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Take action when pig margins are squeezed

When margins are tight, pig producers need to focus on opportunities to save money to keep their business profitable in the long term. Covering feeding and husbandry, a leading Irish researcher offers practical tips for a more sustainable pig farming business.  

With the pork industry in Europe going through tough times, it’s important for pig farmers to focus their efforts on what they can do to improve the economic sustainability of their farms. This was among the top tips that Ciaran Carroll, Head of the Pig Development Department at Teagasc, shared during a recent webinar on ‘Getting through tough times: coping with low prices’ hosted by the Pork group of the Agricultural and Horticultural Development Board (AHDB) of the UK.

Teagasc is the agriculture and food development authority in Ireland, and its mission is to support science-based innovation in the agri-food sector that will underpin profitability, competitiveness and sustainability.

According to Carroll, success starts with a positive attitude. Farmers need to focus on what they can control, namely what happens inside the farm gate, and that includes measuring current performance and benchmarking against other similar businesses. After drawing up a plan and implementing it, he recommends monitoring progress and the gap will close with better-performing units.

Focus on feed 

With feed accounting for 70% of total production costs, greater efficiency here can have a significant effect on the bottom line. Just one 5-ml spoonful of wasted feed per pig per day represents a 5% deterioration in feed conversion efficiency (FCE), according to Carroll. For finishers, a 0.1-unit improvement in FCE can be worth as much as £1.55 per pig or £0.02 per kg deadweight (dwt) (£1 = $1.39 =  1.28, March 1, 2016).

Cost-saving options for the feeding herd

As 60% of total feed costs are generated by the finishing herd, start by reducing wastage by repairing or replacing broken feeders, adjusting feeders regularly and ensuring the correct amount of trough space per animal, Carroll advises. A 4% reduction in feed wasted is worth £1.55 per pig (£19,000 for 500-sow herd), he says.

Instead of feeding just one finisher diet, producers can save £0.64 per pig by feeding two finisher diets: a high-energy diet from 32 kg (70 lbs), followed by a lower-energy diet from about 60 kg (132 lbs). That change could be worth £8,000 per year for a 500-sow herd, he calculates.

Where contracts allow, increasing slaughter weights can also help boost margins. There will be additional costs (feed and non-feed) and FCE will be reduced slightly, but the additional weight of pigs sold could mean more profit to the producer. According to Carroll’s calculation, additional costs of £0.94 per kg dwt are set against a higher pig price of £1.09, giving a net profit of £0.15 per kg dwt, or £16,000 per year for a 500-sow herd.

Split-sex feeding is also worth investigating, Carroll says. Up to 85 kg (187 lbs), gilts and boars have similar FCE, but for each 10-kg (22-lb) further increment in slaughter weight, the gilts’ FCE deteriorates faster. Selling gilts at 99 kg (218 lbs) and boars at 109 kg (240 lbs) could be worth £1.55 per pig or £19,000 for a 500-sow herd.

Turning his attention to the youngest pigs, feeding too much expensive creep diet could be costing the farmer dearly. Carroll recommends feeding a fixed weight of creep, say 3 kg (6.6 lbs), and then switching to a cheaper link feed.

Similarly, it does not make economic sense to feed an expensive weaner feed for too long. Switching to a first-stage finisher ration at 32 kg (70 lbs) could save UK£1.55 per pig or another £19,000 per year for a 500-sow herd.

Finally, formulating feeds on the basis of net energy gives a more accurate reflection of the true feeding value than the more traditional digestible energy, especially for high-fiber ingredients. Potential savings could be around £1.55 per ton (£5,500 per year for a 500-sow herd).

Better breeding herd management

A gilt will consume 210kg of feed and each excess or culled gilt incurs a feed cost of £47 so farmers need to ensure they don’t have too many gilts in the gilt pool. The target should be 12% of herd size.

Similarly, unproductive sows must be culled with the minimum of delay. There is no advantage in keeping them to restore body condition. Each empty day costs £2.30 so just 10 empty days per litter works out at £27,000 for a 500-sow herd.

Savings potential in other areas

Average labour costs tend to vary widely among farms from £0.09 per kg live-weight to £0.17, according to Carroll. Reducing labor may not equate to reduced productivity, and it is worthwhile considering hiring casual workers for routine tasks such as washing pens and equipment.

At one time, pig manure or slurry disposal would have incurred a cost but it has doubled in value over recent years to £23 per 1,000 gallons at 4.3% dry matter.  Pig farmers should make sure they are charging for the slurry or at least share costs with the customer farmer.

On energy, Carroll urged pig producers to explore options for cheaper rates for electricity, and to replace tungsten light bulbs with T5 or T8 fluorescent bulbs. Also, heat pads use just 20% of the electricity of space heaters, providing the controllers and time of use are checked regularly.

Producers should check that the heating and ventilation systems are working together and not against each other. Cleaning dirty fans can reduce energy use by as much as 20%.

Carroll stressed the importance of keeping control of other business expenses. Producers should know their debts with the bank, merchants, contractors and service providers. Analysis of cash flow helps establish the current position of the business, identifies if there is a need for restructuring and indicates its long-term viability. For this, accurate records are essential and, combined with production performance figures, they can be used to highlight the areas of greatest financial impact.

Finally, Carroll urged producers to get involved in discussion groups in order to exchange ideas, and to keep abreast of the latest developments and adopt new research findings.

To learn more about the webinar and Carroll’s presentation, visit the AHDB web site.

 

For more information on managing the economics of pork production, see Exports, advertising help pig producers under pressure in the UK

Take action when pig margins are squeezed
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