Agribusiness Review - Vol. 10 - 2002

Paper 1
ISSN 1442-6951

Household Animal Raising Behaviour in China's Developed Regions: The Case of Zhejiang Province 1

Xi-An Liu  Zhang-Yue Zhou  - Asian Agribusiness Research Centre, The University of Sydney, Orange NSW 2800
and
Hua-Yong Teng and Qing-Fang Guo - College of Economics and Management, China Agricultural University, Beijing China 100094

• 1. Introduction.
• 2. The Survey
• 3. Findings.
• 4. Summary and Concluding Comments.
• References.
• Appendix.
• Footnotes

Abstract

Due to the dominant role of household animal raising in China's animal production, an improved understanding of household animal raising practices is essential to study China's feedgrain markets. It is also noted that the level of local economic development affects animal raising practices and the development of feedgrain markets. This paper reports the findings from a rural household survey we conducted in a developed coastal province of China. It was specially designed to examine issues related to household animal raising practices such as animal raising scale, sources of feed, feed processing and feeding efficiency in a developed area. Discussed also are the implications that the findings have for China's regional feedgrain markets.

1. Introduction

There are three kinds of animal raising practices in China: (1) very small-scale traditional household backyard animal raising; (2) specialised animal raising households; and (3) larger-scale animal feedlots. The former two occupy an important share: for example, in 1998, about 95% of China's pork was produced by the former two animal raising practices. Backyard animal raising alone produced some 80% of total pork production (Qi 1999, p. 2).

Although the share of animal production by backyard animal raising has been declining in the past years, the share by specialised animal raising households is increasing (NORHS 1998; Qi 1999, p. 2). Hence the total share of production by these two practices has remained at a similar level in the past years. This makes it extremely important to gain an improved understanding of the household animal raising practice in order to better understand China's feedgrain issues.

Despite the importance of understanding the household animal raising practice, studies conducted at the farm level are not extensive. Earlier attempts include Zhang and Lu (1997), NORHS (1998), Zhang (1998), and Wang et al. (1999).

Using data collected by the National Office for Rural Household Surveys, Zhang and Lu (1997) examine changes in pig production scale and structure and feed conversion ratios between provinces. NORHS (1998), based on a survey of some 5000 households of seven provinces, discusses a number of issues related to animal production, e.g., composition and changes of animal feeding practices, feed source and conversion ratios.

Zhang (1998), using the same set of data as NORHS (1998), examines issues related to pig production only. Zhang provides an analysis and comparison of economic returns from pig production between the seven surveyed provinces. Wang et al. (1999), based on a survey of some 300 pig raising households in Sichuan province, also address issues such as feed use and conversion ratios and pig raising costs and returns.

Cao (1998) believes that China's animal production is still largely a sideline operation by many farm households as evidenced by the fact that, on average, each household raises only two pigs a year.

However, due to the high homogeneity of Chinese farm household size and other economic similarities, Chinese farmers tend to respond to market signals simultaneously and similarly. Any small adjustment in an animal production decision, e.g., raising one more or one less pig, by the many millions of Chinese farmers can generate a huge impact on the market. It is in this sense that Cao reinforces the importance of studying the animal raising practice at the household level.

It is also important to examine household animal raising behaviour in different regions. Being such a vast country, China has regional variations in many aspects that affect feedgrain demand and supply.

Previous studies on China's feedgrain market have dealt with the issues largely at the aggregate national level. Zhou et al. (2001), however, point out that regional characteristics need to be taken into consideration so as to gain useful insights in understanding China's feedgrain issues.

As part of a GRDC-funded three-year project on the development and prospects of China's feedgrain market, we conducted household surveys on household animal raising practices in four regions in China.

The four regions were chosen with the following distinctions: a traditional pig-raising region (Sichuan province), a feedgrain-surplus region (Jilin province), an economically developed region (Zhejiang province) and a region that is economically less developed, lacks feedgrains and is dominated by small-scale traditional backyard animal raising (Henan province). 

This paper reports the findings from our rural household survey conducted in Zhejiang, a south-east coastal province that is developed.

Through the survey, we attempt to find out the reasons why farms engage in animal husbandry, the composition and sources of feed, feed-meat conversion ratios, farmers' responses to input and output price changes, and their intention towards future animal husbandry.

In the next section, we describe the administration of the surveys. In Section 3 we report and discuss major findings. We summarise the key findings from the survey and discuss their implications in the final section.

