lation of the dairy ration (commonly known as 20% dairy
feed) at Florida locations exceeded the cost at Midwestern
locations from 22.1 to 60.7 cents per hundredweight during
the period studied (Table 9). At Jacksonville, Florida the
least cost formulation of the ration cost only 11 cents per hun-
dredweight more than at Cincinnati, Ohio in October 1964
whereas the cost of the Port Everglades formulation was 77
cents per hundredweight higher than the cost of the Kansas
City, Missouri formulation in June 1964 (Appendix Tables 14,
15, and 16). The standard deviation and range of the monthly
cost of the least cost formulation of the ration indicated that
dairy feed costs were considerably more stable in Florida than
in the Midwest (Table 10).
The composition of the least cost formulation of dairy
rations vary widely (Table 11). Wheat standard middlings,
hominy feed, and corn gluten feed were generally the cheapest
sources of energy in the Midwestern rations (Appendix Table

12Compare Table 9 with Appendix Table 13.








17 to 22). Cane molasses also appeared in maximum amounts
in a large percentage of the rations in all locations except
Kansas City. In Florida, wheat standard middlings, hominy
feed, and corn gluten feed were partially replaced by rice bran
and dried citrus pulp. The Florida rations contained the max-
imum amount of cane molasses more often than the Midwestern
formulations and frequently called for large quantities of corn
cobs.
Urea appeared in all least cost formulations, generally to
the maximum amount permitted by the specifications. Oilseed
meals were in the rations at all locations during the fall months,
but occurred more frequently at the Midwest locations.
In every instance, the differences in the cost of 100 pounds
of feed used in the production of fresh milk (FCD) were sub-
stantially less than the cost of shipping the milk produced
from it (FCETR) between Midwestern origins and Florida
destinations (Table 12). Assuming all non-concentrated dairy
feed costs are the same at the Midwestern points of origin
and Florida destinations, it would have been necessary to re-
duce the cost of transporting fresh milk more than 90% to
equate the cost of shipping fresh milk with the difference in
the cost of feed between Midwestern origins and Florida desti-
nations (Table 13).
The wide disparity between the cost of shipping fresh
milk and the feed used to produce it is primarily due to the
perishability of milk and its high water content. This in turn,
permits Florida dairymen to incur considerably higher rough-
age and non-feed production costs and still compete successfully
with Midwestern producers in the market for fluid milk con-
sumed in the state. On the other hand, Florida dairymen make
no effort to compete with Midwestern dairymen in the pro-
duction of milk for processing into concentrated products that
move on relatively low transportation rates.

Eggs. The average annual cost of the least cost formu-
lation of the layer ration at Florida locations exceeded the
comparable cost at Midwestern locations by from 19.4 to 45.2
cents per hundredweight during the period studied (Table 9).
In Jacksonville, Florida these costs ranged from 10 to 29 cents
per hundredweight above the Cincinnati cost whereas the differ-
ence in the cost of the same ration between Kansas City,
Missouri and Port Everglades ranged from 30 to 57 cents per








Table 13.-Milk: lowest transportation rate and transportation rate equiva-
lent of the feed cost differential (TREFCD)1 on milk between three Midwestern
and three Florida locations, April 1964 March 1965.
(cents per 100 pounds)
Transportation Rate Equivalent of the
Lowest Feed Cost Differential (TREFCD)
transporta-
tion rate Average Low High

Cincinnati
Jacksonville 116 9 4 14
Tampa 140 10 6 16
Port Everglades 161 13 9 18
E. St. Louis
Jacksonville 132 17 13 22
Tampa 153 18 13 23
Port Everglades 176 19 16 26
Kansas City
Jacksonville 170 21 14 27
Tampa 189 22 15 29
Port Everglades 216 25 18 31

SThe transportation rate equivalent of the feed cost differential (TREFCD) is calou-
lated by multiplying the feed cost differential (FCD) (Appendix Tables 14, 15, and 16)
by the quantity of feed required to produce 100 pounds of the product in hundredweights
(Table 8).


hundredweight (Appendix Tables 23, 24, and 25). Both the
standard deviation and range of prices indicate that the cost
of this ration was more stable at Midwestern locations than
in Florida (Table 14).
The composition of the least cost formulations of the layer
ration varied widely among locations and over time (Table 15
and Appendix Tables 26 to 31). At all locations except Kansas
City, the least cost formulation contained high percentages of


Table 14.-Layer ration: Annual average, standard deviation, and range of
monthly costs of the least-cost formulation at three Midwestern and three Florida
locations, April 1964 March 1965.
(cents per 100 pounds)

Range
Annual averageStandard Ra
Location cost deviation Low High
Cincinnati, Ohio 265.5 4.98 258 274
East St. Louis, 11. 262.2 4.82 254 271
Kansas City, Missouri 251.8 3.52 246 257
Jacksonville, Florida 284.9 7.72 272 298
Tampa, Florida 291.6 7.35 279 302
Port Everglades, Fla. 297.0 6.76 285 307










Table 15.-Composition and cost of least formulation of layer ration in April 1964 at six locations.

