Throughput The Ultimate Test for Production

It sounds simple enough. Flow as many pigs as you can through a given set of facilities to maximize profits (income over expense), while at the same time providing proper animal care.

But as all pork producers know, the facts paint a vastly different picture. Pork production is a biological process, and with this process comes variation.

The challenge is to match pig flow or throughput to a finite set of facilities with a given set of constraints. Here, throughput is defined as the level of pork production in its many stages of lifetime growth.

The Role of Variation in Production

The impact of variation in pig numbers is evident every year in the marketplace. Summer's hog prices are generally higher because fewer pigs are available for slaughter. In contrast, low hog prices in the fall are mostly due to a large increase in available numbers.

These variations in the number of pigs available for slaughter generally happen in the face of a relatively stable number of females in the breeding herd and a relatively fixed amount of facilities.

However, as a larger percentage of swine production in the United States converts to confinement facilities, there is less flexibility to deal with the variation in throughput.

Managing Variation

While it is easy for nursery and grow-finish owners and managers to blame the farrowing site for variation in pig numbers, the reality is that management of variation is still as much an art as it is a science. Managers of farrowing facilities have a fixed number of farrowing crates, often associated with a fixed number of gestation spaces.

When all of the sources of variation in reproductive performance are factored in, it's no small wonder there is any consistency in output at all. Not only do litter sizes vary, but so do factors such as the age at first estrus, number of days for return to estrus, conception and farrowing rates and the number of females that must be replaced. All of these factors add to the complexities of having a fixed number of pigs weaned per week, per farrowing group.

Production Challenges

The challenge of variation in the farrowing facility plays out in nursery and grow-finish facilities. With finishing facilities now costing upwards of $200/pig space, the decision to add extra space to accommodate the variation in pig flows becomes a serious consideration of capital investment.

In both nurseries and finishers, the decision ultimately comes down to one of capital investment (and ultimately cost of production) vs. possible compromises in pig performance. Deciding how much space to build for production, and what happens to pig performance if space is reduced, is the ultimate balancing act all producers struggle with as they invest in production facilities.

Fill, Marketing Concerns

Compounding the pig flow-throughput issue is the changing nature of nursery and grow-finish production facilities. With all-in, all-out (AIAO) pig flows, empty spaces cannot be utilized in the manner common to continuous-flow facilities.

With continuous-flow facilities, an empty pen can be filled at any time by an incoming group of pigs. With AIAO, to preserve the integrity of the system, a pen (or room or building) remains empty until the last pig is removed from the facility.

Maintaining AIAO pig flow presents a major challenge for finishing facilities because pigs are commonly removed for slaughter over a period of weeks in order to match up with packer payment matrixes. Currently, the best estimate is that 90% of all pigs sold to slaughter from finishing facilities in the United States come from production units where pigs are removed over a period of time.

Generally, if pig age at placement in the finishing facility is within 7-10 days, pigs are sold to slaughter over a three- to four-week window. During this sale period, pig spaces in the facility naturally remain empty with AIAO management.

From the production side of the financial equation, it makes much more sense to sell or empty entire barns at one time vs. over a period of weeks. This assures that every pig space has a pig-earning income (i.e., gaining weight) every day.

The challenge of this selling strategy, however, is that slaughter payment matrixes are designed by individual packers to reward producers for pigs that most closely fit their weight and quality needs. U.S. slaughter plants have different needs, as evidenced by the wide range in payment grids currently available.

The Impact of Selling Strategies

Table 1 provides an example of the impact that selling all pigs from a facility vs. removing pigs over a three-week period has on sale weight and income.

Column A represents a finishing facility that removes pigs over a three-week period for slaughter, with an average sale weight of 275 lb. Column B represents the same facility, but all pigs remain until they are sold at one time.

Average daily gain and feed conversion are slightly worse, due to crowding, when pigs are not sold over a three-week period.

Final market weights (289 lb.) in column B are higher because the heaviest pigs, which would have been removed at desirable market weights, remain in the facility. Those pigs also have a slightly lower overall diet cost because a larger share of the finishing group is being fed the lowest-cost diet.

Death loss in column B pigs is increased slightly to reflect more days on feed. This does not necessarily suggest that death loss increases in facilities where pigs are “dumped” or marketed all at one time.

Finally, the average price received was lowered to the point where the net returns for column B equaled the returns from column A. This becomes an estimate of how much lower the average price received can be when dumping vs. “topping” pens (selling pigs when they reach the desired weight), due to the large increase in sale weight.

In short, this suggests there is no one-size-fits-all formula that meets the needs of grow-finish facilities. The amount of grow-finish capacity a production system needs is ultimately based on the variation in pig flows from the farrowing site, the expected performance of the pigs in the facility, and the delivery requirements of the slaughterhouse as expressed in the payment grid.

Animal Welfare Flow Considerations

A recent variant in the pig-flow/throughput discussion is the impact that animal welfare constraints have on production systems. While there has been considerable discussion already in the industry regarding gestation crates vs. loose sow housing, an emerging discussion with major implications for facility throughput is space allocation in grow-finish facilities.

