Sow Longevity – Its Improvement and Economic Importance Ken Stalder Department of Animal Science Iowa State University Reported Averages Replacement Culling Avg. Parity Death Rate, % Rate,% At Culling Loss, % PigCHAMP Pigtales 60 53 42 47 3.8 Not Reported 7.8 Worldwide Replacement Rates Australian average 63.8% replacement from 1992 through 2002 Brazil 2002 averaged 55% replacement rate, 43% culling rate, 5.5% death loss, and average parity of culled sows of 4.16. Canada 2002 averaged 58% replacement rate, 39.5% culling rate, 6.5% death loss, and average parity of culled sows of 4.71. Japan 2000 averaged 47.6% replacement rate, 28.6% culling rate, 5.3% death loss, and average parity of culled sows of 3.8. How Do Top Herds Perform? 2002 PigCHAMP data Upper 10 Percentile Replacement rate 32.7% Culling rate 22% Death Loss 2.8% Average parity at culling 5.5 Koketsu et al. (1999) A cohort of females born in 1990 Average lifetime pig production 67.2 pigs Average parity at removal was 5.6 parities Why should we be concerned with longevity? Performance differences Number born alive Litter weaning weight Grow – Finish Performance Better protection from disease?? Introduction of more gilts Associated costs Welfare issue Reasons For Culling Reason Reproductive failure Old age Performance Feet and leg problems Death Post-farrowing problems Other Percentage Culled 30 - 35 15 - 20 15 - 20 10 - 15 5 - 10 3 - 5 5 - 10 Cost of Replacing a Sow Replacement gilt Facility, feed, and labor during isolation and acclimation Vaccination and other veterinary expenses Disease risk Opportunity cost (interest rate) Performance difference between a gilt and mature sow. % of Sow Herd Ideal Parity Distribution 20 18 16 14 12 10 8 6 4 2 0 Industry Book 1 2 3 4 5 Parity 6 7 >7 Impact of Distribution on Productivity Average parity of sow herd 3.6 (industry) and 3.86 (book) National Swine Improvement Federation Parity adjustment factors for number born alive Parity 1 2 3 4-5 6 7 8 9+ Number born alive 1.2 0.9 0.2 0 0.2 0.5 0.9 1.1 National Swine Improvement Federation Parity adjustment factors for 21-day Litter Weight Parity 1 2 3 4 5 6 7 8 9+ 21-day Litter Weight Adj. 16.2 0 1.0 3.8 6.2 9.5 11.6 15.2 21.5 Given 10.2 pigs born alive from an average parity of sows farrowed of 3.5 Number Number Born Alive Per 100 Maximum Born Sows Alive Parity Value of Pigs Produced @ Value Per $30 / pig Year, $ Difference from Maximum, $ / Year 2 9.79 979 $29,370 $1,527,240 $87,360 3 10.05 1005 $30,150 $1,567,800 $46,800 4 10.21 1021 $30,630 $1,592,760 $21,840 5 10.31 1031 $30,930 $1,608,360 $6,240 6 10.35 1035 $31,050 $1,614,600 $0 7 10.35 1035 $31,050 $1,614,600 $0 8 10.33 1033 $30,990 $1,611,480 $3,120 Ideal Distribution Given • Maximum Parity •Culling per parity at 15% or 35% per year Parity 1 1 100.000 2 3 4 5 6 7 8 2 54.1 45.9 3 38.9 33.0 28.1 4 31.4 26.7 22.7 19.3 5 27.0 22.9 19.5 16.6 14.1 6 24.1 20.5 17.4 14.8 12.6 10.7 7 22.1 18.8 16.0 13.6 11.5 9.8 8.3 8 20.6 17.5 14.9 12.7 10.8 9.1 7.8 6.6 Take Home Point: Economic Importance of Sow Longevity Reduced sow longevity (parity of sow at culling) results in fewer litters in which a sow has an opportunity to be sufficiently productive in order for her purchase to be profitable. Because of the cost of replacement females and short herd life, commercial swine producers should economically evaluate their replacement breeding herd decisions. How do you evaluate how long a sow needs to remain in the breeding herd to be a profitable investment? Development of the Sow Longevity Calculator Farrow-to-Finish and Breed-to-Wean custom spreadsheets available Uses Net Present Value analysis Version 2.0 Now Available Producer supplies Herd specific production data Operation specific financial information Income Fixed and variable costs Data Entry Sheet Price of Gilt Annual Discount Rate Parity Discount