2. The Survey

Conducted in May-June 2001, the survey examined two hundred and seventy households selected from six villages in Jiashan county, Zhejiang province. The position of the surveyed region is indicated in Map 1.

Map 1. Map of China: Showing the Surveyed Province

Zhejiang province is situated in China's south-east corner. By land area, Zhejiang is one of the smallest provinces in China (being 1.1% of China's total land area), yet it is one of the most economically developed regions - it produces 6.8% of China's GDP. Its per capita income in 2000 (¥6700) was almost double the national average (¥3711). Telephone possession is very high: in rural areas, per 100 households telephone possession in 2000 was 61 sets for fixed phones and 20 sets for mobile phones (compared to the national average of 26 sets and 4 sets, respectively).

Due to rapid industrialisation and urbanisation, the opportunity cost for agriculture is high. The share of agriculture in total GDP has declined rapidly from 38% in 1978 to 11% in 2000. Crop and animal husbandry is also on the decline. In 1987, per capita grain output and meat output in Zhejiang were 386 kg and 20.9 kg, respectively, slightly higher than the national averages of 379 kg and 20.7 kg, respectively. By 2000, however, both per capita grain output (271 kg) and per capita meat output (26.2 kg) were lower than the national averages of 374 kg and 49.5 kg, respectively. Hence, while per capita meat output was marginally increased, per capita grain output had significantly dropped.

Limited resources can be spared to produce feedgrains, and feedgrain production is low. The percentage share of corn output - the major feedgrain item - out of total grain production in 2000 was less than 2% (Table 1). Imports of feedgrains have to be used and corns are mainly sourced from China's north-east provinces. Traditionally, barley is used to feed pigs in order to produce a kind of special ham (Jin-Hua Ham). Some low quality rice is also used for feed. At the provincial level, although the gross value of animal husbandry has increased, its share out of total agriculture declined from 24% in 1990 to 17% in 2000. The number of pigs in stock also declined in 2000 compared to 1990. The number of pigs slaughtered, on the other hand, increased slightly (Table 1). At the national level, the proportion of the number of pigs slaughtered in Zhejiang out of the national total has also declined, from about 5% in the early 1980s to 2.6% in 2000 (see Table A1 in the Appendix).

Table 1. Feedgrain Production and Meat Production in Zhejiang Province

Note: Agriculture includes farming, forestry, animal husbandry, fishery and other economic activities carried out by agricultural population.

Sources: Ministry of Agriculture (1990, pp. 2, 36-37, 46-55, 142-144, 166), Ministry of Agriculture (2000, pp. 2, 8, 31-39, 56-68, 150-153).

Jiashan county is situated in the north-east plain of Zhejiang. Three major cities, Suzhou, Shanghai and Hangzhou (capital of Zhejiang), are located nearby and provide an important market for the county's animal husbandry products. This county was chosen for the survey due to its predominant meat production position in the province. It is a commercial pig production base of Zhejiang province and is also famous for piglet reproduction. Those pig feedlots in the nearby major urban centres are important buyers of piglets produced in this region.

Six villages, three from each Xiang were selected. The gross value of animal husbandry out of regional gross value (total output produced in the region from both agricultural and non-agricultural activities) in these villages ranged from 2% to 35% in 2000 (see Table 2). In the past few years, the share of animal husbandry gross value out of regional gross value in three out of the six villages has declined, with two remaining the same and only one experiencing an increase.

Table 2 also reveals that the gross value generated by activities other than farming and animal husbandry accounts for an important share in all except one village. All the villages have access to at least one major road but there are no extension services within their villages.

Table 2. Basic Indicators of Surveyed Villages

Due to the high labour opportunity cost and concerns of releasing family business and financial information, conducting surveys with rural households in such economically developed regions has become increasingly difficult. Strict random selection of households was not feasible - due to the likely high rate of rejection for being surveyed. The households chosen were largely according to local cadres' understanding of the village situation. Therefore, the sample is likely to be biased in favour of those that do raise animals, particularly those that raise pigs. This, however, should not pose any major problem for this study as it is mainly concerned with the animal raising behaviour. Nonetheless, it is noted that it would be ideal if random selection could have been used as that would give us a more accurate picture about the share of households that do not engage in raising animals.