Kansas City E. St. Louis Cincinnati Jacksonville Tampa Port Everglades

Cost: 2.48 2.66 2.71 2.85 2.92 2.99


Ingredients
X 1-Ground yellow corn
X 2-Wheat standard middlings1
X 3-Stabilized animal fat
X 4-Fish meal, menhaden
X 5-Feather meal, hydrolized 1
X 6-Meat and bone scrap
X 7-Poultry by-product meal
X 8-Corn gluten meal
X 9-Soybean meal, 44%
i X11-Dehydrated alfalfa meal, 17%
cn X12-Distillers dried solubles (corn)
X13-Dicalcium phosphate
X14-Limestone
X17-Cane molasses 1
X20-Pulverized oats1
X21-Ground milo
X22-Cottonseed meal, 41% 1
X25-Corn gluten feed
X27-Rice bran
X28-Oat mill feed
X31-DL methionine
X45-Vitamin supplement #1
X46-Vitamin A, synthetic
X47-Salt
X48-Trace minerals


10.00


55.71


56.71



10.00


3.84
2.50
0.07
0.02
4.23



19.17


61.35



10.00


12.36
2.50
0.33
0.12
10.64


51.76


26.93


51.76

0.56
5.00

3.84
1.93

2.50

1.23
5.16


26.93


0.02
0.62
0.35
0.10


51.76

0.56
5.00

3.84
1.93

2.50

1.23
5.16


26.93


0.02
0.62
0.35
0.10


SIngredients that appeared in the least cost formulation of the ration during other months (Appendix Table 26-31).










Table 16.-Fresh eggs: differences between feed cost differential (FCD) and feed cost equivalent of transportation rate
(FCETR)1 between three Midwestern origins and their Florida destinations.2
(cents per 100 pounds).
Cincinnati, Ohio East St. Louis, Ill. Kansas City, Missouri
Jackson- Port Jackson- Port Jackson- Port
Month ville Tampa Everglades ville Tampa Everglades ville Tampa Everglades

April 1964 70 68 66 45 38 41 70 70 74
May 1964 74 72 70 51 44 47 75 75 79
June 1964 64 62 62 40 33 38 70 70 76
July 1964 67 66 65 46 44 44 81 82 87
S August 1964 64 62 62 36 29 34 75 75 81
September 1964 69 67 66 51 44 48 88 88 93
October 1964 70 68 67 55 48 52 90 90 95
November 1964 67 65 64 37 30 34 76 76 81
December 1964 55 53 53 39 32 37 71 71 77
January 1965 57 54 54 33 25 30 69 68 74
February 1965 61 58 58 33 25 30 63 62 68
March 1965 57 60 63 30 28 36 59 64 73

1FCETR based on TOFC plan II, one-trailer rates from Cincinnati and Kansas City and TOFC two-trailer from East St. Louis.
2The difference is calculated by subtracting the FCD (Appendix Tables 23, 24, and 25) from the FCETR (Appendix Table 9). A positive differ-
ence indicates that the cost of shipping the finished product was more than the difference in the cost of the feed needed to produce it between the
two areas.









Table 17.-Frozen eggs: differences between feed cost differential (FCD) and feed cost equivalent of transportation rate
(FCETR)1 between three Midwestern origins and their Florida destinations.2
(cents per 100 pounds).
Cincinnati, Ohio East St. Louis, Ill. Kansas City, Missouri
Jackson- Port Jackson- Port Jackson- Port
Month ville Tampa Everglades ville Tampa Everglades ville Tampa Everglades

April 1964 32 30 50 34 27 29 27 23 20
May 1964 36 34 54 40 33 35 32 28 25
June 1964 26 24 46 29 22 26 27 23 22
July 1964 29 28 49 35 29 32 38 35 33
o August 1964 26 24 46 25 18 22 32 28 27
September 1964 31 29 50 40 33 36 45 41 39
October 1964 32 30 51 44 37 40 47 43 41
November 1964 29 27 48 26 19 22 33 29 27
December 1964 17 15 37 28 21 25 28 24 23
January 1965 19 16 38 22 14 18 26 21 20
February 1965 23 20 42 22 14 18 20 15 14
March 1965 17 22 47 19 17 24 16 17 19

1FCETR based on truck rates from Cincinnati, TOFC, Plan III, two-trailer rates from East St. Louis and refrigerated rail car.
2The difference is calculated by subtracting the FCD (Appendix Tables 23, 24, and 25) from the FCETR (Appendix Table 9). A positive differ-
ence indicates that the cost of shipping the finished product between the two areas was more than the difference in the cost of the feed needed to
produce it.









corn. At Kansas City, corn appeared in the minimum amount
allowed by the specifications while milo or wheat standard
middlings were the major sources of energy. Soybean meal
provided a much larger proportion of the amino acids at the
Midwestern locations than in Florida. Likewise, bone and meat
scrap appeared most frequently in the Kansas City, East St.