Rate Percentage of gilts purchased that do not enter the breeding herd Development Feed Costs Other Development Costs Total Development Costs Total Gilt Price Number of Pigs Born Alive/Litter Birth to Weaning Death Loss Nursery Death Loss Grow-Finish Death Loss Death Loss on Sows Wt of gilts @ culling $/cwt for cull gilts Revenue for cull gilts $ 200.00 Number of Pigs Sold/Litter 10.00% Weight Sold, cwt. 4.48% $/cwt. Hogs $ 10% Revenue/Litter $ 28.06 Feed Cost/Litter $ 7.50 Other Expenses $ 35.56 Net Income/Litter $ 248.53 Number of sows 10.2 Litters/sow/Yr 11.77% Total Litters/Yr Average Parity of 2.45% Farrowed Sows 2.80% Years of Sow 5.90% Weight of Sow @ Culling 300 $/Cwt for Culls $ 44.00 Cull Value $ 13.20 $ $ $ $ 8.53 2.56 44.00 961.18 621.79 185.07 154.31 2,400 2.23 5,352 3.50 1.57 400 $35.83 $ 134.86 Feed Data Entry Class Pigs Sows Gilts Weight 5-10 10-15 15-25 25-50 50-80 80-120 120-170 170-Finish Feed SEW Diet Transition Diet Phase II Diet Phase III Diet Grower Diet I Grower Diet II Finisher Diet I Finisher Diet II Total Nursery-Finish Feed/Gain Gestation Diet Lactation Diet Total Replacement Gilt Diet TOTAL Feed (lbs/hd) 2.00 5.00 15.00 50.00 65.00 110.00 160.00 315.00 722.00 2.93 868.06 285.00 1,153.06 350 No. of Head) 9.00 8.93 8.85 8.78 8.72 8.66 8.60 8.54 Total (tons) 0.01 0.02 0.07 0.22 0.28 0.48 0.69 1.34 3.11 1.00 1.00 0.43 0.14 0.58 1 Price Feed ($/ton) Cost ($) $1,275.00 $11.47 $722.00 $16.11 $316.00 $20.99 $210.00 $46.11 $177.50 $50.31 $172.00 $81.93 $154.60 $106.36 $144.00 $193.68 $169.44 $526.96 $ $160.35 $177.08 0.18 $160.35 3.86 $ 161.02 COST/HEAD 61.71 $69.60 $25.23 94.83 TOTAL FEED COST/PURCHASED FEMALE $28.06 $ 122.89 $621.79 Facilities and Other Costs Operation Total $ 4,290,000.00 50% 10% Per Litter Investment / Facility Cost % Enterprise Equity % Interest Rate Annual Principal & Interest Payments ($349,088.87) $ Other Operating Expenses Veterinary and Medicine / Litter Breeding / Litter Waste Handling / Litter Insurance / Litter Labor / Litter Utilities / Litter Marketing and Hauling / Litter Maintence and Repairs / Litter Total Other Costs / Litter Non-Feed Costs/Pig $ $ $ $ $ $ 159,757.20 80,280.00 2,676.00 5,352.00 417,777.12 194,010.00 (65.23) $ $ $ $ $ $ 29.85 15.00 0.50 1.00 78.06 36.25 $ 45,652.56 $ 8.53 $ $ 84,989.76 $ 1,339,583.51 $ $ 15.88 250.30 29.33 Adjusting for Parity Performance Differences Parity Adjustments Number Born Alive 1 9 2 9.3 3 10 4 10.2 5 10.2 6 10 7 9.7 8 9.3 9+ 9.1 Parity Adjustment Caution Only make these adjustments if you are extremely confident in the production numbers by parity. Do not adjust if values from your herd are based on small numbers Within a parity Across all parities What does all of this get you? Net Present Value Analysis What does the NPV number mean? > 0 means the investment is profitable in the long term. < 0 means the investment will lose money in the long term. Sensitivity Analyses – Gilt Purchase Price (F-F) Net Present Value per gilt by parity when the price of replacement gilt varies. Gilt Purchase Price 1 2 3 125 $3.20 $52.54 $125.92 150 ($24.58) $24.76 $98.14 175 ($52.36) ($3.01) $70.36 200 ($80.14) ($30.79) $42.58 225 ($107.91) ($58.57) $14.80 250 ($135.69) ($86.35) ($12.97) 275 ($163.47) ($114.13) ($40.75) 300 ($191.25) ($141.90) ($68.53) 4 $203.29 $175.51 $147.74 $119.96 $92.18 $64.40 $36.63 $8.85 5 $277.35 $249.57 $221.79 $194.01 $166.24 $138.46 $110.68 $82.90 6 $341.67 $313.90 $286.12 $258.34 $230.56 $202.78 $175.01 $147.23 Sensitivity Analyses – Number Born Alive Net Present Value per gilt by parity when the number of pigs born alive varies. Number Born Alive/Litter 1 2 3 8.45 ($151.50) ($170.46) ($162.46) 8.70 ($141.31) ($150.51) ($133.16) 8.95 ($131.11) ($130.55) ($103.87) 9.20 ($120.92) ($110.60) ($74.58) 9.45 ($110.72) ($90.65) ($45.29) 9.70 ($100.53) ($70.70) ($16.00) 9.95 ($90.33) ($50.74) $13.29 