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PSC Recommends Low Cost Strategies for Reducing Costs

by 5m Editor
25 February 2008, at 9:50am

CANADA - The Prairie Swine Centre in Saskatoon is encouraging hog producers to consider best management strategies that can be implemented at no cost to help reduce expenses in the barn.

Focus on the Future Conference Replaced with Local Producer Meetings

In light of the difficult economic situation facing pork producers the Prairie Swine Centre has replaced this year’s Focus on the Future Conference with a series of six smaller, more personal meetings. The first two meetings were held this week in Portage La Prairie and Niverville, Manitoba and meetings are planned for early April in Swift Current and Saskatoon, Saskatchewan and Lethbridge and Red Deer, Alberta.

Many Challenges Beyond Producer Control

Many of the challenges, including low hog prices, the strength of the Canadian dollar against U.S. currency and a doubling of grain prices, are beyond the control of producers and have left them feeling somewhat overwhelmed.

Lee Whittington, Manager of Information Services says, “These meetings are an opportunity where pork producers can focus on the things they have control of. That is the things they can do in the barn to improve productivity and reduce the cost of production.”

The three big cost areas on any livestock operation are feed, utilities and labour.

Feed Offers Largest Opportunity for Cost Reduction

Depending on the operation, feed typically represents between 50 and 75 percent of the total cost of production. The energy component of the diet alone represents about 25 percent of the total cost of pork production in Canada.

Prairie Swine Centre President and CEO Dr. John Patience says the first step when designing a feeding program is to define its objectives whether that is maximizing the return on feed per pig sold, maximizing the return on feed per pig placed or just minimizing losses.

Design Diets Around Energy Component

Once the objectives have been set, Dr. Patience suggests the highest priority should be selecting the correct energy level.

“Historically, producers have tended to focus much of their attention on the amino acid content of the diet, the protein, because that’s what drives lean gain and produces a lean carcass which is what the consumer wants. Also producers have focused on things like vitamins and minerals because those contribute to the health of the pig.”

He notes, “Our analysis has shown, that depending on your success in selecting that right energy level for your feeding program, you could increase your net by anywhere from $1.00 to $13.00 per pig.”

Given the current cost of energy compared to six months ago, he estimates, there’s probably $1.00 to $3.00 per pig available just by fine tuning the energy level.

Feed According to Stage of Growth

Another strategy is the use of phase feeding, where the nutrient content of the diet is matched to the growth stage of the pig.

Dr. Patience explains, “The younger pig requires a higher concentration of energy in the diet because they have a smaller stomach. They can’t eat as much per day whereas the older finishing pig has a tremendous capacity to consume energy and ingredients. Therefore we can feed a lower energy, lower cost diet to the older pigs.”

Ingredient Selection Offers Cost Saving Opportunities

The selection of ingredients is also important.

Dr. Patience notes diets on the prairies have traditionally been built on wheat and barley and more recently corn, soybean meal and canola meal. However there are a host of other ingredients like hulless barley, oat groats, field peas, lentils, flax and flax meal or byproducts of crops, that can be used in pig diets. It all is going to be determined by relative economics.

Research scientist in nutrition Dr. Pascal Leterme points out we’ve seen a huge increase in the cost of wheat and soybean meal. There’s a huge increase in demand for wheat due to the use of wheat in ethanol and an increase in U.S. corn production at the expense of soybean production which has pushed up the cost of soybean meal.

Cheaper Alternatives Offer Saving Opportunities

Dr. Leterme suggests producers consider cheaper alternatives including triticale, hulless barley, field peas, culled lentils, faba beans and other feed ingredients.

He recommends looking first at the composition of the ingredient, particularly its energy level, secondly whether the pig will eat the ration and then be sure the ingredients being used won’t negatively impact carcass quality. Beyond that, availability and consistency of supply and ability to store and process the ingredients should be considered.

Feed Budgets Help Control Feed Costs

Establishing a feed budget will help reduce waste and help keep feed costs in line.

Whittington says, “By doing an analysis or audit every month, two months, three months, we find that, in many cases, the amount of feed going into an animal is not the same for a lot of reasons. Perhaps there aren’t as many pigs in that room as what was originally budgeted and yet the truck driver is still delivering the same number of tonnes of starter to that room. The result is we typically find anywhere from $3.00 to $6,00 per pig in savings by getting back to our original budget.”

Finishing Weight Affects Returns

While optimum weights will vary from farm to farm based on factors such as genetics and management, properly targeting finishing weights will improve profitability.

Dr. Patience explains, “When you go from a situation of a couple of years ago where market prices were relatively high and feed costs were very low, that would dictate that we probably feed our pigs to a higher weight. Right now where market prices are very low and feed costs are very high, putting that extra weight on a pig is going to be very expensive. That would probably suggest that we should be aiming for a much lighter pig. In the case of our own operation, approximately a year ago, we were aiming for about a 97 kilogram carcass. Last fall we dropped that down to a 94 kilogram carcass. At the first of the year we dropped it even further to about a 92 kilogram carcass because the relationship between feed cost and market price has changed.”

Wasting Utilities Adds to Operating Costs

Utilities are another area where producers can take steps to reduce costs.

The cost of energy is the third largest variable cost in swine production accounting for five to eight percent of production costs depending on the type of operation.

In a swine barn the main areas of energy consumption are heating systems, the operation of the ventilation fans, lighting and then other equipment like motors for moving manure and feed handling, says research scientist in engineering Dr. Bernardo Predicala.

Heating is the biggest cost component during winter and in the summer months it’s the operation of ventilation fans.

Dr. Predicala suggests that, because heating is such a large component of energy use, maintaining the optimum set points for the ventilation system is crucial.

“By not following the recommended set points you’re liable to waste a lot of energy both for the heaters and running your fans.”

He also recommends proper calibration and maintenance of the systems that control conditions within the barn, including sensors, fans, shutters and controls.

“This doesn’t cost at all but it will result in lots of saving in energy.”

Additional Information Available through Prairie Swine Centre Web Site

Whittington notes, “As a pork producer ourselves, we have about 1,000 sows at the Prairie Swine Centre so we know exactly what individual pork producers are going through right now in terms of their losses and some of the opportunities there are to try and minimize those losses.”

He concedes, “Although it is not possible to find economies in any barn to offset current losses, there are several dollars per hog typically found on most farms.”

Additional information on “Pork Producer Survival Strategies” that can be used to reduce costs and maximize profitability can be accessed through the Prairie Swine Centre web site at www.prairieswine.ca.

5m Editor