Table 18.-Eggs: lowest transportation rate and transportation rate
equivalent of the feed cost differential (TREFCD)1 on fresh and frozen eggs
between three Midwestern and three Florida locations, April 1964 March 1965.
(cents per 100 pounds)

Fresh eggs
Transportation rate equivalent
Lowest of the feed cost differential
transportation (TREFCD)
rate
Average Low High
Cincinnati
Jacksonville 212 49 26 74
Tampa 227 67 43 92
Port Everglades 251 80 61 105
E. St. Louis
Jacksonville 162 58 23 87
Tampa 162 75 41 99
Port Everglades 189 89 56 112
Kansas City
Jacksonville 274 84 43 122
Tampa 292 101 61 133
Port Everglades 319 115 76 145

Frozen eggs
Transportation rate equivalent
Lowest of the feed cost differential
transportation (TREFCD)
rate
Average Low High
Cincinnati
Jacksonville 170 59 30 88
Tampa 189 79 52 109
Port Everglades 201 96 73 125
E. St. Louis
Jacksonville 162 69 27 103
Tampa 162 89 49 119
Port Everglades 189 106 67 134
Kansas City
Jacksonville 194 101 52 146
Tampa 203 121 73 158
Port Everglades 215 137 91 173
1The TREFCD is calculated by multiplying the FCD (Appendix Tables 23, 24, and
25) by the quantity of feed required to produce 100 pounds of the product in hundred-
weights (Table 8).









Louis, and Cincinnati rations whereas fish and poultry by-prod-
uct meals were in practically all of Florida's rations.
The cost of shipping eggs between all Midwestern and
Florida locations exceeds the difference in the cost of the feed
required to produce them in Florida by more than 25 cents
per hundredweight in the case of fresh eggs (Table 16) and
14 cents per hundredweight on frozen eggs (Table 17). Assum-
ing all other costs to be equal at Midwestern and Florida loca-
tions, it would have been necessary to reduce the freight rate
on fresh eggs by as much as 75% to equate the cost of ship-
ping eggs with the difference in the cost of feed between
Midwestern origins and Florida destinations (Table 18). Some-
what smaller reductions would be required to achieve the same
objectives on frozen eggs.
Floridians are now consuming essentially all of the eggs
produced in the state and at times shipping some out. This
analysis indicates that Florida egg producers also have a feed
cost advantage on frozen eggs consumed in the state and may
be in a position to compete in the frozen eggs market in nearby
consumption centers.

Broilers. The average annual cost of the least cost formu-
lation of the broiler ration at Florida locations exceeded the
cost in Midwestern locations by 20.8 to 51.4 cents per hundred-
weight (Table 9). Between Cincinnati and Jacksonville, the
difference in the cost of this ration varies from 16 to 27 cents
per hundredweight. In Port Everglades, the costs of the least
cost formulation of the ration is from 37 to 58 cents per hun-
dredweight higher than those in Kansas City (Appendix Tables
32, 33, and 34). The cost of Midwestern formulations of the

Table 19.-Broiler Ration: annual average, standard deviation, and range
of monthly costs of the least-cost formulation of three Midwestern and three
Florida locations, April 1964 March 1965.
(cents per 100 pounds)
Annual aver- Standard Range
Location age cost deviation Low High
Cincinnati, Ohio 310.2 6.10 303 319
East St. Louis, Ill. 306.5 7.12 291 316
Kansas City, Missouri 293.5 4.94 285 299
Jacksonville, Fla. 331.0 8.19 319 346
Tampa, Florida 338.8 8.18 327 352
Port Everglades, Fla. 344.9 7.56 334 356








Table 20.-Composition and cost of least cost formulation of broiler ration in April 1964 at six locations.

Kansas City E. St. Louis Cincinnati Jacksonville Tampa Port Everglades

Cost: 2.89 3.09 3.18 3.36 3.45 3.52
Ingredients
X 1-Ground yellow corn 10.00 52.59 57.15 10.00 13.63 46.77
X 2-Wheat standard middlings ....
X 3-Stabilized animal fat 1.64 1.69 1.00 1.00 1.00 1.00
X 4-Fish meal, menhaden --- .... 2.05 6.99 7.50 6.78
X 5-Feather meal, hydrolized 1 ...-
X 6-Meat and bone scrap 4.29 5.00 4.40
X 7-Poultry by-product meal 5.00 ....- .. 5.00 5.00 5.00
X 8-Corn gluten meal 8.78 8.62 3.87 2.98 2.40 0.72
SX 9-Soybean meal, 44% 15.91 19.39 21.02 7.93 8.29 11.67
X10-Soybean meal, 50% 1
X11-Dehydrated alfalfa meal, 17% 0.30 ..... 0.16 0.99 1.01 0.71
X12-Distillers dried solubles (corn) .. 6.07 3.84
X13-Dicalcium phosphate --0.13
X14-Limestone 0.37 0.44 0.43 0.60 0.54 0.60
X17-Cane molasses .--- ---- .... 2.00
X21-Ground milo 47.66 ... ..52.52 48.91 12.72
X22-Cottonseed meal, 41% 5.00 5.00 5.00 5.00 5.00 5.00
X23-Peanut oil meal ------ 1.62
X27-Rice bran ----.... 4.34 5.69 6.00
X31-DL methionine 0.01 .. 0.01
X45-Vitamin supplement #1 0.03 0.06 0.06 0.02 0.02 0.02
X46-Vitamin A, synthetic 0.46 0.46 0.46 0.46 0.46 0.46
X47-Salt 0.40 0.40 0.40 0.40 0.40 0.40
X48-Trace minerals 0.15 0.15 0.15 0.15 0.15 0.15


1Ingredients that appeared in the least cost formulation of the ration during other months (Appendix Tables 35-40).








