Production

Opportunity Revenue and the Cost of Intervention

Causes of variation in pig production are many and not well understood. One of the key issues arises from the spread in pig weights which begins through a kind of competitive process among the pigs beginning well before birth. Competition in the uterus and during lactation results in a sometimes widely spread distribution of potential in pigs by the time they reach weaning. Some common management procedures are implemented beginning at birth to attempt to reduce variation but their outcome is often marginal, while others, such as processing and castration introduce new challenges to subsets of pigs. Pigs of different weights require different environmental temperatures, feed types and other conditions, yet as variation increases, "average" conditions are provided which probably miss the ideal environment for all but a very small number of pigs.

Some producers are experimenting with simply euthanizing the smallest pigs either at weaning or prior to weaning. An arbitrary percentage is chosen, such as the smallest 3-5% as candidates for euthanizing. Recently published trials (Wolff, Lehe, Keffaber and Deen, "A Producer's Tool for Measuring Attrition", IPVS, 2006) suggest that the weight of the pig, relative to its cohort at both weaning and the end of nursery phase are sentinel indicators of eventual final quality with the weight at the end of the nursery phase a stronger predictor. The result was obtained with all other things held constant so it isn’t clear if targeted or more intensive individual interventions aimed at the smallest pigs at weaning and feeder pig stages would affect the outcome.

Its Not as Simple as Leveling the Playing Field

Reduction in variation of growing pigs can have significant impacts on both cost of production and on return from the packer. This double impact on both cost and return makes this an especially lucrative subject for both study and the development of strategy leading to standard operating procedure (SOP) creation or amendments. Simply reducing variation is not the goal however since there is no guarantee that this will produce either cost reduction or income increase.

Too Much of a Good Thing...Is Rarely a Good Thing (with apologies to Martha Stewart)

Variation is a natural part of biological systems and a characteristic that cannot be eliminated. However, the wise producer will institute procedures from the boar stud to the final loading of the finished animals which at a minimum, does not increase the natural variation in growth. Variation costs money, lots of it. Since we adopted systems which produce weekly lots of pigs, the pigs flow through the farm in age-segregated groups, often moving two or three times to different locations. When their growth performance begins to spread, the time and the cost associated with their completion and marketing begins to rise.

Two Peas in a Pod---They Ain't"

So we are talking about not adding to the fundamental problems which biological production systems deal out just because of their nature. Some of those problems include seasonality, the complexity of growth mechanisms as a key variance enhancer (compared to non-biological production—like automobile manufacture etc.) and the fixed periods of production which cannot be speeded up with an extra shift (like gestation). I’m contending that the next major movement forward in competitiveness is the producer’s ability to manage (certainly never eliminate!) variation more effectively. There is lots of money on that table.

"Don't Let Your Assets...,Well, Sit on Their Assets"

Agricultural production is kind of a strange bird compared to other business processes. In economic terms, one of the real challenges is something called “asset turnover”. Asset turnover is the time it takes to generate the value of all assets used in the production process through sales of finished products. Asset turnover is a key determinate of Return on Equity along with net income and level of leverage employed (see the Dupont Equation if you are a budding MBA).

If you think about it, crop producers purchase a $400,000 combine which they operate a few weeks a year and then it is a high-priced bird perch for the next 10 or so months. This is the killer of asset turnover in most biological production processes since many of them are not continuous.

WPX2007: Dr. Tom Gillespie discusses PRRS management and its impact on porcine PCVAD.

Dr. Tom Gillespie, veterinarian with Rensselaer Swine Services in Rensselaer, Ind., and past president of the American Association of Swine Veterinarians, discusses porcine respiratory and reproductive syndrome (PRRS) management and its impact on porcine circovirus associated disease (PCVAD).

WPX2007: Dr. Dennis DiPietre outlook on production costs and prioritization of various input costs for profit maintenance.

Dr. Dennis DiPietre, economist, provides an outlook on production costs and how producers can prioritize various input costs in order to maintain profit levels.


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WPX2007: Dr. Tom Painter on impact of ileitis to herd health / production profitability

Dr. Tom Painter, professional services veterinarian with BIVI addresses the impact of ileitis on herd health and production profitability.



SwineCast 0204 for May 29 2007

SwineCast 0204 Show Notes:

  • FDA finds melamine in U.S. feed pelleting process
  • Maple Leaf plant closings update
  • Rabo Bank's Fiona Boal looks at current Canadian production
  • Genetic markers on the mind of Dr. Jerry Taylor
  • A look at the National Animal Germplasm Repository

SwineCast 0195 for April 27 2007

SwineCast 0195 Show Notes:

  • Update on swine feed contamination and damage containment. Link to teleconference transcription.
  • Canada's work on developing traceability system.
  • Ivy Natural Solutions working to provide product to natural production systems.
  • Chromium affect on sow productivity
  • Managing your corporate communications (not what you think)
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