Brumm Speaks Out: Break out from 'average'

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

At Pork Expo earlier this month I sat in on the annual user group presentation on cost of production comparisons compiled for clients of Latta, Harris, Hanon & Penningroth, a CPA firm headquartered in Tipton, Iowa. John McNutt did most of the presenting and interpretation of the data. Since this is a confidential peer group I can’t give you the exact costs cited by John, but I can share with you some of the more interesting trends.

I think the biggest take home message of the day is that the best production units/systems are distancing themselves from even the ‘average’ producer. One of the basic economic principles is that to succeed long term you need to have a profit level at or above the average of all producers. Stated another way, if your cost of production is much above the group average, unless you have a market price advantage of some sort your long term survival is in danger.

John’s message – average is no longer good enough. The ‘average’ producer continues to lose ground compared to the top 10% of producers in terms of breakeven costs. By their estimates, the cost produce pork varies $7.35/cwt gain between the ‘average’ US producer and top 10% of producers. This is almost $20/pig at today’s heavier sales weights.

Read more...


Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


MAXX-TRAX Steerable Manure Tankers

With the MAXX-TRAC high speed steering system and impressive off-road maneuverability, getting to the fi eld is safer and faster than ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Generate Leads