In Jiashan county, pig production occupies an overwhelming position. The majority of feed is used for raising pigs (over 80%) with a small share used for poultry production. Cattle and sheep production is not significant. This is in line with the broad pattern of animal production at the national level as shown in Table A2, which reveals that the proportion of farms raising beef cattle and sheep is relatively small. Therefore, in the rest of the paper, the discussion is focused on pig production.

3. Findings

Of the 270 surveyed households, 235 households (87%) raise pigs and 35 of them (13%) do not raise pigs. [2] Among the 235 households that raise pigs, 159 (68%) were backyard animal keepers (raising 15 hogs or less) and 76 (32%) were specialised (raising more than 15 hogs). [3]

3.1 Reasons for Raising or not Raising Pigs

It is very useful to find out why some households do not raise pigs. It is of special interest to know whether some households choose not to raise pigs because their income has increased. If that is the case, then one would anticipate that fewer and fewer households would raise animals when their income level increased. This would probably lead to larger-scale animal raising units which would have subsequent effects on feed sourcing and feed usage.

We obtained the following responses from our survey as to why some households do not raise pigs (see Table 3).

Table 3. Reasons why Farmers Do not Raise Pigs

(35 respondents)

The results show that whether a farmer raises pigs or not has little to do with income level. It is also not related to whether raising pigs is too troublesome or too dirty. This is somewhat surprising and needs to be verified by further investigations. Thus, the assertion cannot be confirmed that a farmer would give up pig raising after income increase because of the troubles and dirtiness associated with pig raising. In fact, except for those households that never bothered to raise pigs (23.1%), the reasons why other households do not raise pigs are primarily based on economic considerations (64%): it is not profitable and the opportunity cost is too high.

Results in Table 4 clearly show that the most important motivation for farmers to raise pigs in this region is to increase family income. Home consumption is not a major consideration. Disposing of surplus grains and collecting manure are not an important consideration either. Thus, whether farmers raise or do not raise pigs is largely driven by economic considerations in this region.

Table 4. Reasons why Farmers Raise Pigs

(205 respondents)

The age and education level of the household head and the farm size have little influence on whether a farm will follow the traditional backyard animal raising practice or will become a specialised household (Table 5).

However, a family with a larger size and more labour is more likely to become a specialised animal-raising household. According to our investigation, pig-raising expertise and the availability of funds seem to be the other two important reasons that affect a farm's pig-raising scale.

 It is interesting to note that the heads of those households that do not raise pigs tend to be younger and have more years of education. These families are also relatively smaller and their farm size is also smaller (Table 5).

This tends to suggest that, in this region, the smaller nuclear family with a higher level of education may lead to a reduced intention to raise pigs in the future, implying that the number of farms engaging in pig raising will reduce.

Table 5. Attributes of Surveyed Households

Note: Figures in brackets are coefficients of variation.

3.2 Feedgrain Production

The survey results tend to indicate that feedgrain production in this region has been declining and is unlikely to increase in the future. The respondents were asked, compared to five years ago, what changes had happened to their area sown to feedgrains (e.g., corn, barley) and forage crops. The responses obtained are given in Table 6.

Table 6. Changes in Sown Area to Feedgrains and Forage Crops

(247 respondents)

It can be seen that, in balance, more farmers have chosen to reduce their area allocated to feedgrain and forage production. For the few who indicated that their area sown to feedgrain production and forage had increased, the major reasons they gave were for on-farm use (30%), for high yield (28%), and for a good price (28%).

When asked how they would plan their sown area to feedgrain and forage crops in the near future (2-3 years), the replies suggested that the sown area is unlikely to increase but may decline (see Table 7).

Table 7. Future Changes in Sown Area to Feedgrains and Forage Crops

(240 respondents)

3.3 Composition and Sources of Feed

Figure 1 shows the composition of feed use by backyard animal raising and specialised households. It is clear that, in this region, industrial processed feed was a major component of feed, accounting for over 50% in both cases (56% and 51% for backyard animal raising and specialised households, respectively). The next major component of feed is raw feedgrains, chiefly corn, being 19% and 29% for backyard animal raising and specialised households, respectively. It is noted that the share of industrial processed feed used by specialised households was lower than that used by backyard animal raising, but the former use more raw feedgrains than the latter. According to our investigation, the reason for this is that the larger-scale specialised households find it cheaper to buy raw feedgrains to process and mix meals for animals on site. Altogether, specialised households use more feedgrains and industrial processed feed (80%) than the backyard animal raising households (75%). This is anticipated, as the labour cost is lower for smaller-scale backyard animal raising households to handle those feed components such as table scraps. The use of "other" feed (including table scraps, oil meals, tuber crops, and distillers' by-products) by specialised households is minimal, being 3%.

