The purchase of very young replacement females, 10-20 days of age, or in some cases at 40-60 lb., is becoming more popular. Lower initial cost and ample time for acclimation to the sow herd are listed as primary advantages to this replacement gilt philosophy.

However, very little selection for performance parameters is possible at an early age. Additionally, culling for growth at the gilt grower farm is considered too expensive and time consuming. Consequently, early weaned replacements may range from 150 lb. to 250 lb. when they reach 6 months of age. Many producers would cull the smallest gilts (group 4) at the end of the growing period even though they have a large investment in them.

The National Pork Producers Council (NPPC) National Genetic Evaluation Maternal Line Program (MLP) provides an excellent opportunity to analyze the best approach to screening early weaned replacement gilts. All gilts were delivered to wean-finish barns at 7-20 days of age. No selection for growth performance was done. Indeed, 92% of gilts were entered in the 4-parity evaluation.

A comparison of gilt lifetime performance by breeding-gestation-farrowing (BGF) unit entry weight in the MLP is summarized here. Gilts were divided into four weight classes by BGF entry group and genetic line. Gilt weight when moving from the wean-finish barn to the BGF units was used for weight classification. Table 1 shows the starting and ending weights for each weight class, by genetic line, numbered 1 through 4. Weight classes are summarized along with estrus and farrowing data in Table 2.

After arriving at the BGF units, gilts in weight classes 1, 2 and 3 were placed in gestation stalls and limit fed 5 lb./day. Class 4 gilts were grouped in pens and ad lib fed until gestation stalls were available.

All gilts were checked for estrus every day at the BGF units. Age at first observed estrus and age at farrowing are also shown in Table 2.

Statistical analysis showed that gilts weights as they entered the BGF herd (5-6 months of age) impacted their reproductive performance, regardless of genetic line. This strongly suggests that environmental inputs could be managed to change this outcome.

Slaughter checks of reproductive tracts of gilts that had not shown estrus by 300 days of age or failed to conceive after three mating periods produced the results in Table 3. A greater proportion of the lighter (class 4) gilts never had a normal reproductive cycle.

The lifetime productivity measured in the MLP (six genetic lines) presented in Table 4, shows the total number of pigs born to a female in up to four parities. Gilts that never farrowed are included at 0 pigs born.

Statistical analysis reveals that number of pigs born alive from the two smallest weight classes (3 and 4) were less than from weight classes 1 and 2. However, the performance reductions with the smaller dams are not large and may not justify culling them.

The average pigs born alive through four parities from weight class 1 and 2 females was 27.4 pigs, while weight class 3 and 4 females averaged 24.6 pigs born alive. Much of this difference occurred because of the larger number of gilts in classes 3 and 4 that had no pigs.

Herd Life Here, "herd life" is the total number of days a gilt spends in a BGF unit, starting at 150 days of age and ending the day she is sold after weaning her fourth-parity litter, she is culled or dies.

The effect of weight class is again significant. Classes 1 and 2 had a longer herd life than classes 3 and 4, mainly because fewer class 3 and 4 gilts actually farrowed a litter. No interaction with genetic lines was found, indicating this difference will be the same in all lines (Table 5).

Sow salvage value is income to producers. In the MLP, no culling for performance other than failure to breed was done, therefore no salvage value was received. But, all sows weaning a fourth-parity litter were weighed and sold with average weight recorded by gilt weight class (Table 5). Gilt weight at the start of the program had a significant effect on sow size at the end.

Maternal Ability It is important to evaluate the maternal ability of the females from each weight class. Litters were standardized by crossfostering. Herd managers in the MLP did not know the genetic lines therefore pigs were fostered among lines and sow parities. Weaning age averaged 15 days.

To evaluate differences in the profitability between gilts from the different weight classes, the number of lifetime marketable pigs was calculated (Table 4). A marketable pig was defined as a pig weighing more than 6 lb. at 15 days of age (weaning). The number of lifetime marketable pigs by gilt weight class is shown in Table 4.

