Economic Modeling of Returns to Swine Feeding and Management

Modern Swine Industry

• Modern Swine Production is Extremely

Complex

– Feeding strategies involve

• Feed ration formulation – nutrient levels

• Choice of number of rations to feed

• Choice of time periods for feeding rations

• Timing and feed concentration of growth promotants (e.g., antibiotics or ractopamine)

Modern Swine Industry (cont’d.)

– Marketing strategies involve

• Choice of when to “turn the barn” with All-

In/All-Out system

• Optimal target market weights and sort weights

• Contracts

– Nutrient management / Air Quality

• Manure value positive or negative

• Feed additives (e.g., phytase) affect nutrient absorption

Modern Swine Industry

(cont’d.)

– Genetic Sources

• Match health in your system

• Production flow - All-In/All-Out system?

• Optimal target market weights and sort weights for these genetics

– Marketing Agreements

– Packer grids

– Managing Inputs

• Feed Ingredients, etc.

– ALL LINKED!

Economics of Swine Nutrition

• Cost per ton of feed

• Cost per unit of lysine

• Cost per unit of digestible lysine

• Cost per unit of digestible energy

• Total feed cost per pig marketed

• Cost per lb of gain

• Cost per lb carcass sold

• For Every 0.01 improvement in F:G will decrease total feed costs by $0.28-0.30/pig

Boyd, 2008

Phase Feeding

Nutrient Requirements over Time

Pigs' Requirement

Typical Phase Feeding

Split Sex and Phase Feeding

• Split Sex feeding will save $0.50-0.75/cwt

• Phase Feeding – How much can it save?

– Is more better?

Projected theoretical savings per pig due to increasing the number of diet phases.

Number of

Grow-Finish diet phases

2

Diet cost per pig marketed a

$42.55

Savings compared to a

Two phase program

----

Incremental savings per additional diet phase

3

6

9

4

5

12

$41.41

$41.01

$40.67

$40.43

$40.10

$39.90

$1.15 ($1.60)

$1.55 ($2.48)

$1.89 ($3.02)

$2.12 ($3.39)

$2.46 ($3.93)

$2.65 ($4.24)

$1.15

$0.40

$0.34

$0.24

$0.11

$0.06

a Corn=$2.24/bu, 44% SBM = $240/ton; Assumed equal pig performance and feed intake b D.D. Koehler, 1997

(updated to $3.90/bu corn and $315/ton SBM, $900/ton DiCal – BTR 1/2009)

Corn Particle Size

Hammer, Hammer, Roller mills

Every 100 Microns reduction improves feed Eff. By 1.2%

(7.5-10 lbs of feed/pig)

Angle of Repose

Feed Bridging

Management Options

Reduce Selling Weight

• Hit the Bottom of the grid instead of the top

– IPC – 170-214 lb carcass (230-285 lb Live)

– Pigs will be leaner and increase lean premiums

– Need to be careful not to have too many lights

• Discounts 160-170 lb ($2/CWT) then $8 and $12/CWT

• What does it cost to leave the Facility Open or less than capacity?

• Saves A lot of FEED!

55-210

210-220

220-230

230-240

240-250

250-260

260-270

270-280

280-290

Reduce Selling Weight

Weight Feed (total),

LB

532

34 (566)

35 (601)

36 (637)

37 (674)

37 (711)

38 (749)

39 (788)

40 (828)

Feed Savings from 270 lb

-110 lb (15%)

-74 lb (10%)

-37 lb (5%)

+39 lb

+79 lb

Evaluation of optimal market weights for different pigs

• The actual feed intake, BW , backfat and loin depth data were fitted to growth functions for the high lean gain pigs

• The average lean gain pigs were modeled to have greater rate of fat accretion and ADFI than the high lean gain pigs.

• The low lean gain pigs had the greatest fat accretion – and most rapid decrease in percent lean.

Evaluation of optimal market weights for pigs

• The growth, DFI , backfat and loin depth data was applied to three pork processor’s grids – Tyson’s, IPC and Farmland foods.

