A gross margin can be defined as the gross income from an enterprise less the variable costs incurred in achieving that income. Sale of pigs is the major income source for pork production; while the variable costs have feed and non-feed components.
Feed cost can range from 50% to 70% of total variable costs. Feed costs are determined by grain price, feed additives prices, their proportions in the final ration and the amount of feed in kilograms used to produce a kilogram of pork.
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