Gilt Buying Decisions Pork producers face a capital budgeting decision when considering the purchase of replacement females (or any other depreciable asset). Capital budgeting fo r replacement gilts should consider the initial cost of the gilt, the number of parities she will be in the breeding herd and the associated expenses and income.

The analysis used to evaluate the value of gilts from the designated weight classes is based on discounted cash flows, which calculates Net Present Value (NPV).

NPV analysis is the process of taking an investment today, projecting the net income from the investment and putting these future earnings into present-day dollars by applying a designated interest rate. The reason for putting future dollars in present-day value is because one dollar today is worth more than one dollar tomorrow. This concept is known as discounting. NPV is the amount of money an investment is worth in today's dollars.

NPV takes into account the amount and length of the investment, how long it takes the investment to return a profit, and the cost of money (interest and risk).

NPV analysis can help compare gilts with different productivity levels, lengths of service, feed conversions and costs, to determine which will most likely be the most profitable.

NPVs greater than zero indicate that an investment will be profitable when all of the above factors are considered. NPVs less than zero identify unprofitable investments.

NPV Example A model breed-to-wean production system was used in the present analysis to evaluate economic differences between gilts of different weight classes. This model best evaluates differences due to maternal/ reproductive ability and does not include productivity and the market value differences influenced by the progeny's genetic potential for growth, feed conversion or carcass cutability.

Information required to evaluate the capital budgeting decision between gilts from the different weight classes and to calculate their NPV includes:

1. Initial cost was standardized at $200/gilt based on $100 actual cost for each early weaned replacement gilt and $100 feed and facility costs required to get a gilt to breeding age and size.

2. Percentage of gilts purchased in each weight class that do not enter the breeding herd (Table 6). Total cost per gilt entering the breeding herd is inflated according to this percentage.

3. Cull gilts were assumed to have a market value of $44/cwt. Average weight of gilts sold for class 1 was 280 lb. Weight differences between the classes are listed in the column "cull gilt selling weight" in Table 6.

4. It was assumed that each gilt incurred an additional $7.50 expense for development costs (vaccinations, feed, veterinary, labor, etc.).

5. The expected productivity of the gilt (pigs/litter, litters/year, etc.) Based on the number of lifetime pigs born alive, lifetime pigs weaned and percentage of substandard pigs, the lifetime number of marketable pigs per gilt entering the program was calculated by gilt weight class (Table 4).

6. Value of each marketable, early weaned pig was $30. Substandard pigs were assumed to have no value.

7. The expected costs of production for the gilt and her offspring. This assumed a $400,000 facility investment for a 600-sow, breed-to-wean operation. It was assumed that 50% (mid-point) equity existed in the operation modeled. Additional cost assumed (per litter basis) include: $10 veterinary/ medicine, $15 breeding costs, $36 labor, $20 utilities, $4 hauling/marketing, $7 maintenance and repairs, 20 cents waste handling, 40 cents insurance.

8. The length of time a gilt remains in the breeding herd (parities) is calculated using the "herd life" data in Table 5.

9. The discount rate (interest or opportunity cost of capital) was assumed to be 10% (approximate 5-year average) for operating and long-term debt.

10. The salvage or cull value/sow is adjusted for breeding herd death loss. Cull sows, including sows remaining at the end of four parities were assumed to be worth $35/cwt. However, weights of cull sows varied by gilt weight class and are listed in Table 6.

11. Pre-weaning and breeding herd mortality rates. These values were calculated on a size class basis and are listed in Table 6.

12. Feed costs were assumed to be $177/ton for gestation feed, $160/ton for lactation. Gestation feed was standardized at 6 lb./female/day. Lactation feed was assumed to be 15 lb. of feed/day for a 15-day lactation.

