Balancing the cost and opportunity of taking pigs to heavier weights.
Marketing hogs at weights that offer the best return has always been a key production strategy. But what is the optimum market weight for your hogs?
A recent study on the topic evolved from the National Pork Producers Council's Quality Lean Growth Modeling project. It was to determine the economic feasibility of taking market hogs to various weights.
In the study, one-third of the pigs were killed at 250 pounds, another third at 290 pounds and the rest at 330 pounds. The test included six genetic lines and the hogs were fed four different diets.
John McKissick, University of Georgia agricultural economist, analyzed the numbers in a high-, medium- and low-hog-market price scenario, with high, medium and low feed costs.
He found that all genetic lines were less efficient going from 250 pounds to 290 pounds than they were moving from 220 pounds to 250 pounds. However, some of the lines had a low enough efficiency decline that the final returns were still positive. Those animals had relatively low costs reaching 290 pounds and weren't discounted sharply at the heavier weights, because they stayed relatively lean and had larger loineyes. No genetic lines were profitable moving to 330 pounds.
The QLGM study showed that half of the genetic lines produced a positive return in moving to 290 pounds, when considering all scenarios. However, the high-lean genetic lines were not the most successful. The medium-lean genetics actually fared better. That's because the high-lean lines encountered a growth lag after 250 pounds. As expected, the low-lean genetic lines were unprofitable at higher weights.
The findings are not a recommendation to market hogs at higher weights, according to McKissick.
For one thing, you don't have the luxury of running your operation in the same manner as the tests. In every pen, one-third of the pigs were killed at 250 pounds, providing increased space for the rest of the pigs from that point on. McKissick admits this could have given the pigs a growth boost. Regardless, there are pig flow, space and time requirements that would make this process unpractical on the farm.
"You have a very clear treatment effect, making the data biased," says Mike Brumm, University of Nebraska extension swine specialist. "When you remove one-third of the pigs, you create quite a space difference, and to say the test results are reflective of all pigs taken to 290 pounds probably is not correct."
For example, if you start with 15 pigs per pen and 120 square feet, the first group would have 8 square feet of space per pig. If you take five pigs out at 250 pounds, the space per pig jumps to 12 feet. In the final stage the space jumps to 24 feet per pig.
Brumm points to a previous study that showed 9 square feet per pig is all that's needed to go to 300 pounds. Gain, feed intake, gain-to-feed and backfat performance topped out at 9 to 11 square feet.
The decision to push pigs to heavier weights is more complicated than whether you can gain a couple more dollars, says Brumm. Adding 12 pounds of live weight will require another week in finishing facilities – and that's not good for pig flows.
"You either need to design in the flexibility to take pigs to higher weights or you need to consider end weights when you design the system and select genetics," says McKissick. "If you are able to make those decisions far enough in advance, or if you have the flexibility to compensate for times when fewer pigs are going through the system, then you may be able to take pigs to higher weights."
The return from the pigs must cover costs of the extra space, interest on the money and feed costs, says Brumm.
McKissick agrees, there is a fixed cost associated with taking the pigs to higher weights, not just the added feed costs and these added costs were considered in the economic study.
Then there are the market factors. From a holistic perspective, do you want to add more pork to the market? Certainly that's an issue to wrestle with, especially now.
Always a consideration is your packer's matrix. In the QLGM study, most genetic lines were not profitable over all packer matrixes – the study took an average of 10 packer matrixes, as well as each individually.
"There were unique differences by packer," says McKissick. "In some packer programs none of the genetic lines were profitable at 290 pounds, yet in two other packer programs almost all of the genetic lines would have offered a return at higher weights."
In most packer matrixes the sort loss for lightweight pigs is more extreme than for heavy weights – and that has driven up hog weights.
For example, there are genetic lines that produce less than 1.1 inches of backfat on a 330-pound hog. Five years ago, that was the average on a 240-pound hog.
So how do you know whether heavier weights are right for your hogs?
Ron Bates, Michigan State University, offers a rule of thumb: If your Fat-Free-Lean Index (based on the industry's old equation, not the 1999 version) drops by 1 percent or less, your feed costs are less than 6 cents, and your packer docks you $1 or less, then you can push the weight factor.
Of course, you'll have to determine whether your herd's genetics even allow you to consider heavier market weights. The most straightforward way to determine this is to scan loineye and backfat at five or six different weights as the pigs grow, says Bates.
"This gives you an idea of how average daily gain, lean percentage, fat and protein gain are changing over time," says Bates. He admits this is an expensive process, but if you do it once or twice, you can use the data to guide you for a couple of years. Also, improved diet formulation often will return more than the scanning costs.
McKissick says only half of the lines offered any kind of return to 290 pounds.
He further emphasizes that the QLGM study only looked at the return of taking pigs from 250 pounds to 290 pounds. It did not look at the overall profitability.
Brumm is not criticizing the study's results, but he says the data set has no way to estimate barn densities and management systems, because of the amount of space per pig.
"I am troubled by the pig performance data being used in models, because of how the QLGM study was designed," says Brumm. "I'm not sure it's an accurate representation of how pigs perform at higher weights under today's production scenarios."
Crunching the Numbers on Heavy Weights
The Quality Lean Growth Modeling study showed that there are certain scenarios when hogs may be taken to 290 pounds with a positive return. That is provided you have the genetics to push the weight limit. All of the scenarios presented here are for hogs with a 290-pound live weight. High feed cost equals $2.50/bushel corn and $250/ton soybean meal, medium is $2.00/bushel corn and $200/ton meal and low is $1.50/bushel corn, $150/ton meal. The table provides some clues, but you'll have to push the pencil for your own herd.
|FEED COST||GENETIC LINE||LIVE HOG MARKET PRICE|
Source: John McKissick, University of Georgia