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The traditional pork production system in the upper midwest has been characterized by open markets for both inputs and outputs. In general, all parts of the production and marketing channel have responded to the collective effects of the individual production and marketing decisions made by hundreds of thousands of independent hog producers. The prices on the input and the output side of the channel have responded to the im coordinated decentralized decisions made at the production level. These open market prices acting through a broadly defined set of commodity grades have served as the primary coordination mechanism for all parts of the channel. See figure 1. This producer centered system has been the dominant means of production and marketing for hogs up to the present time. If the sheer number of hogs marketed is used as the measure, the open market price system still plays the major role in coordinating the industry, but rapid changes are now occurring.