10.20 ($80.14) ($30.79) $42.58 10.45 ($69.94) ($10.84) $71.87 10.70 ($59.75) $9.11 $101.17 10.95 ($49.55) $29.07 $130.46 11.20 ($39.36) $49.02 $159.75 11.45 ($29.16) $68.97 $189.04 11.70 ($18.97) $88.92 $218.33 11.95 ($8.77) $108.88 $247.62 4 ($147.64) ($109.42) ($71.19) ($32.96) $5.27 $43.50 $81.73 $119.96 $158.19 $196.42 $234.65 $272.87 $311.10 $349.33 $387.56 5 ($133.47) ($86.69) ($39.90) $6.88 $53.66 $100.45 $147.23 $194.01 $240.80 $287.58 $334.36 $381.15 $427.93 $474.71 $521.50 6 ($126.45) ($71.48) ($16.51) $38.46 $93.43 $148.40 $203.37 $258.34 $313.31 $368.28 $423.25 $478.22 $533.19 $588.16 $643.13 Sensitivity Analyses – Market Hog Price Net Present Value per gilt by parity for varying market hog price. $/CWT for Hogs 1 2 $ 32.00 (306.43) (480.72) $ 34.00 (268.71) (405.74) $ 36.00 (231.00) (330.75) $ 38.00 (193.28) (255.76) $ 40.00 (155.57) (180.77) $ 42.00 (117.85) (105.78) $ 44.00 (80.14) (30.79) $ 46.00 (42.42) 44.20 $ 48.00 (4.71) 119.19 $ 50.00 33.01 194.17 $ 52.00 70.72 269.16 $ 54.00 108.44 344.15 $ 56.00 146.16 419.14 3 ($637.16) ($523.87) ($410.58) ($297.29) ($184.00) ($70.71) $42.58 $155.87 $269.17 $382.46 $495.75 $609.04 $722.33 4 5 ($784.05) ($924.64) ($633.38) ($738.20) ($482.72) ($551.75) ($332.05) ($365.31) ($181.38) ($178.87) ($30.71) $7.57 $119.96 $194.01 $270.63 $380.46 $421.30 $566.90 $571.96 $753.34 $722.63 $939.78 $873.30 $1,126.22 $1,023.97 $1,312.66 6 ($1,061.79) ($841.77) ($621.74) ($401.72) ($181.70) $38.32 $258.34 $478.36 $698.38 $918.40 $1,138.43 $1,358.45 $1,578.47 Sensitivity Analyses – Feed Costs Per Market Hog Net Present Value per gilt by parity for varying feed costs. Feed Cost/Head 1 2 $ 46 33.50 195.16 $ 49 10.78 149.97 $ 52 (11.95) 104.78 $ 56 (34.68) 59.59 $ 59 (57.41) 14.40 $ 62 $ $ $ $ $ 65 68 71 74 77 (80.14) (102.86) (125.59) (148.32) (171.05) (193.78) (30.79) (75.98) (121.17) (166.36) (211.55) (256.74) 3 383.94 315.67 247.40 179.13 110.85 4 573.94 483.14 392.35 301.55 210.75 5 755.78 643.43 531.07 418.72 306.37 6 921.29 788.70 656.11 523.52 390.93 42.58 (25.69) (93.96) (162.23) (230.50) (298.77) 119.96 29.16 (61.63) (152.43) (243.22) (334.02) 194.01 81.66 (30.69) (143.05) (255.40) (367.75) 258.34 125.75 (6.84) (139.43) (272.02) (404.60) Points: Factors Take Home Points Influencing Net Present Value of a Breeding Herd Replacement Female Major Factors Pigs produced (number born alive, mortalities at all levels, and substandard pigs at marketing) Price received for pigs marketed ± ½ pig changes parity at which positive NPV is reached 5% change in number born alive ± 2$ - 4$ changes parity at which positive NPV is reached 4.5% to 9% change in price Feed costs (feed efficiency and ingredient cost) ± 3$ per head changes parity at which positive NPV is reached 4.8% change in feed costs Take Home Points: Factors Influencing Net Present Value of a Breeding Herd Replacement Female Relatively Minor Factors Replacement Gilt Cost ± 50$ change in gilt price required to change parity at which positive NPV is reached 25% change in number born alive Interest Rate Operation Equity Cull Animal Market Price Factors Influencing Sow Longevity Host of management effects feed intake, lactation length, gestation housing, etc. Factors under some genetic control Backfat of gilt at selection effects sow longevity Summary Improved longevity can increase profitability Focus on management practices that improve longevity More sows should be culled because of poor performance rather than reproductive reasons. Those Interested in The Spreadsheet Spreadsheet designed to evaluate the investment in a replacement gilt available at: Iowa Pork Industry Center 515-294-4103 Iowa Pork Industry Center Web Site: http://www.extension.iastate.edu/ipic Porkline (Iowa Only) 800-808-7675 e-mail me at stalder@iastate.edu Thank You for Your Time and Attention Are there any questions?