Allan E. Lines The Ohio State University

Publish Date: June 3, 2006

We will address the question from the buyers perspective, the only reasonable viewpoint to take. In the final analysis, the buildings are worth what they can earn. What the seller or current owner wants is not relevant to the question and should only be viewed as identifying the field where the game is being played. This analysis suggests that used, recently constructed swine production facilities, in this case farrrow-to-finish, are not worth very much, at least relative to the cost of constructing the facilities. Whereas, it may cost as much as $3000 per sow to construct new facilities, this analysis suggests that facilities with an expected life of five years would only be worth between $400 and $500 per sow. Increasing the expected life to 10 years might increase the value to only about $800 per sow. These low values are substantiated by the fact that most university enterprise budgets suggest a loss of between $150 and $200 per sow per year when newly constructed facilities are operated using average management.

Publish Date: June 3, 2006

The U.S. pork production industry continues to move rapidly towards fewer farms producing an increasing amount of the nations hogs. This movement toward fewer, but larger, producers has been made possible by added capital investments for facilities, equipment, and various production inputs which have replaced, or have been substituted for, manual labor on many farms.