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Maximizing Performance, Reducing Production Costs

By Marcia S. Carlson and Thomas J Fangman, University of Missouri - As prices of corn and soybeans have increased and market hog prices continue to drop, swine producers are forced to find additional ways to reduce total production costs. The first place to focus is on growth performance (average daily gain, and feed efficiency) and the management factors that impact performance. If growth performance is poor then less profit or more losses will occur during these times of low market prices.

This article will try to provide some helpful tips to ensure that maximum performance can be achieved in order to minimize profit losses during these times of small profit margins.


Maximizing Performance, Reducing Production Costs - By Marcia S. Carlson and Thomas J Fangman, University of Missouri - As prices of corn and soybeans have increased and market hog prices continue to drop, swine producers are forced to find additional ways to reduce total production costs. The first place to focus is on growth performance (average daily gain, and feed efficiency) and the management factors that impact performance. If growth performance is poor then less profit or more losses will occur during these times of low market prices. <br><br> This article will try to provide some helpful tips to ensure that maximum performance can be achieved in order to minimize profit losses during these times of small profit margins.

First, one must look at feed quality. All pork producers have participated in the Pork Quality Assurance program sponsored by the National Pork Board; however, a feed quality assurance program should be implemented as well. Feed quality issues that need to be monitored include grinding or particle size, diet formulations, feeder adjustment, and storage.

Feed costs can be as much as 70% of the total production costs and when market prices are low, profitability depends on minimizing feed costs. Anything that improves feed efficiency will be more economical in times of high feed costs.

Producers should monitor particle size and keep the average size at 700 to 800 microns with less than 5 % variability. Many times, if particle size is not determined frequently, it will creep up to 1,000 microns as the grinder screens wear. This may increase feed cost for a producer by $.50 to $1.00 per pig due to poorer feed efficiency.

Producers may want to evaluate dietary formulations and make sure that they are not overfeeding any nutrients unnecessarily. Lysine is often overfed during the late finisher period (after 230 lbs). If a producer lowers the lysine concentration by a tenth of a percent, feed costs can be reduced by approximately $3.00/ton. However, do not reduce nutrients inclusion rates so far the performance is impacted.

Heat stress, disease and crowding do not increase the pig's lysine requirement; in fact, those stressors that decrease feed intake decrease lysine requirement as well as performance. Therefore, environmental stressors should be minimized as much as possible.

With increasing feed costs, producers might want to think about feeding to lighter weights, which will increase feed efficiency. Today's average market weight exceeds 260 lbs and continues to increase.

The main reason for the increase market weights could be packers emphasizing the importance of larger pigs as more pounds of pork per given shackle space, producers maximizing pounds of pork produced per square foot and cheap feed costs. Figure 1 demonstrated that additional revenue is generated from the net gain of pigs grown an additional 50 pounds with $40.00/cwt and a 3.8 feed efficiency even when feed costs approach $130.00/ton.

Figure 1. Advantage of feeding a hog from 230-280 lbs
if feed efficiency is 3.8 and value is $40.00/cwt
  Cost/ton of feed
  $ 80 $ 90 $ 100 $ 110 $ 120 $ 130
Added feed cost, $ 7.60 8.55 9.50 10.45 11.40 12.35
Net Gain/Head, $ 12.40 11.45 10.50 9.55 8.60 7.65


A more realistic scenario for today's market is shown in Figure 2 when market price received begins to drop below the cost of production at a time when feed prices begin to rise.

Figure 2. Advantage of feeding a hog from 230-280 lbs if feed efficiency is 3.8 and value is $25.00/cwt
  Cost/ton of feed
  $ 80 $ 90 $ 100 $ 110 $ 120 $ 130
Added feed cost, $ 7.60 8.55 9.50 10.45 11.40 12.35
Net Gain/Head, $ 4.90 3.95 3.00 2.05 1.10 0.15


In this example, when pigs are $25.00/cwt, as feed costs approach $110 per ton the net gain of feeding to 280 lbs is only $2.05, but if feed costs approach $130/ton the additional revenue of marketing at 280 lbs is lost. Therefore, producers may want to evaluate if pigs should be marketed at a lighter weight with high feed costs and low markets prices, which would allow for more time between groups and potentially more time for clean up or repairs before the next group of pigs.

Old versus new corn can often be a contributor to poor performance. Mycotoxins need to be tested in both old and new corn. Mycotoxins, such as aflatoxin, will reduce growth performance if concentrations are above 200 ppb and zeolite or clays might want to be used. In addition, if you have been feeding a 13 % moisture corn and suddenly begin using a 15% corn, feed intake and ultimately feed efficiency will be affected as it will take more corn to get the same dry matter nutrient intake, which results in about 1 lb extra feed intake per pig per week.

In conclusion, it is probably a good time to fine tune feed management practices on the farm, such as the grain quality, grinding efficiency, diet formulations, and feeder adjustments. A slight alteration in feed quality and formulations can dramatically impact growth performance resulting in $.50 to $3.00 drop in feed costs per pig. Additionally, producers might also want to consider a price signal on feed cost and market price as to when they need to start selling hogs at lighter weights.

Helpful Hints to Minimize Feed Costs:

  • Monitor grain quality (particle size, mycotoxins, etc.)
  • Adjust feeders properly.
  • Make adjustments with old versus new grain.
  • Evaluate market weights based on feed costs.

Written by:

Marcia S. Carlson, PhD
State Swine Nutrition Specialist
University of Missouri
S133 Animal Sciences Center
Columbia, MO 65211
(573) 882-7859
carlsonm@missouri.edu
Thomas J Fangman, DVM, MS, Dipl-SHM Extension Swine Veterinarian
University of Missouri
A331 Clydesdale Hall
Columbia, MO 65211
(573) 882-7848
fangmant@missouri.edu



Source: AgEBB, Swine Production News, September 2002


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