The share of feed from the on-farm source reduces as the feeding scale increases. For example, when the feeding scale is 1-5 head of pigs, this share is 37%. When the scale is increased to 6-10, it reduces to 29%. It tends to reduce further when the scale increases. This indicates that the purchased feed accounts for a significant portion of the total feed and the larger the feeding scale, the higher the share of the bought feed.

Both backyard and specialised animal raising households buy feed from similar outlets. For feedgrains, rice and wheat bran, tuber crops, soy meals and distillers' by-products, 44% of backyard animal raising farms obtain such feed from local markets, 45% from private merchant shops and 11% from grains and oil processing firms. The corresponding percentages for specialised households are 33%, 40% and 27%. Specialised households buy relatively more from grain and oil processing firms than from local markets; this reflects the fact that their larger demand for feed enables them to deal with such processing firms rather than engage in tedious bargaining in the markets. For industrial processed feed, the major outlet is private feed companies in the local towns (92% for backyard and 98% for specialised).

According to the survey, only a very small portion of the respondents answered that they used additives in their animal feeding: 6% and 20% for backyard and specialised, respectively. Two reasons are likely responsible for this. (1) This region raises a high portion of sows. Additives are less critical because sows do not need to gain weight as do hogs. (2) In recent years in China, additives seem to have been abused and this has caused high levels of residuals in final products. Increasingly health-conscious consumers have been very concerned and tried to avoid such products. Producers, being aware of such concerns, have tried to distance their products from the use of additives. During our survey, we noticed that many respondents avoided using the term "additives"; instead, they chose to use the term "micro nutrients". Therefore, some respondents might have significantly underestimated their use of additives.

3.4 Feed-Meat Conversion Ratios

Feed-meat conversion ratios are a critical variable in feedgrain demand projections (feed here refers to fine feed only). To date, there are not many commonly accepted such ratios. This may be not surprising due to regional differences and different animal raising practices. NORHS (1998) believes that specialised households have a higher feeding efficiency than backyard animal raising households and therefore the former have a lower feedgrain-meat conversion ratio while the latter group has a higher conversion ratio. However, others argue that backyard raising has the smallest feedgrain-meat conversion ratio because this practice uses less feedgrains but more other feed components (Guo et al., re-cited from Zhang, X.H. 1998).

Our survey results show that, at the all-six village level, the difference in feed-pork conversion ratios between the backyard and specialised practices is marginal, being 3.13 for the former and 3.08 for the latter. [4] This is perhaps because the composition of feed used in both cases is similar, as shown in Figure 1. Therefore, the conversion ratio is likely to be affected more by feed composition and pig breeds than by the scale of production.

Nonetheless, the results do show that the feedgrain-pork conversion ratio of specialised households is lower, though marginally, than that of backyard animal raising households, indicating the former has slightly higher efficiency compared to the latter. This is also confirmed by the number of days that pigs are kept in the pigsty before slaughtering. Figure 2 clearly shows that the number of days that pigs are kept in the pigsty reduces as the raising scale increases.

3.5 Producers' Responses to Changes in Input and Output Prices

When the prices of feed, industrial processed feed, and animal products change, we would expect farmers accordingly to adjust their decisions on the amount of feed to be used and the number of animals to be raised. In our surveys, we obtained farmers' responses on their possible decision adjustments in relation to various price change scenarios. These responses are reported in elasticity terms in Table 8. It is noted that the elasticities given in Table 8 are arc elasticities.

Based on the results given in Table 8, the following conclusions can be drawn:

When price changes are in favour of producers, generally one would expect that producers would respond positively. The results from the survey support such an expectation. However, for both backyard and specialised animal raising, short-term elasticities are somewhat higher than long-term price elasticities. [5] One would expect that the short-term elasticities might be smaller than, or at most similar to, the long-term ones. This is because during a short time period, the number of animals is fixed and one would not buy more feed just because it is cheaper and one would have only a limited number of animals that are ready to be sold to the market. Further investigation on this contradiction is needed.

When price changes are not in producers' favour, one would expect that the short-term price elasticities would be smaller than the long-term ones (in absolute value). This is because once the commitments are made, e.g., the raising of a certain number of animals at a given time, then the inputs have to be resorted and the outputs have to be sold. The results show that the short-term price elasticities are smaller than, or very similar to, the long-term ones.

