The following list focuses on changes, which can be implemented and monitored easily and inexpensively. In most cases, we have estimated the effect in terms of dollars per pig marketed.

The following checklist of cost saving and revenue generating ideas focuses on immediate payback with minimal or no investment in capital improvements. It is understood that changes to breeding herd management, health status and equipment purchases such as wet/dry feeders would add further to the potential savings but because of their longer-term or strategic role in your business are considered fixed for the present discussion.

Feed budgeting

Most feeding programs today are based on a feed budget – or should be. Fundamentally, a feed budget defines the performance expected on a particular farm and builds a feeding program designed to achieve it. In its simplest form, a feed budget defines the quantity of each diet to be fed to each pig and the cost of that diet. A feed budget can therefore be used to monitor actual – as opposed to expected - feed usage. Both functions – feeding program development and monitoring of results - can be extremely valuable to the individual producer.

Typically, certain assumptions have to be made with respect to feed intake, expected performance and variation in performance before specific diets can be formulated. Nonetheless, the development of a feed budget makes the feeding program farm specific and also lays out the basis for expected results. In terms of “surviving tough times,” the feed budget can help out in numerous ways.

A feed budget provides a foundation of expected performance. Actual measures of performance can be measured and compared with the expectations. If there is a shortfall in performance, corrective action can be taken. One might either alter the feed budget to reflect the reality of animal performance, or take action to address the shortfall in performance. Figure 1 illustrates the results of tracking a feed budget in a nursery and determining that insufficient quantities of the Phase 1 starter were being used. When the correction was made, the performance of the pigs, in terms of nursery exit weights, was profound. Nursery exit weight increased from 30.3 kg to 33.2 kg.

Figure 1. Impact of meeting feed budget Feed budgets also allow the pork producer to compare actual feed usage and costs with expected usage and costs.

As shown in Table 1, which for the purpose of illustration only shows the nursery stage results, a feed budget will define the amount of each diet to be used and their costs. If the feed cost on the Income Statement differs from budget, action can be taken to address the deviation. For example, if according to the income statement, the feed cost per pig sold is found to be too high, one can determine very easily if the reason for the overage is due to excessive quantity of feed being used relative to the budget, or if the cost of the diets is higher than originally budgeted. Clearly, the solution to one cause of the problem (usage) will differ from that of a different cause (unit cost). Without the feed budget information, the producer will only know that feed is above budget, but not know why. Dr. Dial will be discussing this concept in much more detail in his presentation.

In this example (Table 1), the budget and actual data is presented. It can be seen that nursery entry weights are close to target, but the exit weights are too low. Interestingly, feed conversion is almost exactly on target, but feed cost per pig and feed cost per kg of gain is well above target. Further analysis of the data in Table 1 reveals that the cost of feeding the pig in Stage 1 is $0.43 per pig above budget, and that this is mainly the result of 25% too much Stage 1 nursery diet being used. This is a common outcome of such analysis in the nursery, as people mistakenly think that feeding excessive amounts of the stage 1 nursery will result in better performance. Stage 2 starter appears to be on track, but an excessive amount of Stage 3 starter is being used; this is occurring even though nursery exit weights are below target! It can therefore be seen that this type of information allows us to evaluate our performance in the context of feed usage and determine where action might be taken to achieve improvement. Certainly, a feed cost per pig that is $1.89 above budget, and nursery exit weights that are 1.4 kg below budget is a serious cause for concern!

It is our experience that savings in feed costs measured in dollars per pig, not cents per pig, can arise from this type of analysis. In one specific example, almost $5 per pig was realized by reviewing the feed budget (wean to finish) and making appropriate corrections.

Table 1. Typical feed budget usage and costing report

Energy concentration in the diet

Energy is the most expensive nutrient in the diet. However, we are generally much more confident in establishing mineral, vitamin or even amino acid levels in our diets than we are selecting appropriate energy levels. The reason for this is that relatively little research has been conducted on the pig’s response to dietary energy. Furthermore, certain “truisms” which we believed and thus used to drive our selection of dietary energy levels are being proven untrue, or at least uncertain!

It is widely assumed that higher energy diets will increase the growth rate of pigs, and thus improve barn turnover. Given the value of barn throughput, it was generally concluded that the higher cost associated with higher energy diets would be more than compensated by higher rates of gain. The data in Table 2 illustrates that this assumption may not be true. Increasing the energy concentration of the diet had much less impact on the growth rates of the pigs than expected; pigs fed the higher energy diet reached market weight only 3 days faster than those on the lowest energy diet. The expected improvement in feed efficiency was observed, but the pigs consumed less of the higher energy diets, such that changes in growth rate were small. With respect to carcass quality, there was no benefit from feeding the higher energy diet; indeed, as dietary energy concentration increased, backfat also increased. The biggest impact of dietary energy occurred in feed cost per pig, which increased by $11.76 per pig, or 31%.