Table 21.-Broilers: differences between feed cost differential (FCD) and feed cost equivalent of transportation rate (FCETR)1
between three Midwestern origins and their Florida destinations.2
(cents per 100 pounds)
Cincinnati, Ohio East St. Louis, 111. Kansas City, Missouri
Jackson- Port Jackson- Port Jackson- Port
Month ville Tampa Everglades ville Tampa Everglades ville Tampa Everglades

April 1964 11 6 3 6 -2 -1 -6 -9

May 1964 12 8 5 9 4 2 3 -1 -4

June 1964 7 3 2 6 1 1 5 1 -

July 1964 11 10 5 11 9 5 15 14 9

August 1964 9 5 3 1 -4 -5 8 4 2

September 1964 10 6 4 16 11 10 19 15 13

October 1964 13 9 6 23 18 16 24 20 17

November 1964 11 7 5 5 -1 12 8 6

December 1964 3 -1 -3 9 4 3 10 6 4

January 1965 -4 -7 2 -3 -5 4 -3

February 1965 9 5 3 10 5 4 3 -1 -3

March 1965 2 2 3 3 -1 -3 -1

1 FCETR based on TOFC, Plan III, two-trailer rates from Cincinnati, East St. Louis, and Kansas City.
2The difference is calculated by subtracting the FCD (Appendix Tables 32, 33, and 34) from the FCETR (Appendix Table 12). A positive differ-
ence indicates that the cost of shipping the finished product between the two areas was more than the difference in the cost of the feed needed to
produce it.









ration were slightly more stable than those in Florida (Table
19).
The composition of the least cost formulation of the broiler
ration varied both among locations and months (Table 20 and
Appendix Tables 35 to 40). Least cost formulations of the
broiler rations were similar to those of the layer rations in
that ground yellow corn was the principal source of energy at
all locations except Kansas City where milo appeared in large
quantities. Soybean meal appeared in the Midwestern ration
in larger quantities than in Florida rations. Florida formula-
tions of the rations generally contain the maximum quantity
of poultry by-product meal and relatively large quantities of
fish meal whereas stabilized animal fat occurred in large quan-
tities in Midwestern formulations.
During some months and between some origins and des-
tinations, the cost of shipping dressed broilers to Florida
was less than the cost of feed required to produce them (Table
21). However, over the entire year, the cost of shipping broilers
exceeded the cost of the feed required to produce them. As-
suming non-feed costs to be equal at all locations, it would
have been necessary to lower the freight rate on dressed broil-
ers from 3 to 24 cents per hundredweight to equate the cost
of shipping broilers with the difference in the cost of the feed
used to produce them at Midwestern origins and Florida loca-

Table 22.-Broilers: lowest transportation rate and transportation rate
equivalent of the feed cost differential (TREFCD)1 on broilers between three
Midwestern and three Florida locations, April 1964- March 1965.
(cents per 100 pounds)


Transportation rate equivalent
Lowest of the feed cost differential
transporta- (TREFCD)
tion rate
Average Low High
Cincinnati
Jacksonville 82 58 45 81
Tampa 91 80 64 104
Port Everglades 104 97 87 123
East St. Louis
Jacksonville 93 69 28 90
Tampa 102 90 50 112
Port Everglades 115 108 70 129
Kansas City
Jacksonville 130 105 62 132
Tampa 139 127 84 157
Port Everglades 149 144 104 176


1The TREFCD is calculated by multiplying the FCD (Appendix Tables 32, 33, and
84) by the quantity of feed required to produce 100 pounds of the product in hundred-
weight (Table 8).








tions (Table 22). With the exception of the relationship be-
tween feed costs and broiler transportation rates between
Midwestern origins and Jacksonville, Florida a relatively small
change in the feed cost differential or the freight rate on dressed
broilers would have shifted the economic advantage from one
region to the other. In other words, the relationship between
the cost of shipping broilers and the difference in feed costs is
sensitive to changes in the market prices of feed ingredients
in the two areas and changes in freight rates.

Beef. The average annual cost of the least cost formu-
lation of the beef ration at Florida locations exceeded the cost
at Midwestern locations by 15.2 to 48 cents per hundred pounds
(Table 9). In Jacksonville, the cost of the least cost formula-
tion of the ration ranged from 6 to 24 cents above the cost
in Cincinnati. The difference between the least cost formula-
tion of the ration in Kansas City and Port Everglades ranged
from 32 to 63 cents (Appendix Tables 41, 42, and 43). The
standard deviation and range of the monthly cost of the least
cost formulation of the ration indicate that these costs were
more stable in Florida than in the Midwest (Table 23).
The composition of the least cost formulation of the beef
cattle ration varied widely both among locations and months
(Table 24 and Appendix Tables 44 to 49). Wheat standard
middlings and hominy feed provided most of the energy in
the Midwestern formulations of the rations. However, cane
molasses appeared in maximum quantities about 75%o of the
time. In Florida, wheat standard middlings, rice bran and

Table 23.-Steer Ration: annual average, standard deviation, and range
of monthly costs of the least-cost formulation at three Midwestern and three
Florida locations, April 1964 March 1965.
(cents per 100 pounds)
Annual aver- Standard Range
Location age cost deviation Low High

Cincinnati, Ohio 196.9 6.27 186 206
East St. Louis, Ill. 178.8 9.70 1.64 189
Kansas City, Missouri 171.1 13.28 150 189
Jacksonville, Florida 212.1 5.91 2.05 223
Tampa, Florida 213.8 5.23 2.04 225
Port Everglades, Fla. 219.1 5.58 2.08 230








Table 24.--Composition and cost of the least cost formulation of steer rations in April 1964 at six locations.