Whether the price changes are in the producer's favour or not, responses tend to be greater to industrial feed price changes than to feedgrain price changes. This is because in this region industrial processed feed accounts for a major portion of total feed use (see Figure 1). Farmers are less responsive to coarse feed price changes perhaps because these feed items are less expensive or they account for a small portion of total feed.

Among all short- and long-term elasticities, the response to animal product price change tends to be the largest. This indicates that, ceteris paribus, output price delivers a stronger message to producers.

In both the short and the long run, the price elasticities for backyard animal raising are smaller than those for specialised household animal raising. This suggests that, in an economically developed area, specialised households seem to be more responsive to price changes than their backyard counterparts. It is possible for specialised households to be more responsive to market changes in such regions because there are more other opportunities available to them.

Both groups of farmers are more responsive when price changes are in their favour. Thus, if the input price reduces, it is likely that they will use more of such inputs. Or if the output price increases, they will produce more.

Table 8. Elasticities of Feed Use and Production Scale in Response to Input and Output Price Changes

3.6 Producers' Intention towards Future Development of Animal Husbandry

Based on their current production cost and income, the majority of the respondents had chosen not to increase their production scale (Table 9). It is clear that backyard animal raising in this region will not expand, instead some farms may quit the pig-raising industry. Some 20% of specialised households are willing to expand. The possible future scenario is that fewer but larger scale pig-raising will be emerging in this region.

Table 9. Intention to Expand Animal Raising Scale

Most farmers have related the difficulties in expanding their animal raising activity to the economic returns: they complain that the output prices are low (66.5%) but the input prices are high (12%) (Table 10). Most of those who gave these answers have a relatively larger feeding scale. The next major difficulty is the limited space (5.3%). A few believed that they lack the expertise or labour. Very few believed that marketing was a problem (1.9%) - proximity to three major urban centres give farmers in this region a huge advantage in disposing of their products. Low feedgrain production in this region is not thought to be a problem by any of the respondents. They can always import feedgrains if it is economically worthwhile.

Table 10. Major Difficulties Farmers Face in Expanding their Production Scale

(209 respondents)

Had they intended to expand their production scale, the way they would source their increased feed is overwhelmingly through purchasing feedgrains or processed industrial feed (78.8%). Some would expand feedgrain production (7.4%). Others would choose to buy more rice bran or wheat bran (1.4%) or tuber crops, distillers' by-products, or soybean meals (3.2%); those who choose these options generally have a smaller feeding scale. None would choose to buy table scraps from restaurants or other places; perhaps it is too troublesome to do so. The other 9.2% of the respondents choose to use various "other" ways to increase their feed.

4. Summary and Concluding Comments

This paper reports the findings from a survey that examines issues related to the farm household animal raising practice in an economically developed region in China. The survey was conducted in May-June 2001 in Jiashan county of Zhejiang province. Of the 270 households surveyed, 87% raised pigs and 13% did not raise pigs. Except for those that never raised pigs, the reason why farmers raise pigs or not is largely driven by economic considerations.

Feedgrain production in this region has been declining and is unlikely to increase in the future. The composition of feed used by backyard animal raising and specialised households is very similar, with raw feedgrains and industrial processed feed as the major component, accounting for over 75%. Farms buy a significant portion of their feed from the market. This portion increases as the feeding scale increases.

At the village level, the feedgrain-pork conversion ratios of specialised households are marginally lower than those of backyard animal raising households. The number of days that pigs are kept in the pigsty reduces as the raising scale increases. It seems that specialised households have slightly higher efficiency compared to their backyard counterparts.

When the animal raising scale is small, a household relies less on the market for obtaining its feed inputs and for the disposal of its animal products, and thus it is less responsive to price changes. When the scale increases, a household's reliance on the market increases and subsequently becomes more responsive to price signals in the market. In the surveyed regions in Zhejiang province, specialised animal raising is more responsive to price changes than is backyard animal raising.

Not many farmers are willing to expand their production scale. Apart from concerns about economic returns, limited space in this highly populated area has been indicated as a constraint for the expansion of animal production.

Hence, according to our survey, feedgrain production in Zhejiang province will continue to decline and feedgrain imports will be necessary. The number of farm households that raise animals will decline. However, the remaining animal raising farms are likely to increase their production scale. Overall, the trends tend to indicate that the animal husbandry industry in Zhejiang province is unlikely to expand but may gradually shrink.

