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Benchmarking for Ontario Swine Operations

by 5m Editor
7 October 2010, at 12:17am

CANADA - The benefits of benchmarking explained by Doug Richards, swine grower-finisher specialist at Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) in the latest 'Pork News and Views'.

"If someone was to invite you to attend a swine seminar on benchmarking I venture to say most would find an excuse not to attend. Now if the same invitation was to attend a producer's presentation about the production side of the swine operation I would expect a definite 'Yes'," writes Mr Richards.

It seems that benchmarking, that of comparing one's own financial figures of their swine operation against an industry standard or, better still, a group of like producers is just not that exciting. Most producers like to compare production but not the cost associated with that production. Production numbers are very important but it is the cost associated with the production numbers that determine the colour of ink on the operation's bottom line.

For the last 24 months the main message Mr Richards has heard and read from those involved with lending to the US swine industry is that producers have the production, now they must work on ways to reduce the cost of that production. The cost of production can only be obtained by getting the financial cost for that operation. The numbers are there, it is just taking the time to pull them together and put them down on paper. By having those financial numbers on your production costs, it will allow you to make informed decisions about your operation.

For more information on cost of production refer to the OMAFRA Factsheet Guide to Cost of Production Budgeting on the OMAFRA web site [click here].

In Ontario, producers can refer to the OMAFRA Monthly Swine Budget [click here] for a reference tool to compare their costs against a set standard.

The monthly swine budget can be used as a reference budget to compare against. While generic in its costing the budget uses a constant set of standards and prices to calculate the monthly prices. For each calendar year, there are reference notes explaining how the budget is calculated.

A new feature using the information from the OMAFRA swine budget is the OMAFRA Interactive Swine Budget, which is available to download from the OMAFRA web site [click here]. Producers choose the type of hog operation from the following: Farrow to Finish, Farrow to Wean, Farrow to Feeder, Nursery, Wean to Finish, and Grow-Finish. The interactive budget allows the producer the ability to input their costs for their type of operation. The results are presented as a financial number, as a percentage of their own budget and how it compares to the Ontario industry accepted benchmark for pork production. The programme also provides a graphical summary of the variable expenses between the producer's operation and the OMAFRA swine budget. Data summarized from the 2009 and 2010 OMAFRA Monthly Swine Budgets is provided for comparison purposes. By using this financial tool producers can compare their costs against an Ontario industry standard and provide direction and discussion in future management decisions in their operation.

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