Kansas City E. St. Louis Cincinnati Jacksonville Tampa Port Everglades

Cost: 1.67 1.81 2.00 2.23 2.25 2.30
Ingredients
X 1-Ground yellow corn --- --- ---- -
X 2-Wheat standard middlings 28.16 34.48 28.68 36.09 36.09 36.09
X 3-Stabilized animal fat 4.24 5.00 0.75 5.70 5.70 5.70
X 9-Soybean meal, 44% 1- -
X11-Dehydrated alfalfa meal, 17% 5.00 2.50 2.50 2.50 2.50 2.50
X13-Dicalcium phosphate 1 --- -
X14-Limestone 0.97 1.00 1.10 1.83 1.83 1.83
X16--Hominy feed 32.02 19.10 41.59--
X17-Cane molasses 15.00 15.00 15.00
X21-Ground milo ---- -
X22-Cottonseed meal, 41% 1--- -- ---
X25-Corn gluten feed 7.24 ---- -
X27-Rice bran ..--- ---11.85 11.85 11.85
X28-Oat mill feed 28.34 29.19
X30-Wheat bran ---' -
X32-Ground corn cobs --... 0.68 24.01 25.25 25.25 25.25
X34-Dried citrus pulp .-- ----- -1
X37-Urea 0.46 .-0.56 0.97 0.97 0.97
X39-Alfalfa hayl--- ---1 --
X42-Timothy-clover hay --
X46-Vitamin A, synthetic 0.31 0.31 0.31 0.31 0.31 0.31
X47-Salt 0.50 0.50 0.50 0.50 0.50 0.50

Ingredients that appeared in the least cost formulation of the ration during other months (Appendix Tables 44-49).








Table 25.-Beef: differences between feed cost differential (FCD) and feed cost equivalent
between three Midwestern origins and their Florida destinations.2


of transportation rate (FCETR)1


(cents per 100 pounds)
Cincinnati, Ohio East St. Louis, 11. Kansas City, Missouri
Jackson- Port Jackson- Port Jackson- Port
Month ville Tampa Everglades ville Tampa Everglades ville Tampa Everglades

April 1964 -2 -2 -4 -19 -18 -20 -23 -23 -25

May 1964 11. 11 9 -15 -14 -16 -21 -21 -23

June 1964 1 -1 -18 -18 -19 -23 -24 -25

July 1964 -1 -2 -24 -24 -25 -22 -23 -24

August 1964 5 3 2 -17 -18 -19 -16 -18 -19

September 1964 13 11 9 9 -10 -12 4 6 8

October 1964 14 12 10 -5 -6 -8 -4 -6 -8

November 1964 -2 -4 -7 -5 -6 -9 -3 -5 -8

December 1964 5 6 2 -2 -4 5 6 2

January 1965 11 12 8 -4 -2 -6 6 7 3

February 1965 15 14 11 9 8 5

March 1965 7 8 5 2 4 1 8 9 6

SFCETR based on TOFC, Plan III, two-trailer rates from Cincinnati, East St. Louis and Kansas City.
2The difference is calculated by subtracting the FCD (Appendix Tables 41, 42, and 43) from the FCETR (Appendix Table 10). A positive differ-
ence indicates that the cost of shipping the finished product between the two areas was more than the difference in the cost of the feed needed to
produce it.








corn cobs were present in large quantities, and cane molasses
was called for in maximum quantities every month of the year.
Oilseed cakes were not present in large quantities, since most
of the protein requirements were satisfied with urea and the
relatively high protein content of the beans and wheat mid-
dlings and hominy feed. The fact that ground yellow corn
did not appear in large quantities at the Midwestern locations
does not mean that feeders in these areas should have not been
feeding corn during this period. Instead, Midwestern feeders
who produced corn probably fed corn rather than sold it in
order to utilize their labor during the winter profitably. In
other words, corn producers frequently feed cattle in an effort
to market their corn and off-season labor at the highest possi-
ble price rather than to maximize their returns from the pro-
duction of beef cattle alone.
In most instances, the difference in the cost of the feed
required to produce beef exceeded the cost of shipping beef
carcasses between Midwestern origins and Florida destinations
(Table 25). However, the differences were not great and
toward the end of the 12-month period, the cost of shipping
beef generally exceeded the difference in the cost of the feed,
particularly between Kansas City and Cincinnati and all Florida
destinations. This change in the relationship between feed
costs and the transportation rate on beef was primarily due
to the steady decline in the cost of the least cost formulation
of the ration at Florida destinations, a decline that reflected
the reductions that took place in the price of citrus pulp and
cane molasses (Appendix Table 5).
Over the entire period, the difference in the cost of feed
required to produce beef was less than the cost of transporting
it from Cincinnati to all Florida destinations (Table 26).
Contrariwise, the cost of shipping beef was less than the
difference in the feed cost between both Kansas City and East
St. Louis and all Florida destinations. To equate the freight
rate on 100 pounds of beef with the cost of feed required to
produce it, it would have been necessary to have lowered the
rate on beef between Cincinnati and Florida destinations by
15 to 24 cents per hundredweight and to have raised it from
East St. Louis and Kansas City by 32 to 46 cents per hundred
pounds.
Just as in the case of broilers, the relationship between
feed costs and the transportation rate on beef are very sensitive









Table 26.-Beef: lowest transportation rate and transportation rate equiva-
lent of the feed cost differential (TREFCD) I on beef between three Midwestern
and three Florida locations, April 1964- March 1965 (cents per 100 pounds).

