Productivity And Pricing: A Perspective From Corporate Farming


CME: Is Higher Productivity Always a Good Thing?

So higher productivity is always good, right? Not if costs are rising and output must be reduced in order to drive prices higher …

If you missed the CME Group’s webinar on mandatory country-of-origin labeling on Wednesday, it will be available on CME Group website Thursday afternoon. Thank you to the 400-plus who logged in to the webinar and those who attended in person at CME Group headquarters.

High input costs bring production and productivity issues to the forefront so we thought it might be a good time to revisit the productivity records of the three major animal protein sectors. The graphs below provide a very comprehensive measurement of industry productivity: output per female or, in the case of hogs, output per breeding animal since we have no direct estimate of the number of females in the U.S. herd. This measure encompasses most of the key productivity factors including breeding efficiency, birth rate and slaughter weight. Implicit in this measure is also rate of gain. If animals grow faster, they will add more total weight each year and thus increase productivity. The charts generally represent the productivity of fixed assets such as land, buildings and equipment as well since those are closely correlated to breeding animal numbers. Feed efficiency is the most critical productivity factor for which these charts do not provide much information.

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