Challenging the conventional wisdom about maintaining breeding herd inventories may be a strategy to reduce losses, given the current economic conditions in the pork industry.
In 2004, Kansas State University (KSU) research by Rodger Main and others challenged the merit of very young weaning ages common in the industry. The KSU work showed significantly reduced preweaning mortality for pigs weaned at 21 days of age, relative to those weaned at 12, 15 and 18 days of age, and wean-to-finish feed conversion was also improved.
Many producers increased weaning ages by adding more space in farrowing to accommodate the longer lactation periods without reducing breeding herd inventories. Current economic conditions preclude adding more farrowing space to accommodate older weaning averages. However, in an effort to minimize losses, it may be time to consider increasing weaning age while reducing breeding herd inventories.
In the 1980s and 1990s, the pork industry transitioned from outdoor production with relatively low fixed costs to total confinement and relatively high fixed costs. To make money in a high fixed cost industry, throughput is the key. For pork producers, that means spreading costs over more pigs and pounds of pork.
Maximizing throughput of the breeding herd is accomplished by:
Maintaining breeding herd inventories to fully utilize the space available in breeding/gestation, nursery and finishing facilities;
Decreasing weaning age to increase turnover of farrowing space; and
Increasing the productivity of breeding females by increasing the number of pigs weaned/breeding female/year.
Farrowing typically is the most expensive space to build. It is also the bottleneck that limits the number of pigs produced in most production systems.
Weaning age works like a flow regulator on the farrowing crates by increasing or decreasing the number of litters that can be farrowed and weaned from each crate. Increasing the weaning age slows the flow; decreasing the weaning age increases the flow. Increasing the flow requires more females in the breeding herd and means more growing pigs.
But is weaning at a younger age to produce more pigs always better? Younger pigs are harder to manage in the nursery, require more of the most expensive starter diets and may not perform as well from wean to finish. Furthermore, younger weaning ages mean shorter lactation lengths for breeding females, which give them less time to recover and may decrease reproductive performance in subsequent litters.
The advantages of weaning older pigs may include:
Less expensive starter diets;
Decreased wean-to-finish mortality;
Increased wean-to-finish average daily gain;
Improved wean-to-finish feed conversion ratio;
Increased percentage of full value pigs marketed;
Lower animal health costs;
Increased farrowing rate in subsequent parity;
Increased pigs born alive in subsequent parity; and
Decreased prewean mortality in subsequent parity.
Whether it pays to increase weaning age by reducing breeding herd inventory depends upon whether the advantages to weaning older pigs compensate for the loss of throughput.
The payback potential is very sensitive to market hog prices relative to diet costs. When market hog prices are high relative to diet costs and margins on every pig, the reward for producing more pigs is high. Anything that reduces the number of pigs produced, including reducing the breeding herd inventory, is going to reduce the profitability of the operation. The advantages to weaning an older pig won't likely be enough to compensate for the loss of throughput.
The opposite is true when market hog prices are low relative to diet costs and when margins are low. Given the low margins the industry has experienced for the past two years, reducing the breeding herd inventory to increase the weaning age may be a strategy to reduce losses in today's economic environment.
A breed-to-finish production and budgeting spreadsheet designed specifically to evaluate whether it pays to reduce breeding herd inventory to increase weaning age is available from the Iowa Pork Industry Center (IPIC) at Iowa State University (ISU).
The spreadsheet is free, but requires completion of an online registration form. Go to the IPIC free software page, http://www.ipic.iastate.edu/software.html, choose “Spreadsheets,” and then “Economics of Weaning Age Calculator.” The spreadsheet works with Microsoft Excel 2003 and newer versions.
Next Page: A Case Study
Alternative breeding herd inventories and weaning ages may be evaluated for a baseline and up to four scenarios. Operation-specific production and financial information can be entered.
Changes from the baseline for key reproductive and wean-to-finish measures that may be affected by weaning age can be entered for each scenario in the “Key Inputs and Economic Impact” tab.