We do not believe that the results of this experiment are definitive, nor do we believe that pork producers should automatically switch to lower energy diets. However, on the basis of this experiment, and previous studies undertaken with the weanling pig, we now believe that the subject of dietary energy concentration requires a great deal more consideration and review. We also believe that individual pork producers should consider conducting evaluations of dietary energy content on their own farm, to obtain information that is specific to their operation. There are far too many dollars sitting on the table to ignore this subject.

Table 2. Impact of dietary energy concentration on pig performance from 30 to 115 kg and on carcass quality

Growth rate

A multitude of factors affect growth rate in the pig. Nonetheless, attention to them can pay significant dividends in terms of increased profits. Last Fall, we undertook an analysis of the value of increasing growth rate by 150 g/d; using the most conservative approach possible, it was estimated that it was still worth $5.56 per pig sold. On many farms, especially where floor space in growout is limiting, growth rate could be worth much more.

Common approaches to increasing growth rate include addressing animal health problems, ensuring barn temperatures are not too high, providing adequate floor space, ensuring continuous access to water and feed, reviewing the genetics program, minimizing the amount of mixing which occurs from weaning to market and reviewing the adequacy of the feeding program.

Nutrient requirements

Pig diets are formulated on the basis of more than 3-dozen essential ingredients. Many, such as microminerals (eg. iron, manganese, zinc, copper) and vitamins (eg. Vitamin A, Vitamin E, riboflavin, niacin) are supplied in fixed amounts by the premix and receive review perhaps on an annual basis. Some macrominerals (eg. magnesium, potassium) do not require specific supplementation, because they are present in sufficient quantities in common ingredients, so deficiencies are extremely rare. However, 4 macro-minerals, namely calcium, phosphorus, sodium and chloride, must be specifically supplemented in most practical diets. There are, of course, some exceptions to the above. For example, zinc and copper might be specifically supplemented in the diet of young pigs.

Energy is the most costly nutrient in the diet and has been discussed previously.

Although they do not receive much attention, there are certain fatty acids, known as “essential fatty acids” that receive at least some degree of consideration in practical diets. It is generally believed that common ingredients used in western Canada supply more than enough essential fatty acids, such that specific supplementation is not required. However, given that there is almost no data on the essential fatty acid requirement of breeding animals, I am not totally comfortable with this conclusion.

There are 20 amino acids that occur in most proteins and of these, 10 must be supplied in the diet. It is generally assumed that if the 4 or 5 most limiting amino acids are present in adequate concentrations in the diet, the others will be above requirement. For this reason, most least-cost feed formulation programs in Canada include only 4 or 5 amino acids in their matrix.

Based on the above, diets are typically formulated on the basis of dietary energy concentration, amino acids and certain macro-minerals. We would strongly encourage all producers to review, or have reviewed, the specifications used for their diets. It is not difficult to envisage circumstances where nutrient specifications should change over time, as the expected level of performance changes, as the appetite of pigs changes and as genetic capacity changes. One obvious example of the need to revisit nutrient specifications is when seasons change, as hot weather diets are typically quite different from cold weather diets.

Most critically, nutrient specifications probably should change as economic conditions change; it is very difficult to contemplate a single feeding program that is financially optimal when a) pigs prices are high and feed costs are low and b) pig prices are low and feed costs are high. Even simple changes in a feeding program might alter feed costs by $1 per pig or more.

Ingredient evaluation

There have been tremendous gains in the technology used to evaluate the nutritional value of individual samples of ingredients. Long ago, bushel weight was shown to be a very poor indicator of feeding value. Relatively simple chemical analyses were found to provide much more accurate information, at least for some ingredients. Careful selection of ingredients, combined with effective evaluation, has been shown to result in more efficient and often more effective pig performance.

As an example, last year, Dr. Ruurd Zijlstra reported that there was very little difference among various classes of wheat, in terms of pig performance. Many people had previously thought that certain wheats, such as hard red spring, were superior as pig feed as compared to CPS and durum. This was found to be untrue, allowing pork producers to widen their selection of acceptable ingredients. Broader selection of ingredients is almost always associated with lower costs, as flexibility is enhanced.