Transportation rate equivalent
Lowest of the feed cost differential
transporta- (TREFCD)
tion rate Average Low High

Cincinnati
Jacksonville 82 61 24 96
Tampa 91 67 36 108
Port Everglades 104 89 60 132
E. St. Louis
Jacksonville 93 127 84 192
Tampa 102 140 88 200
Port Everglades 115 161 112 216
Kansas City
Jacksonville 130 164 96 228
Tampa 139 171 104 236
Port Everglades 152 191 128 252

1The TREFCD is calculated by multiplying the FCD (Appendix Tables 41, 42, and
48) by the quantity of feed required to produce 100 pounds of the product in hundred-
weight (Table 8).

to changes in feed prices and the transportation rates, so sensi-
tive in fact that a decline in the price of two feed ingredients
during the 12-month period covered by this study shifted the
economic advantage from the Midwest to Florida.

Pork. The average annual cost of the least cost formu-
lation of the pork ration at Florida locations exceeded the cost
at Midwestern locations by 8.2 to 54 cents per hundredweight
(Table 9). Between Cincinnati and Jacksonville, the differ-
ences between the costs of the least cost formulation of this
ration showed a month to month variation of 1 to 14 cents
per hundred pounds. The Port Everglades formulation cost
from 42 to 60 cents per hundredweight more at Port Everglades
than the cost of the Kansas City formulation at Kansas City
(Appendix Tables 50, 51, and 52). The standard deviation
and range of the average annual cost indicate this cost was
more stable at the Midwestern locations than in Florida
(Table 27).
The composition of the formulation of the least cost swine
ration varies widely among locations and months (Table 28
and Appendix Tables 53 to 58). At Kansas City, milo was the
major source of energy whereas corn provided a major portion








Table 27.-Hog ration: annual average, standard deviation, and range of
monthly costs of the least-cost formulation at three Midwestern and three
Florida locations, April 1964-March 1965 (cents per 100 pounds).
Location Annual aver- Standard Range
age cost deviation Low High

Cincinnati, Ohio 270.1 5.37 262 276
East St. Louis, Ill. 257.2 6.88 244 267
Kansas City, Missouri 237.7 7.06 227 248
Jacksonville, Fla. 278.3 8.62 268 292
Tampa, Florida 285.0 8.59 275 300
Port Everglades, Fla. 290.7 8.52 281 306


of the energy at East St. Louis, Illinois, and Cincinnati. Corn
and milo were also major sources of energy in Florida. Oilseed
meals occurred in somewhat larger amounts at Midwestern
locations but in both areas most of the protein was derived
from the mill feeds.
With few exceptions, the cost of shipping both carcass
and lean cuts of pork to Florida destinations from Kansas
City and East St. Louis was less than the difference in the
feed costs between the some locations (Tables 29 and 30).
However, the difference in the cost of the feed used in the
production of pork was less than the cost of shipping pork
between Cincinnati and Florida approximately half of the time.
This suggests that the hog producers in the Midwest had some
advantage over Florida producers during the period studied.
Assuming the non-feed cost of producing pork is equal at all
locations, in most instances the cost of shipping the product could
have been more nearly equated with the feed cost differentials
by (1) reducing the freight rate on pork carcasses and lean pork
cuts between Cincinnati to Florida destinations and (2) raising
the freight rate on both pork cuts and lean pork cuts between
Kansas City and Florida destinations (Table 31).
Many meat wholesalers find it more economical to ship
in primal and lean pork cuts rather than carcasses because
(1) the demand for lean pork is much stronger than the demand
for lard in Florida, and (2) the price of lard is relatively low
when compared to the price of pork.
The relationship between the cost of shipping and the
differences in the cost of the feed required to produce it be-








Table 28.-Composition and cost of the least cost formulation of hog rations in April 1964 at six locations.
Kansas City E. St. Louis Cincinnati Jacksonville Tampa Port Everglades
Cost: 2.29 2.58 2.74 2.77 2.85 2.89


