Converting a Setback into an Opportunity29 November 2012
While for some producers the sow stalls ban is a set-back, it may be a beneficial reality check for others, turning a setback into an opportunity, according to Michael McKeon of Moorepark. He was speaking at the Pig Farmers' Conference organised by Teagasc in the Republic of Ireland in October 2012.
"When one door closes another opens. But we often look so long and regretfully
upon the closed door that we fail to see the open one" - Alexander Graham Bell.
The Irish pig industry is in the process of converting to loose sow housing which must be completed by January 2013. Unfortunately, due to the high price of feed and banking crisis some units are unable to obtain funding from banks to undertake the new dry-sow housing necessary to maintain their herd size. While for some producers this is definitely a setback, for others it may be a beneficial reality check which could turn a setback into an opportunity.
The Irish pig herd has seen a substantial increase in sow prolificacy over the last six years. The table below reveals that an average increase of 1.9 pigs produced per sow over this period.
|Born alive per litter||11.35||11.53||11.88||11.78||12.01||12.33|
|Pigs per sow per year||22.2||22.5||23.4||23.3||23.9||24.1|
|Pig produced per year per 500-sow unit||11,100||11,250||11,700||11,650||11,950||12,050|
For a 500-sow unit, this has produced an extra 950 pigs annually, which equates
to an extra four weeks of sales. While this is a very positive development, it has
created its own problems on some unit due to a lack of sufficient housing to
accommodate these extra pigs. Because of the poor profitability in the pig
industry over the last few years, units may not have invested in sufficient
additional housing. If this was not undertaken, then the only other option is to
reduce the sow herd to match the housing available.
Anybody familiar with the pig industry knows cutting the sow herd size is usually the very last option on the list. Instead, many units have simply increased the stocking rate per pen, which has reduced the growth rates and sale weights on these units.
For a unit to reach its optimum performance, it needs to allow pigs to fulfil their growth potential and ideally to reach a sale weight above 100kg. If a pig unit is overstocked, it will have deteriorating growth rates and feed conversions with consequential reduction in sale weight. The reduced growth rates further decreases the available space available and the downward spiral continues.
For these units, the unavailability of capital for investment may be an opportunity
to reassess their operation and take the 'bitter medicine' of cutting sow numbers.
In this case, the medicine might well make the patient healthier and wealthier in
the long run!
This paper is based on a collage of real pig unit experiences that are distilled down into a single example, which examines two scenarios: the current situation where the unit is over-stocked with a reduced sale weight and the second scenario where the unit reduces sow numbers to comply with loose sow housing legislation and to ensure that all pigs get their proper space allocation.
In the current situation, the reproductive element of the unit has improved over
the last number of years (from 22-24 pigs pe sow per year to now reach the national
Pigsys average. Unfortunately, although the unit is now producing an extra 1,000
pigs per year, the amount of weaner and finisher accommodation has not being
increased. This has gradually led to pens being stocked at sub-optimal rates
throughout the growing period with a consequential deterioration in growth rates,
feed conversions and decreased sale weight.
The unit is effectively 'running faster' but is not able to stand as it continues to lose ground with a resultant increase in the stress levels on unit staff and most importantly reducing the unit's optimum financial performance.
|Sow herd size: 500||Sale weight per pig: 93kg|
|Pigs produced per sow per year: 24||Dead weight per pig: 71.1kg|
|Total pigs produced per year: 12,000||Pig price per kg dwt: €1.84|
|Weaner ADG: 446 grams||Pigmeat produced per sow: 1706kg|
|Finisher ADG: 782 grams|
The unit needed to convert some of its dry sows to loose sow housing by January
2013 in order to comply with current welfare legislation. Unfortunately the unit's
financial institution rejected the request for additional funding required to build
the new dry sow housing and therefore the only option for the unit was to reduce
the sow herd size.
By rearranging the internal layout of the existing dry sow and gilt housing, the unit has managed to limit the sow herd size reduction to 90 sows, giving a new herd size of 410 sows. This reduction in size and the resultant reduced number of pigs produced, however, did allow more time in the weaner and finisher stages which increased the transfer and sale weights. It also allowed the pigs to be stocked at an optimum stocking rate which resulted in an increase in growth rate. The increased sale weight required three weeks of non-sales. The financial institute did finance this over a five-year repayment schedule, and is included in this calculation.
|Sow herd size: 410||Sale weight per pig:109.8kg|
|Pigs produced per sow per year: 24||Dead weight per pig: 84.2kg|
|Total pigs produced per year: 9,840||Pig price per kg dwt: €1.84|
|Weaner ADG: 482 grams||Pigmeat produced per sow: 2021kg|
|Finisher ADG: 835 grams|
|Original Herd||Reduced Herd|
|Pigmeat sold kg per week||16,418||15,933|
|Pigmeat sold kg per year||853,740||828,528|
|Total feed cost per year €||1,144,012||1,116,856|
|Feed cost per kg dwt. €||1.34||1.348|
|Total non-feed cost per year €||389,000||371,200|
|Total non-feed cost per kg dwt. €||0.456||0.448|
|Total cost per year €||1,533,012||1,488,056|
|Total cost per kg dwt. €||1.795||1.796|
|Total finisher sales per year €||1,570,882||1,524,492|
|Total income per kg dwt. €||1.84||1.84|
|Margin per year €||37,870||36,435|
The reduced herd returned a similar financial margin to the
original herd, due primarily to a higher output of pigmeat per sow. The
increased output of pigmeat from 1706kg per sow to 2021kg per sow
indicates that the unit is now operating close to full productivity efficiency. The
financial feasibility of this venture is dependent on the unit obtaining the
increased sale weight and the superior growth rates as outlined above.
Another advantage of obtaining a higher sale weight is when the pigs are being supplied to a slaughter plant with bonus weight bands. The percentage of underweight pigs not reaching the bonus bandwidths are lower in the new scenario, which increases the level of pigs in the bonus weight range thereby generating an overall higher net price received per kg. This is, however, dependent on the weight range of heavier pigs been tightly controlled.
- For some units an enforced reduction in their sow herd size may provide an opportunity to generate greater efficiency
- Increased slaughter weights may bridge the financial gap from the reduced herd size
- A higher sale weight may increase the percentage of pigs reaching a bonus weight range thereby increasing the net income.
Further ReadingYou can view other papers from the Teagasc conference by clicking here.