These assumptions were applied to all weight classes. If any of these assumptions are changed, the absolute NPV will also change. However, the relative differences between the NPV for each weight class should remain relatively unchanged. For example, if a producer receives $32 per marketable weanling pig, the NPV for each weight class would rise, but the difference between the lines should remain relative to each other.

Cull Value The percentage of gilts not entering the breeding herd (not farrowing a litter) was 16, 18, 21 and 28% for gilts in weight classes 1 through 4, respectively (Table 6). The initial costs of those gilts, plus the cost to get them to breeding weight, was assessed against the gilts that did produce litters - less their cull value, of course.

Gilts were assumed to have weight differences as they entered the BGF units and that resulted in the weight classification used in this analysis. Weight class 1 cull females were therefore credited for 280-lb. market weights. Weight class 2, 3 and 4 culls were assumed to weigh 260, 244 and 223 lb., respectively (Table 6). Additionally, each gilt across all weight classes was assessed $7.50 for vaccination and other veterinary expenses upon entering the breeding herd.

After accounting for the income of gilts marketed, the cost of each gilt farrowing a litter for weight classes 1, 2, 3 and 4 was $227, $232, $240 and $261, respectively (Table 6). When calculating the NPV of a depreciable asset the salvage value or cull value must be accounted for - $35/cwt. in this analysis.

Of course, sow culling weight influences salvage value. Weight class 1, 2, 3 and 4 gilts had an average culling weights of 492, 480, 468 and 458 lb., respectively (Table 6). Not all sows make it to culling. Hence, the value of cull sows should be reduced by the sow mortality percentage for each weight class. Sow mortality rates were similar across weight classes as shown in Table 6.

Lifetime number of marketable pigs produced for the four weight classes (Table 6) are calculated by dividing the number of marketable pigs by the number of gilts entering the breeding herd. In this study, NPV was calculated at parity 4 and is shown for the four weight classes - $128, $120, $103 and $70, respectively.

NPV Differences As noted earlier, the absolute value of the NPV for each weight class is not as important as the difference that exists between them. The greatest NPV difference ($58) existed between weight classes 1 and 4, favoring weight class 1 (Table 7).

Closer examination reveals some other interesting points. When the number of marketable pigs is calculated using only the females farrowing a litter, gilts from weight class 4 can be just as productive as any other weight class. Or, the number of lifetime-marketable pigs from gilts in the four weight classes farrowing only a first litter, we see 28.2, 28.3, 27.4 and 28.8 pigs produced, respectively (Table 6).

These results indicate that when purchasing segregated early weaning (SEW) replacement gilts, producers should expect variation in the gilts' growth rate. However, you should not automatically cull the slowest growing 25% because they are too small. In fact, these females can be just as productive, or more so, than faster growing, heavier gilts at breeding age. The biggest disadvantage of the class 4 gilts is a larger proportion fail to cycle in a timely manner. Thus, the reason more class 4 gilts fail to enter the breeding herd. This results in the cost per gilt entering the breeding herd being substantially higher for weight class-4 gilts compared to gilts from the other weight classes.

SEW Replacement Gilts So, what is the best approach to purchasing SEW replacement females for the breeding herd?

Don't automatically cull the bottom 25% of these gilts based on size or slow growth rate. Yes, they may have fewer pigs born alive, however with an effective crossfostering program, these gilts can raise as many or more marketable pigs as their counterparts in the heavier weight classes. Even though the NPV difference between weight class 1 and 4 is $58, both numbers are positive, indicating both are profitable investments. The difference in NPV just suggests that the investment in the heavier class 1 gilts will be more profitable compared to class 2, 3 and 4 gilts through their lifetime.

If assumptions change drastically, particularly price received for the early weaned pig, then the lighter gilts from class 4 have less margin of error in which they will remain profitable compared to gilts that were heavier.

Producers should also consider management changes that would ensure more class 4 gilts enter the breeding herd and produce a litter.

Ken Stalder, University of Tennessee; Rodney Goodwin, National Pork Producers Council