Ingredients
X 1-Ground yellow corn 45.58 42.58 ..---- -
X 2-Wheat standard middlings 8.23 6.78 20.00 5.32 5.24 4.99
X 3-Stabilized animal fat 2.00 2.00 2.00 2.00 2.00 2.00
X 4-Fish meal, menhaden .-- 2.48 2.51 I -- 3.58
X 5-Hydrolized feather meal --- --1.10 1.13 -
X 6-Meat and bone scrap .00 5.00 --- -- -
X 7-Poultry by-product meal 3.82 3.49 3.49 1.52
X 8-Corn gluten meal 1.22 -- --- -
X 9-Soybean meal, 44% 8.17 5.83 3.24 7.45 4.81 3.02
X10-Soybean meal, 50% ---- -2.32
X11-Dehydrated alfalfa meal, 17% 0.25 0.26 -
X13-Dicalcium phosphate 0.29 ---
SX14-Limestone 1.45 0.26 0.36 1.55 1.55 1.26
X15-Ground barley 1 --- -----
X16-Hominy feed 20.00 19.75 19.74 ---
X17-Cane molasses 4.02 0.53 5.00 5.00 5.00
X20-Pulverized oats' ...
X21-Ground milo 47.50 5.--- ....- 53.82 53.35 55.02
X22-Cottonseed meal, 41% 0.74 0.71 0.57 0.51 2.04
X25-Corn gluten meal -- --- -- ---
X27-Rice bran 19.10 20.00 20.00
X28-Oat mill feed 5.98 7.44--- --
X30-Wheat bran' ---- --- -
X32-Ground corn cobs -. ...-. 2.47 ---
X34-Dried citrus pulp 1 .----- -----
X37-Urea -- -- 0.97
X45-Vitamin supplement #1 --.. 0.01 --- ---- --
X47-Salt 0.50 0.50 0.50 0.50 0.50 0.50
X48-Trace minerals 0.10 0.10 0.10 0.10 0.10 0.10
1 Ingredients that appeared in the least cost formulation of the ration during other months (Appendix Tables 53-58).








Table 29.-Pork primal cuts and trim: differences between feed cost differential (FCD) and feed cost equivalent of transpor-
tation rate (FCETR) 1 between three Midwestern origins and their Florida destinations 1 (cents per 100 pounds).

Cincinnati, Ohio East St. Louis, Ill. Kansas City, Missouri
Jackson- Port Jackson- Port Jackson- Port
Month ville Tampa Everglades ville Tampa Everglades ville Tampa Everglades

April 1964 13 6 5 -1 8 -9 -23 -40 -31

May 1964 17 11 7 6 -10 -21 -27 -31

June 1964 9 3 -2 8 -11 -19 -25 -28

July 1964 10 4 1 2 8 -11 -11 -17 -20

August 1964 8 5 3 -12 -15 -17 -18 -21 -23

September 1964 13 7 4 1 5 -12 4 -10 -13

October 1964 10 4 1 7 1 -2 -5 -11 -14

November 1964 9 3 -1 -2 -8 -12 -12 -18 -22

December 1964 2 5 8 1 8 -11 -16 -23 -26

January 1965 7 -10 7 -14 -17 -19 -26 -29

February 1965 2 5 9 -10 -17 -21 -20 -27 -31

March 1965 1 8 9 8 -20 -21 -20


SFCETR based on TOFC, Plan III, two-trailer rates from Cincinnati, East St. Louis and Kansas City.
2The difference is calculated by subtracting the FCD (Appendix Tables 50, 51 and 52) from the FCETR (Appendix Table 11). A positive differ-
ence indicates that the cost of shipping the finished product between the two areas was more than the difference in the cost of the feed needed
to produce it.








Table 30-Pork Carcasses: differences between feed cost differential (FCD) and feed cost equivalent of transportation rate
(FCETR)1 between three Midwestern origins and their Florida destinations2 (cents per 100 pounds).

Cincinnati, Ohio East St. Louis, Ill. Kansas City, Missouri

Jackson- Port Jackson- Port Jackson- Port
Month ville Tampa Everglades ville Tampa Everglades ville Tampa Everglades


April 1964

May 1964

June 1964

July 1964

August 1964

SSeptember 1964

October 1964

November 1964

December 1964

January 1965

February 1965

March 1965


- -2

2 -1


- -14

2 -1 -12

2 -10

-2 -2

-7 -8 -9

3 1 5

9 7 4

-3 -3

-2 -7

-6 8 -10

-9 -12 -11

-1 1 -11


1 FCETR based on TOFC, Plan III, two-trailer rates from Cincinnati, East St. Louis and Kansas City.
2The difference is calculated by subtracting the FCD (Appendix Tables 50, 51, and 52) from the FCETR (Appendix Table 11). A positive dif-
ference indicates that the cost of shipping the finished product between the two areas was more than the difference in the cost of the feed needed
to produce it.










tween the Midwest origins and Florida locations are similar
to those that exist for broilers and beef in that they are sensi-
tive to relatively small changes in either the price of feed
ingredients or freight rates.


Table 31-Pork: lowest transportation rate and transportation rate
equivalent of the feed cost differential (TREFCD)1 on pork between three
Midwestern and three Florida locations, April 1964-March 1965 (cents per
100 pounds).
Pork Carcasses
Transportation rate equivalent
of the feed cost differential
Lowest transpor- (TREFCD)
station rate
Average Low High
Cincinnati
Jacksonville 82 31 4 60
Tampa 91 56 23 90
Port Everglades 104 78 49 113
East St. Louis
Jacksonville 93 80 41 113
Tampa 102 105 68 136
Port Everglades 115 126 90 162
Kansas City
Jacksonville 130 153 109 181
Tampa 139 178 136 211
Port Everglades 152 200 158 226

Pork Primal Cuts and Trim
Transportation rate equivalent
of the feed cost differential
Lowest transpor- (TREFCD)
station rate
Average Low High
Cincinnati
Jacksonville 82 44 5 84
Tampa 91 79 32 127
Port Everglades 104 109 69 158
East St. Louis
Jacksonville 93 111 58 158
Tampa 102 147 95 190
Port Everglades 115 176 127 227
Kansas City
Jacksonville 130 215 153 253
Tampa 139 250 190 296
Port Everglades 152 280 222 317
1The TREFCD is calculated by multiplying the FCD (Appendix Tables 50, 51, and
62) by the quantity of feed required to produce 100 pounds of the product in hundred-
weight (Table 8).








