专题文章
Farrow-to-Weaned Pig Cost-Return Budget
By Mike D. Tokach, Swine Nutrition Specialist and Kevin C. Dhuyvetter, Agricultural Economist, Kansas State University. - This article looks at a typical budget for the breeding-gestation-farrowing phase of a 3 site production process.
Production Practices
The practice of dividing traditional farrow-to-finish hog
production into three distinct phases has become a common
practice in the swine industry. The age separation practice,
known as segregated early weaning (SEW), produces
healthier, more efficient pigs and helps to maximize the
genetic potential of today???s breeding stock. The ability to
take advantage of this technology may help Kansas hog
producers remain competitive in the industry.
The most popular modern production system is a three
site all-in, all-out system consisting of a breeding-gestation-
farrowing site, a nursery site, and a grower-finishing
site. This budget is designed to serve as an economic guide
to the breeding-gestation-farrowing phase of the production
process.
Production Level
Costs per unit and net returns in livestock production are
highly dependent on production levels. The following estimated
budget includes three different production levels.
Production levels vary for a number of reasons such as
livestock quality/genetics, weather, input levels, and management.
Budgeting at multiple production levels can help
producers examine the financial risk of a livestock enterprise
that is directly related to production risk.
Production levels for farrowing operations are assumed
to vary due to differences in the number of pigs sold per litter
and the number of litters per sow per year. Varying these two
factors results in a different numbers of pigs sold per sow per
year.
Capital Investment
The capital invested in farrowing facilities varies greatly,
and is dependent upon the size and type of facilities constructed.
The success of the SEW concept is dependent upon
high quality facilities that require large capital investments.
The investment shown in Table 1 was used for the cost return
projections. Producers should use their own figures and
recalculate the fixed cost before construction.
A central farrowing house with liquid manure facilities
and slotted floors is estimated at $2,000 per sow (66 sq. ft.
per sow), with the equipment inside the building costing an
additional $1,000 per sow. The gestation building is estimated
to cost $450 per sow (20 sq. ft. per sow), and the
equipment inside the building is estimated to cost an additional
$200 per sow. Office facilities, site preparation, and
miscellaneous items are also included in the capital requirements.
The capital requirements are assumed to be the same
for all production levels, so fixed costs per pig are significantly
lower for higher production levels.
Returns
Returns to the farrowing stage accrue from the sale or
transfer of weaned pigs. The price of the weaned pig used in
this budget was arrived at by simultaneously calculating a
weaned pig price and a feeder pig price such that the return
on investment for the three phases of production (farrow-towean,
nursery, and finish) were exactly equal given the
assumed costs in each budget and the market hog price in the
finishing budget.
Producers also receive income from the sale of culled
breeding stock. In this budget the income from the sale of
culls is accounted for by including an assumed salvage value
in the depreciation component of the breeding/genetic charge.
Therefore, income from culls is entered as a reduction in
costs rather than as an increase in returns so that the returns
are representative of the true objective of the enterprise
(producing weaned pigs).
Feed Costs
Feed costs were calculated using grain sorghum - soybean
meal based diets. The Kansas Swine Nutrition Guide served
as the basis for calculating feed requirements for each production
level. Feed costs vary considerably across production
levels. The breakeven price needed to cover all costs (Line 19)
is particularly sensitive to changes in grain sorghum and
soybean meal prices. The expected breakeven prices for a
range of grain and soybean meal prices for each of the three
production levels are presented in Tables 2, 3, and 4.
Information Included in Farrow??“to??“Wean Budget:
Productivity level
Pigs weaned/sow/year
16.00
19.00
22.00
Weaned pigs sold/litter
8.00
8.94
9.78
Litters/sow/year
2.00
2.13
2.25
Pounds fed per pig
sorghum @ $3.90 per hundredweight 101.0
85.5
74.3
soybean meal @ $178 per ton 26.1
22.4
19.7
vitamins, minerals @ $388 per ton 6.7
5.7
4.9
@ $509 per ton 0.0
0.0
0.0
I. ASSET TURNOVER: (gross returns per pig divided
by investment) Asset turnover is the percent of
investment recovered by total returns. Inverting this
measure allows different enterprises to be compared on
the basis of capital required to generate a dollar of gross
income.
a. Depreciation - difference between purchase price
and cull value divided by years of useful life. Based on
gilt purchase price of $207/head and cull value of $111/
head, boar purchase price of $400/head and cull value
of $117/head. Useful life is estimated at 1.8 years for
sows and 2.5 years for boars. A sow/boar ratio of 120:1
is assumed.
b. Semen - based on artificial insemination charge of
$18/litter.
c. Interest - interest is charged on the average breeding
herd investment [(purchase price + cull value) ?? 2] at a
rate of 8 percent divided by the number of weaned pigs
sold per year.
d. Insurance - averages approximately 1.0 percent of
the total breeding herd investment divided by the number
of pigs sold per year.
J. NET RETURN ON INVESTMENT: [(returns over
total costs + interest on breeding herd + interest on
variable costs + interest on fixed costs) ?? investment]
Net return on investment is the percentage return on
investment capital (both borrowed and equity). This
measure enables comparisons to be made between
enterprises as well as other investment alternatives.
*Annual feed fed to sow and boar divided by weaned pigs
sold per year.
Links to all the articles in the series
Farrow-to-Weaned Pig Cost-Return Budget
Feeder Pig Nursery Cost-Return Budget
Swine Finishing Barn Cost-Return Budget
Source: Kansas State University Agricultural Experiment Station and Cooperative Extension Service - October 2001