Frequent Least Cost Feed Formulation

Feed is at least 60% of the cost of production (COP) and the best opportunity to realize savings lies in our ability to target nutrients to the stage of growth. Defining the pigs nutrient requirements by body weight, and developing a series of diets or phase feeding is well developed on most farms. Split-sex feeding is less frequently practiced due to the practical challenge of delivering different diets. The savings are worth the effort. Barrows grow 8-10% faster than gilts. Gilts require diets 7-10% higher amino acid levels over barrows. Previous research at PSC shows that split sex and phase feeding combined increases net income by about $4.50 per pig.

Much of the benefit of phase feeding will be lost however if diets are not regularly reformulated to reflect current ingredient markets. The main driver to determining the frequency of diet reformulation is ingredient prices. When prices are rising and falling diets need to be changed more often. In volatile markets that could mean weekly, but for most producers this exercise is done each month, or whenever a major ingredient changes in price or availability.

An example of the effect of diet reformulation on cost of production is seen in Table3 comparing a diet formulated on April markets but still in use in December. Those same specifications when reformulated using December prices produced a much different cost per tonne and reduced the cost per pig by $2.33 without changing performance.

These example diets reflect only one farm’s pricing scenario and are greatly affected by local availability and any forward contracting of ingredients. Major changes in ingredient prices that have affected most producers include the increase of approx. $100/tonne in soy prices in December, resulting in this farm’s diets using more canola meal in grower and finisher diets. Experience suggests that regular reformulation of diets can reduce feed costs by $2-$4/pig sold.

Table 3. Cost Comparison April vs. December, 2003

^*Unshrunk ingredient cost only

Hitting the Core

Current marketing grids dictate that ‘eyeballing’ market weight isn’t going to generate the maximum revenues. But what methods are available to balance the workload and cost of weighing, versus getting a large number of pigs into the core? In large groups with automatic sorting technology, narrow weight ranges in bodyweight can be achieved with little labour input. In conventional housing using groups of under 50 pigs, weighing of individual pigs is the only way to achieve the narrow ranges required to achieve top prices. Accomplishing this usually takes considerable labour. One method helps to reduce this labour cost by half while achieving the objective of accurate market weights.

The process starts with knowing growth rates. This can best be accomplished by developing individual farm growth curves; software available requires you measure growth over a two-week period, at three points during the grow-finish phase.

Knowing growth rates near market allows you to use a simple system of weighing near-market weight pigs every second week. Most packers have a core of between 85 and 100 kilograms, that's 15 kilograms dressed weight, or about 20 kilograms live weight. Given typical growth rates near market there is approximately three weeks worth of growth when that pig will be within the correct shipping weight window. Even though the grids are narrower than they have ever been, they are still quite wide relative to our knowledge of growth and our ability to correctly identify market weight animals.

A simple method developed at the Centre involves weighing all pigs at the first shipping day. All pigs in the correct weight are shipped that day, but by knowing the typical ADG, you can project forward one week and mark those pigs with a distinct colour that will be ready next week, and different from the colour markings on the pigs to be shipped this week. There are herds that have improved their ability to market only 70% in the core and increase this to 90%+ using this method. The result is those pigs which were significantly outside the core now increase in value by perhaps $12.00 or more resulting in all pigs from the pen being on average worth approximately $3.50 per hog more after considering feed costs required to grow the lighter pigs to an acceptable market weight (analysis assumes $1.10/kg market prices and $160/tonne finisher feed prices).

Feeder Management

Feeder management in the year 2004 is significantly different than feeder management in 1984. Conventional wisdom, and feeder design have evolved, and where the recommendation was once to tighten the feeder adjustment to limit waste, when estimates of wastage ranged from 10-20%, we now want to ensure pigs have ready access to feed so that growth rate is not impaired. This change in feeder performance was highlighted in a series of tests designed by Harold Gonyou on various feeder designs. The conclusion was that modern grower-finisher feeder wastage is in the range of 3-5% of total feed disappearance.

Detecting feed wastage visually means that if you can see any feed around the feeder you are likely losing in excess of 5%. If this is the case then adjusting the feeder will pay big dividends, for example if you can save 5% of the feed that is worth $2.00 per pig. What if you do not see obvious waste around the feeder? The feeder may still need adjusting, and it may be to provide easier access to feed. Limiting feed equates to limiting growth. Reducing feed intake by 1% reduces growth rate 1-2%, the result can have significant financial implications for the herd.

Compare this however to the result of having feeders empty during the feeding period. Take this test the next time you are the first person in the barn. How many feeders are empty? Ask yourself how long they may have been empty. Several barn operators have taken this test and typically report 10% of the feeders are not delivering feeder, typically due to poor adjustment, plugged feed lines or empty bins.