CHAPTER VI
SUMMARY AND CONCLUSIONS
In this study, the differences in the cost of the least
cost formulation of a dairy cattle, layer, broiler, beef cattle,
and swine rations were compared to the cost of shipping the
amount of the product one unit of the ration would produce
between three Midwestern points of origin and three Florida
destinations.
In every instance, the average annual cost of the least
cost formulations of the dairy cattle, layer, broiler, beef cattle,
and hog rations was higher in Florida than at the Midwestern
locations but the difference in the costs was substantially less
than the published transportation rate on mixed feeds be-
tween the same locations. As long as this condition prevails,
there will be no significant increase in the movement of mixed
feeds from the Midwest to Florida.
The cost of shipping milk and eggs exceeded the differ-
ences in the cost of the least cost formulation of the rations
used to produce these products between Midwestern origins
and Florida destinations by relatively large amounts. Further-
more, relatively large changes in either feed ingredient prices
or freight rates on the products would have been required to
shift the economic advantage of producing these products from
one area to the other. This is one of the major reasons Florida
farmers are now producing a very large proportion of the fluid
milk and eggs consumed in the state and are likely to do so
until the state's requirements are satisfied. However, before
they begin to produce milk and eggs for shipment to other
areas, it will be desirable to re-evaluate the cost-price structure
in these industries.
Differences between the cost of shipping 100 pounds of
broilers, beef, and pork and the cost of the least cost formula-
tion of the quantity of feed used to produce 100 pounds of these
products between the same locations during the same period
of time were relatively small. For these commodities, the feed
cost advantage of producing them in one area rather than the
other actually shifted during the course of this study. The
fact that neither area had a decisive feed cost advantage in
these products indicates that (1) efficient producers in both
areas could have produced these products profitably at the
level of feed ingredient prices and transportation costs that
prevailed during the study and (2) relatively small changes








in freight rates and/or the price of feed ingredients can shift
the competitive advantage producers in one area have over the
producers in another.
The competitive position of Midwestern producers of
broilers, beef, and pork was appreciably enhanced when the
railroads began to transport these products on truck trailers
loaded on flat cars (TOFC) at rates below those published for
transporting them in conventional equipment. The Novem-
ber 14, 1964.13 reduction in the FAK-TOFC rates from the
Eastern to the Southern Territory further improved the com-
petitive position of the Midwestern producers of broilers, beef,
and pork. For example, this rate reduction amounted to 10
cents per hundredweight on beef shipped from East St. Louis
to Jacksonville, Florida. Assuming freight rate reductions
lowered the price of the products to which they apply and
that the beef cattle rations were comprised of 100% feed
grains, this 10 cent rate reduction on beef offset 2.5 cents
per hundredweight of the May 1963 feed grain rate reduction
between East St. Louis and Jacksonville, Florida.14 Inasmuch
as no rations are entirely composed of feed grains, the meat
rate reduction offset a considerably larger portion of the grain
rate reduction, e.g., as much as 5 cents per hundredweight
when the ration contained 50% feed grain and 25 cents per
hundredweight when the ration contained only 10% grain.
In practice, however, producers who alter the formulation
of their rations in response to changes in the price of feed
ingredients simply reduce the amount of feed grains in the
rations and substitute locally produced ingredients or mill
feeds, thus reducing the amount of feed grains shipped into
Florida. In many instances, this rate reduction encouraged
the substitution of mill feeds for feed grains.1"
The changes that took place in the formulation of the
beef cattle ration during the 12-month period illustrate the
importance of a local supply of relatively low cost feed in-
gredients to the economic well-being of Florida's beef cattle
industry. When the study was initiated, the prices of citrus

Sup. 6, SFTB 913F-ICC S940.
The difference of ten cents per hundredweight of beef shipped is the
equivalent of the difference in the cost of 400 pounds of feed required
to produce it.
Progress Report to Southern Railroad dated April 1, 1965 (un-
published).








pulp and cane molasses were considerably above the prices
that had been prevailing for several years. During the period
studied, the price of both ingredients declined to those levels
(Appendix Tables 5d, e, and f), and as they did, the feed cost
advantage of feeding out beef cattle shifted from the Midwest
to Florida. Thus, it appears that the "freeze" that reduced
the production of citrus pulp in 1962 and 1963, coupled with
a sharp increase in the world price of sugar had an adverse
effect on the profitability of producing livestock in Florida.
The difficulties encountered in obtaining price quotations
on the feed ingredients considered in this study clearly sug-
gest that livestock producers, feed mixers, and particularly
the smaller firms may not be able to obtain enough informa-
tion quickly and economically to utilize the least cost formu-
lation of rations. The larger livestock producers and feed
mixers who utilize brokers and/or deal directly with the major
suppliers have better price information and are able to use
it to reduce their feed costs below those of their smaller com-
petitors. The lack of readily available price information on
citrus pulp and corn cobs is especially apparent.




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