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USDA, ERS, Oregon State University, Corvallis 97331 and and University of California, Davis 95616,1
Abstract
Production isoquants or trade-off curves describe all combinations of two inputs required for a particular level of output. Traditional production economics theory has always presumed that isoquants would be convex to the origin over the relevant range of substitution between inputs. Empirical derivation of forage/grain trade-offs in cattle feeding shows that isoquants are in fact concave. This finding implies that the least-cost combination of forage and grain for a given increase in live weight will require either a high roughage or a high concentrate diet. Isoquants for successive increments of live weight gain become progressively steeper, tipping away from the hay axis. Thus, optimum use of forage and grain involves dividing the feeding period into an early stage with a high roughage diet and a final stage with a high concentrate diet. As the relative prices of forage and concentrate change, the time or growth on one diet should be reduced and time on the other increased. In general, where production isoquants are concave, it is not economically rational to change the ratio of forage to grain in either the growing or finishing diet in response to price changes. It is suggested that the applicability of experimental results will be enhanced in cases in which treatments emphasize extreme rather than intermediate ratios of roughage and concentrate.
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