Research has shown that as we give pigs less space during the grow-finish period, average daily feed intake and average daily gain decrease. For most producers, the balancing point between average daily gain and facility expense has been a space allocation of less than 8 sq. ft./pig to slaughter weight.

In fact, a recent industry survey on the space allocation debate suggests that the average pig density in fully-slotted finishing facilities in the United States is 7.2 sq. ft./pig. The survey was part of an evaluation funded by the National Pork Board.

This reality contrasts with the industry's recommendation of 8 sq. ft./pig from 150 lb. to slaughter weight, contained in the Swine Care Handbook. That manual provides the basis of proper pig space allocation under the National Pork Board's Swine Welfare Assurance Program (SWAP).

The challenge of relating space allocation to pig welfare comes down to the fact that pig size within a fixed facility (pen size) is constantly changing. The question becomes: “How many pigs per pen of given size?”

For instance, pens in fully-slotted facilities that measure 10 ft. wide by 19 ft. deep are routinely stocked with 23 pigs/pen (8.3 sq. ft./pig) up to 28 pigs/pen (6.8 sq. ft./pig).

While this method of defining space allocation by square foot per pig reflects the realities of pig numbers and facility space, it doesn't take into account the known effect of pig size.

Redefining Pig Space Needs

A more recent method of defining the space needs of pigs is to express pig size as a function of body weight and relate that to space. This allometric equation is most often written as:

A = kBW.667, where A is the area per pig expressed in square meters/pig, k is a constant, and BW is body weight in kilograms.

A recent analysis of published literature on the effects of space allocation on pig performance was led by Harold Gonyou, a research scientist in ethology from the Prairie Swine Centre in Saskatchewan, Canada. Funded by pork checkoff, the analysis suggests that average daily feed intake and average daily gain for the entire grow-finish period are maximized when k is approximately 0.0335 for both fully-slotted and partially-slotted facilities. Any increases in space allocation beyond this constant generally did not produce any improvement in performance.

However, for each 3% decrease in space allocation, average daily gain and average daily feed intake decreased 1%, with no significant overall effects on feed conversion.

These results support the earlier observation that producers have generally stocked facilities at a rate that resulted in a decrease in average daily gain vs. stocking at a rate that maximized individual pig performance. The net effect of this overstocking or crowding has been increased pounds of gain/unit of floor space and lowered costs of production.

Animal Welfare Production Standard

To understand the impact of an animal welfare standard that might be based on space allocations that maximize pig performance, let's first look at how the allometric equation defines space when k is 0.0335.

Table 2 is the estimated space allocation at which pig performance would not be impacted. Note that this table predicts that in order for performance to not decrease due to space allocation restrictions, grow-finish pigs require 8.27 sq. ft./pig when the average weight of all pigs in the pen is 240 lb. This is a 15% increase in space when compared to the current industry standard of 7.2 sq. ft./pig.

Critical Weight Evaluation

When considering the issue of pig space and throughput, it is important to determine the critical weight that defines when space allocation is limiting performance. There are two possible answers — the average weight of all pigs in the pen on the day the first pig is removed, and the weight of all pigs delivered for slaughter.

Critics of the industry would like to use the sale weight of all pigs, since it is generally taken on a certified scale.

Yet, as was discussed earlier, the reality is that pigs are removed from a facility over a three- to four-week period.

Weight Estimates

One way to estimate pig weight at the time of first removal is to use Table 3. Typically, pigs within 10 days of age at placement that are housed in AIAO facilities have coefficient of variation (CV) for pig weight in the range of 10-13% when the first pig is removed.

If 20% of the pigs are marketed at the time of first removal, and they average 265 lb. live weight, the average pen weight is very close to 230 lb., assuming a 12% CV. In Table 3, the 90^th percentile value represents the estimated average weight of the top 20% of the pigs in the pen (265 lb.) when the pen averages 230 lb. for all the pigs in the pen (50^th percentile).

This suggests that if pig performance becomes a welfare criteria, space allocations will need to be even greater than the 8 sq. ft./pig currently listed in the Swine Care Handbook.

If space allocation becomes a production standard in the United States, how will the industry react?

Options for pork producers include building more facilities, selling pigs at lighter weights or farrowing fewer pigs. All of these options will increase production costs.

In the end, it's doubtful that pigs will be sold at lighter weights, especially if grain prices remain low and slaughter plants don't do a major revision of their payment grids.

Farrowing fewer pigs dramatically ramps up costs as the entire production chain must absorb the inefficiencies associated with under-utilized production facilities.

Even adding more finishing facilities has added costs, which includes the cost of community resistance. That raises the question of whether rural communities will allow more production facilities to be constructed if consumers (generally urban residents) require more space/pig as part of a welfare requirement.

Summary

Throughput is not as simple as maximizing output for a given set of inputs. Increasingly, throughput includes consideration of non-traditional restraints in the production decision-making process.

For now, these non-traditional restraints may include animal welfare.

In the future, these restraints may include standards for air emissions and land application, as well as standards for community resistance.

Successful pork producers will be those who can best anticipate and plan for these unexpected restraints.