The effect of this on growth is variable but assuming even half of these feeders were not working for 24 hours, could mean a reduction of 10% in ADG. Using a market hog gaining 85 kg in the grower-finisher barn during this period, and no compensatory gain, we could be adding up to 12 days to their stay. Those additional days all incurring feed and overhead or barn charges. The net value of this could be as much as $3.00 in feed and $3.00 in additional barn days.

Water

Pigs require, by weight, approximately 2.5 times more water than feed each day. Temperature has an impact on water consumption as a 1oC rise above 20oC results in a sow drinking 0.2L more water per day. Typical consumption by various classes of swine is: 475 ml/da for weanlings, 650-700 ml/day for grower-finisher pigs, and 1 litre per day for sows.

Previous tests have confirmed that up to 40% of this water when delivered through a water nipple is wasted. The amount is significant since the typical usage of 595 L per grow-finish production cycle means 396 Litres is wasted. Getting that water to the pig can be done through nipples, bowls or in the feeder. The choice of delivery method and how it is maintained can have a significant impact on water usage and the cost of delivering water and hauling away spilled water as slurry. The most common delivery device is the water nipple. Adjusting the height of the nipple to meet the needs of the pig has been shown to reduce water wastage from 10-20%. Nipples need to be adjusted to 2.5 cm above the pig’s back. Water wastage also increased about 7% when flow rates were increased above the levels described above.

Energy costs are incurred to bring water to the pig and then to move slurry to the field. Water delivery and movement of slurry within the barn and from transfer station is relatively inexpensive at $0.02-0.03/pig. However, assuming all the wasted water is eventually moved as slurry, this could be costing $0.60 per pig marketed using current commercial field delivery and injection rates. (PSC Annual Research Report 2000, page 32; PSC Annual Research Report 2001, page 22).

Wet/dry feeders address the water wastage concern by incorporating a nipple drinker in the feed bowl as the only source of water, reducing water use by 30%, and slurry volume by 20-40%.

Ventilation

The ventilation of a hog barn has three areas for savings: temperature and its effect on growth and energy costs, controller and sensor accuracy affecting energy usage, and fan/shutter/inlet maintenance affecting energy usage.

Do not keep the pigs too warm. Elevated barn temperatures reduce feed intake and thus growth rate, and this can occur in the winter as well as the summer months. For every 1oC increase above the pig’s thermoneutral zone, feed intake drops 1-2%, and growth rate drops about 3%. In the winter this cost is compounded with increased energy costs to heat the barn. The benefit to reducing temperatures will be a minimum of $0.50/pig for growth and $1.00+ per pig depending on energy costs. We ran three scenarios on our modeled grower-finisher barn: scenario 1, reducing temperature from 21oC at barn entry to 15oC at market using the recommendations offered in the Swine Building Ventilation Guide; scenario 2, 21oC from entry to 50 kg body weight and stepped down to achieve 18oC at 75 kg; the third scenario was 21oC from entry to market. The energy costs to maintain these temperature regimes are respectively; $120/yr, $187/yr, and $288/yr for our model barn or $0.21/pig, $0.33/pig and $0.51/pig. A doubling of energy costs would result from not taking advantage of the pigs desire to live in a cooler temperature as it ages.

Controllers and sensors need calibrating and monitoring to ensure they are operating properly. Based on typical January conditions in the Saskatoon area, we have modeled the impact of having an improper setting allowing a minimum ventilation rate above that required for moisture removal. For the typical 200 head finisher barn and a natural gas price of $0.031/kWh, the increased cost of a ventilation rate 10% over requirement is approximately $1.88 per day, or $0.01 per pig per day. Depending on the days to market this could mean additional costs of $0.90 to $1.00 per pig. Calibration of sensors should be carried out twice a year. Guidelines for winter ventilation rates are provided in Swine Building Ventilation, pg 42.

Fan blades and shutters should always be cleaned when the room is washed. This has more than visual appeal, clean equipment runs more efficiently. Returning to our 200 head barn model cited previously, energy costs of $9.90 for each grower-finisher turn are typical for a 12” fan running continuously to maintain a minimum ventilation rate. Dirty fan blades and shutters airflow can be restricted 30%, and energy costs will rise 42%. Note that as additional ventilation is required, larger fans and multiple numbers of fans will be running and these costs can increase several fold.

As spring and summer temperatures rise, watch your ventilation systems ability to adjust. Indoor temperature should be within 30C of outside temperature. If the differential is greater than this the ventilation system is likely operating below an acceptable standard. Temperature recommendations are included in Pork Production Reference Guide 2000, pgs 42-46, or Swine Building Ventilation, pgs 64 & 65.

Conclusions