The spreadsheet also helps determine how much the breeding herd inventory must change for alternative weaning ages to ensure the farrowing capacity of a farm is not exceeded.
Alternative market hog prices and diet costs may be entered in the same tab to evaluate whether increasing weaning age by decreasing breeding inventory increases or decreases profits as these parameters change.
A Case Study
In April 2008, the owners of a sow cooperative producing weanling pigs decided to increase average weaning age and decrease the breeding herd inventory in an effort to reduce total costs.
This unit now has over a year's worth of breeding herd and post-weaning production records since switching to longer lactation lengths.
Average weaning age was increased from 18.5 days to 21.1 days (Table 1). The average breeding herd inventory was reduced from 5,403 to 4,953 to compensate for the additional time sows and litters spent in farrowing crates. Reproductive and grow-finish performance for the year before and after the switch, documented in a href="/images/reproductive-growing-pig.jpg" target="_new">Table 1, was entered into the IPIC Economics of Weaning Age Calculator spreadsheet to evaluate the economic impact of the changes.
The current market hog price of $0.62/lb. carcass was plugged into the model. The lactation diet costs averaged $225/ton, while gestation, replacement gilt and wean-to-finish diets averaged $180/ton. The same values for market hog prices and diet costs were used for “before” and “after” the increase in weaning age scenarios to evaluate only the change in performance related to the change in weaning age and breeding herd inventory.
This was clearly a good decision for this farm. The results, summarized in Table 2 and Table 3, show the farm was losing $974,731 annually before the weaning age increase. Increasing the weaning age and reducing the size of the breeding herd lowered their losses by $749,501. Total annual revenue for the farm declined by $221,866, but this was more than offset by the $971,367 reduction in costs.
The number of pigs weaned annually declined by 3.1% as a net result of fewer breeding females, fewer litters/breeding female/year and more pigs weaned/litter. The litters farrowed/ year declined by 9.5% as a result of the smaller breeding herd inventory and increased weaning age.
Total number of pigs marketed/year declined by only 1.7%, and total carcass weight of pork marketed declined by the same amount as the target market weight did not change. The decline was a result of fewer pigs weaned and placed in the nursery, but some of that decline was offset by lower wean-to-finish mortality.
The change in weaning age reduced the total annual costs in the breeding herd by 5.3%. Feed cost and non-feed variable costs both declined as the number of breeding females inventoried and pigs weaned declined. Feed costs declined relatively less on a percentage basis as the longer lactation periods increased the amount of the relatively expensive lactation diet fed. Fixed costs declined by the amount of depreciation and interest saved on fewer breeding females.
Total annual costs in the grow-finish herd declined 6.9%. Feed costs and non-feed variable costs both declined as a result of fewer pigs placed, but the decline was offset somewhat by lower mortality rates. Feed costs also declined due to the improvement in feed conversion. Fixed costs were unchanged since it was assumed the wean-to-finish facilities were owned.
Other cost advantages not considered in this example include feeding less of the relatively expensive first nursery diet. This can be a substantial savings depending upon how much extra weight the pigs gain prior to weaning. This farm saw a significant improvement in average weaning weight, which increased from 11.7 to 14.5 lb.
As fewer pigs are weaned, there may also be an opportunity to reduce the number of nursery or finishing spaces and the fixed costs associated with them.
Increasing weaning age by reducing breeding herd inventory would also improve financial liquidity in the short run. Most of the cost reductions are cash costs that would be realized before the reduction in cash flow caused by a decline in revenue. This alone may be sufficient reason to consider reducing breeding herd inventory.
There may be constraints that limit a producer's ability to increase weaning age by decreasing breeding herd inventory, such as production or marketing contracts that specify the number of pigs delivered.
About the author: Derald Holtkamp, DVM is on staff at Iowa State University, College of Veterinary Medicine, Ames, IA; and Paul Yeske, DVM; is a partner in the Swine Veterinary Center, St. Peter, MN.