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Controlling Finisher Costs |
By Barry R. Kerkaert, DVM |
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I probably don’t need to remind you that
today’s North American swine industry
presents a very competitive marketplace.
As a result, there is renewed focus on the
cost of raising animals from weaning to
market. To put it in perspective, if the average
cost to raise a pig from birth to 270
pounds is $100, you could easily find yourself exceeding
$110 for that same hog should your input costs increase or
if you sell fewer pounds (by changing rations in response to
costs, for instance).
Over the past several years, there have been plenty of solutions
proposed by producers and systems. To stay competitive
long term, you’re going to need benchmarks that
address the cost of raising a pig from wean to finish.
Benchmark number one should be feed cost, of course.
Feed is the most expensive and probably the most scrutinized
input. The industry has gone from not fully realizing
the impact of the cost of feed to making it the primary focus
of success. While there are certainly opportunities to improve
rations, you need to make sure you provide pigs with
adequate nutrition to support proper development and health.
Price of the pig (or the cost of farrowing your own pigs)
must be your second benchmark, because that’s your
second-largest cost. To manage your costs, you must be
picky about health status. Once your operation is plagued
with viruses and bacterial infections, you’ll pay a lot more
to make the pigs profitable long term.
Concentrate on the genetic makeup of the pigs you farrow
or buy. We’ve noted 10% differences in feed conversion
(worth � $4 / head) and growth rate (worth between �
$1.80 to � $8.10 / head) between pigs of different genetics
in the same system fed the same diet.
Here’s a solid goal: aim to purchase a healthy13-pound pig
with competitive genetics
for around $34. That would
also allow the supplier of
that pig to make a profit. If
you raise the pig yourself,
you’ll want at least $28.
Facility costs present
another challenge. In the
past decade, costs went up
approximately 25%, which
should encourage you to
find more efficient ways to use existing facilities. That’s
the motivation behind new wean-to-finish barns, allowing
opportunities to reduce labor, move pigs less often, and
power-wash less often.
Wean-to-finish facilities also enable more flexible flow and
increased stocking rates. A true wean-to-finish system promotes
double-filling and returns yardage costs to the $17-
per-head range. That’s where the industry stood 10 years
ago when traditional finisher barns followed nursery barns.
How well do you manage
transportation costs?
Rising fuel prices add to the expense of moving livestock
from site to site. As a result, keeping pigs in wean-to-finish
barns through all the growth stages becomes more attractive.
Fuel expense hikes also emphasize the importance of
moving pigs in full load lots.
Other transportation considerations include the distance
between facilities, the direction you haul pigs (you need to
gravitate toward slaughter plants, not away), and how you
choose markets.
Animal health costs account for 1% to 2% of total production.
Today, most systems budget between $1 and $2
for animal health. This number reflects both how healthy
animals will be and how responsive producers intend to be.
In some cases, actual animal health may require $2, yet a
producer spends only 50¢ because of complacency or not
recognizing the need for treatment.
You may find other opportunities to manage your miscellaneous
costs, including insurance, marketing, and records.
Although those expenses may vary considerably between
systems, you’ll usually peg miscellaneous expenses at 2%of total cost of production.
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© Copyright 2006 - Pipestone System. All rights reserved |
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