As far as feedgrains are concerned, in this economically developed region, farmers can afford to buy feed and will buy more when their production scale increases. In addition, our survey results show that farmers are more responsive when price changes are in their favour. Thus, if feed prices reduce, it is likely that they will use more of such inputs. Given that China is now a member of the WTO, it will gradually open its grain markets. Increased market opening up may lead to lower grain prices in China. Consequently, how this may affect the demand for feedgrains in this region deserves continued attention.

References

Cao, L.Q. 1998, 'Is animal production by households still a sideline operation?', Reference Materials for Rural Economic Research , No. 8, pp. 26-29.

Ministry of Agriculture, Chinese Agricultural Statistics , various issues, China Agricultural Press, Beijing.

NORHS (National Office for Rural Household Surveys) 1998, 'A comparative study of production efficiency and profitability of various animal raising practices', Reference Materials for Rural Economic Research , No. 8, pp. 20-25.

Office for National Agricultural Census 1998, Highlights of China's First Agricultural Census , China Statistical Press, Beijing.

Qi, J.F. 1999, Yearbook of China Animal Husbandry Industry 1999 , China Agricultural Press, Beijing.

SSB (State Statistical Bureau), China Statistical Yearbook , various issues, China Statistical Press, Beijing.

Wang, J.M., Zhou, L., Liang, S.M. and Fan, C.H. 1999, 'Cost structure of pork production: A case study of Sichuan province', Problems of Agricultural Economics , No. 4, pp. 24-27.

Zhang, X.H. 1998, 'An analysis of household pig raising situation and economic return in China', Chinese Rural Survey , No. 1, pp. 53-61.

Zhang, X.H. and Lu, M. 1997, 'Pig production scale and feed conversion ratios', Chinese Rural Economy , No.10, pp. 63-66.

Zhou, Z.Y., Tian, W.M., Liu, X.A. and Wan, G.H. 2001, An Issue of Debate: China's Feedgrain Demand and Supply , AARC working Paper Series, No. 15, Asian Agribusiness Research Centre, The University of Sydney.

Appendix

Table A1. Number of Slaughtered Livestock Animals in China (2000)

Source: Ministry of Agriculture 2001, China Agricultural Statistics , p. 150.

Table A2. Distribution of Animal Raising Scale and Proportion of Farms Raising Animals (1996 Census)

Source: Office for National Agricultural Census 1998, Highlights of China's First Agricultural Census , p. 51.

Footnotes

[1] A revised version of a paper presented to the 46th Annual Conference of the Australian Agricultural and Resource Economics Society, 13-15 February 2002, Canberra, Australia. This paper is part of the GRDC-funded project, 'China's Regional Feedgrains Markets: Development and Prospects'. GRDC's support is gratefully acknowledged. The authors wish to thank Professor Wei-Ming Tian of China Agricultural University for his assistance in this study. We also wish to thank the delegates of the conference for their useful comments and Marjorie Wilson for her editorial assistance.

[2] As noted earlier, the sample is likely biased in favour of those households that do raise animals, particularly those that raise pigs. The actual share of households that do not raise pigs is likely to be somewhat higher than this percentage.

[3] The minimum number of head of pigs a household needs to raise in order to be classified as a specialised household varies from region to region. For example, in feedgrain surplus regions like Jilin province, this number is much larger than that in other provinces. In this study, we have largely followed the local practice - using 15 as a distinction between the two raising practices. Further, in our study, one sow is treated as equivalent to two hogs, and five piglets are equivalent to one hog. This consideration is mainly based on feed requirements. In China, generally, raising one hog requires about six months and hence keeping one sow for one year would require the amount of feed roughly equivalent for keeping two hogs.

[4] Feed-meat conversion ratios are averages that are calculated based on fine feed: how many kilograms of fine feed are needed to produce one kilogram carcass weight of pork. Fine feed in this study refers to feedgrains (mainly corn and barley), manufactured feed, rice and wheat bran, oil meals, and distiller's by-products. Coarse feed includes agricultural by-products such as crop stalks, forage and tuber crops, grass and leaves.

[5] Decision adjustments about feed use can be made within a relatively short time span and thus changes in feed use largely represent short-term price responses. On the other hand, changes in production scale take a relatively longer time and thus represent long-term price responses.