ECONOMIC USE OF FORAGES IN LIVESTOCK PRODUCTION 41 
On the basis of these data, apparently for those farmers who are 
able to do a good job of predicting prices and costs there may be a 
substantial advantage in adjusting the feeding system for feeder cattle 
each year in accordance with expectations. Those who are not able 
to estimate future price relationships well will probably be better off 
if they follow one system consistently. According to these data, dairy- 
men and hog producers would find only a small advantage in changing 
their feeding systems from year to year, even if they were able to 
predict future cost relationships accurately. It should be recognized, 
however, that the alternative feeding systems considered here repre- 
sent only a few of the large number of possible feed combinations. It 
is possible that the most desirable combination, from the standpoint of 
profitability and risk or uncertainty, may differ from any of the 
feeding systems considered in this report. 
ADJUSTMENTS IN LEVEL OF PRODUCTION 
The foregoing analysis was concerned with selection of the best 
* feed combination for given levels of livestock production. But along 
with selecting the optimum grain-forage combination, the individual 
farmer must decide whether to feed his dairy cows to produce, for 
example, 7,500, 8,500, or 10,000 pounds of milk. He must decide 
whether to sell his hogs at 200, 225, or 250 pounds. The most profit- 
able level of production depends on the price of the product relative 
to the prices of the production factors, and on the response in pro- 
duction to the application of successive units of the productive factors. 
More precisely, the most profitable level of production is attained 
when the cost of adding the last pound of livestock product per animal 
just equals its price. Any change in either the price of the product 
or the cost of the factors of production will alter the optimum level 
at which to produce. As price and cost relationships change continu- 
ally, selection of the level of production involves considerable risk 
and uncertainty. 
As the production process progresses, a farmer may continually 
revise his estimates of prices in relation to costs and, up to the time of 
sale, he may make some adjustments in the level of production. For 
example, when his hogs reach a weight of 200 pounds he can decide 
whether it will pay to carry them to heavier weights. The closer 
he comes to the date of sale the better his estimates of prices will be. 
But even then he cannot predict exactly the price that will be obtained 
on a particular day, as day-to-day variations in prices are often large. 
Nevertheless, as additional information is ordinarily obtained as the 
production process progresses, estimates of expected price-cost rela- 
tionships, and consequently the planned levels of output, are constantly 
revised. With each revision of the planned level or production, he 
needs to adjust the forage-grain combination in the ration if rates 
of substitution between feeds or the risk and uncertainty associated 
with various rations differ significantly. 
SUMMARY 
Grasses and legumes may contribute indirectly to farm income by 
increasing or maintaining yields of other crops during a period of 