• Corn and soybean meal prices were originally set to 10 yr. average values – corn

$2.50 /bushel, 48 % Soybean meal $190/ton and then increased by 20 % to 2.4 times the average values.

Pigs were split sex – phase fed.

Predicted Feed Conversion for Three Genetic

Populations of Barrows

Predicted Feed Conversion for Three Genetic

Populations of Barrows

Relationship of backfat to live weight in three genetic populations of gilts

Optimal Slaughter Weight with

Increasing Feed Costs

Corn and soybean meal prices were originally set to 10 yr. average values

Corn $2.50 /bushel, 48% SBM $190/ton and then increased by 20 % to 2.4 times the average values.

Tyson –Gilts

Farmland -Gilts

Farmland -Barrows

Impact of Pen unloading

Pigs per pen

Pigs removed

Sq. Ft/pig

Start Wt., lb

Residual Wt., lb

Avg. Final Wt., lb

Removed Avg. wt

Marginal ADG

Marginal F:G

Feed cost/30 lb of gain

Marginal $/pen

24

278

0

1.45

4.24

0

7.25

249

249

$12.72

$2,707

24

280

268

1.83

3.76

6

9.67

250

244

$11.28

$2,748

24

270

267

1.84

3.63

12

14.5

250

233

$10.89

$2,739

Boyd, 2008

Impact of Pen unloading

Pigs per pen

6 Pigs removed

Sq. Ft/pig

Total Wt Sold

Total Feed Used

COV LW at 24 wks

Sort Loss, $/pig

27

0

6.85

7598

4366

8.5

3.49

27

20 wks

27

22 wks

27

20 and 22 wk

7477 7642 7374

3524 (19%) 4077 (6.6%) 3131 (28.3%)

7.2

2.52

7.5

2.69

6.4

1.13

Campbell, 2006

Antibiotic and Herd Health

Programs

• Using the right level and antibiotic

– Is it working for you

– Can you use something else or none

– Feed Savings relative to Increased

Cost?

• Updating Herd Health

– Reduce costs long term

Sow Productivity

Weaned PSY

$/sow

Gestation $197

20

$9.85

22.5

$8.76

25

$7.88

Lactation $84

Total $281

$4.20

$14.05

$3.73

$12.49

$3.36

$11.24

Lb/sow Lb/pig

Total Feed 2,175 109 97 87

Feeding Cull Sows

ADFI, lb

MWC1

MWC2

MWC3

MWC4

ADG, lb

MWC1

MWC2

MWC3

MWC4

G:F

MWC1

MWC2

MWC3

MWC4

Feeding Cull Sows

14 d 28 d 42 d 56 d 70 d

8.07

11.56

11.26

10.19

3.13

4.48

2.98

3.09

0.37

0.41

0.26

0.28

9.52

12.94

12.19

11.68

2.45

3.38

2.29

2.22

0.27

0.28

0.18

0.17

10.43

13.77

12.59

12.63

1.93

2.44

1.76

1.51

0.19

0.17

0.13

0.10

10.80

14.07

12.44

13.04

1.57

1.67

1.39

0.96

0.14

0.09

0.10

0.05

10.63

13.82

11.76

12.90

1.37

1.05

1.19

0.57

0.12

0.04

0.10

0.03

Feeding Cull Sows

Feed costs = $0.09/lb and Fixed costs = $0.25/day

Sow prices = $0.33, $0.36, $0.38, and $0.40, for respective MWC

Cull Sows and Paylean (21 d)

• Increased ADG (3.15 vs 2.65)

• Increased G:F (0.29 vs 0.25)

• No Diff in ADFI

• Decreased Fat Accretion (0.31 vs

0.41 in.)

• 10.5 lb more sow weight

• Is it cost Effective?

Knauer et al., 2008

Economics of Swine

Nutrition and Production

• Cost per ton of feed

• Cost per unit of lysine

• Cost per unit of digestible lysine

• Total feed cost per pig marketed

• Cost per lb of gain

• ROI per pig space per day

• Lots of variables that can affect profitability!

Questions?