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A Fourfold Approach To Better Swine Management

by 5m Editor
15 May 2006, at 12:00am

By Alberta Pork. Pork producers have gained a reputation for being innovators in technology, environmental stewardship and other factors that have improved individual farms and advanced the industry as a whole.

Alberta Pork

Working under the ever-volatile demands of the market, regulatory agencies and the environmental lobby, pork producers have learned to think on their feet to respond to challenges. In the middle of all this value-adding, however, there’s a possibility some producers are overlooking smaller and less expensive solutions such as financial reporting, better cost management and a variety of efficiencies that can put more money in their pockets.

That’s the opinion of Dr. Neil Shantz, a veterinarian from Warman, Saskatchewan. A 25-year veteran of the pork industry, Shantz has worked with many production units, helping producers make important animal health and financial decisions. Shantz’s work in the swine management field has taken him all over the globe and gained him a great deal of industry recognition. He was named Swine Practitioner of the Year by the American Association of Swine Practitioners in 1997 and awarded the PigChamp Swine Practitioner Award in 1999.

A human approach

Shantz focuses on four cornerstones of profitable swine management: production efficiencies, cost management, revenue enhancement and financial reporting. To varying degrees, all four of these hinge on a new, industry-wide approach to human resource management. “If you didn’t have the people you have working with you, you wouldn’t be in the situation you are today in terms of success or failure,” he says.

No. 1: Production efficiencies

Production efficiencies consist of four primary areas, says Shantz: facility throughput, breeding herd efficiency, growing herd efficiency and marketing. Facility throughput. Although there are a number of benchmarks that can be used to measure production efficiency, Shantz warns against relying too much on any one benchmark.

He uses an example to illustrate the risks of relying too much on a single benchmark — in this case, pigs weaned per crate per year. “Say you have a 3,000- sow barn. The manager is told to produce 150 pigs per crate per year. He says ‘No problem.’ He knows he’s just going to wean 10-day old pigs. But what a disaster he creates as he rolls those 10-day old pigs down into the nursery and the grow-finisher.”

Another difficult measuring tool, says Shantz, is kilograms of live pork gain per square foot of barn space. This measurement relies to a great extent on the facility — percentage of partial and fully slatted floors, for example. “All of these benchmarks have incredible pitfalls you need to be aware of,” he says. “Ultimately, facilities and animals never lie — they’ll tell you what the throughput is.”

One story many production units are telling, says Shantz, is one of high stock density. As animal care becomes part of the Canadian Quality Assurance (CQA) audit, Shantz says some producers need to be prepared to make changes in the square footage they allow for each animal. “There are pigs living in pretty close quarters in many barns. We may have to take a different approach because the stocking density that has become normal in our minds will not be allowed in the future.”

Breeding herd efficiency. Measuring breeding herd efficiency is a delicate balance, says Shantz. Because it requires a high degree of observation, it is also very human resource intensive, further driving the need for good management practices. “Pigs weaned per inventory female per year is quite different from pigs weaned per mated female per year and it’s that open gilt inventory that makes the difference,” he says. “The pre-weaning birth/mortality affects those pigs weaned per mated female, and guess what? It’s a very human resources sensitive result.”

One of the biggest issues in breeding herd efficiency is meeting the challenges of new genetic capabilities. “We are now seeing 13 born alive per litter on average in some units and farrowing room practices such as sow feeding, fostering practices and artificial rearing that are still focused on 10 or 11 born alive. Over the past year and a half we’ve been looking at the true genetic potential of these females; if they give us 13 pigs every time, we need to learn how to rear those pigs in the most natural way we can.”

Growing herd efficiency. Although not as human resource intensive as breeding herd efficiencies, Shantz says growing herd efficiency is “where the money’s being made.” These efficiencies are measured in pigs marketed per sow per year and market hog equivalents, with feed conversion, average daily gain and mortality acting as benchmarks. An issue in this category is the challenge farrowto- finish operations have in balancing weekly production levels between breeding and growing herds. “You’re often left with a breeding herd that’s much more productive than the growing herd facilities can handle,” he says. In these cases, Shantz recommends cutting back on the size of the breeding herd to match the growing herd capacity.

Marketing. Although it’s not a financial term, Shantz says market hog equivalents is a good benchmark to determine how products such as isoweans, feeder pigs, quality marketing pigs and others can come together to create a production efficiency. And with more processors becoming specialized in the kinds of animals they’re buying, Shantz says this presents opportunities for producers to become specialized as well.

Marketing on equivalents can also help producers make good infrastructure decisions. “When you’re building a new barn, why would you build a 400-sow barn that is always going to be short 20 or 30 pigs per week on a semi-load of pigs and drive freight costs up automatically? You need to think in terms of what will get you a semi-load of pigs per week.”

Quality marketing continues to present a challenge. Although many producers have gone to automated sorters and larger groups, Shantz says some producers are saying that the performance in the large groups is not what they originally expected. “Having said that, we know those large groups are very efficient where it comes to using automated sorting to create quality loads of market hogs. We’ll have to strike a balance somehow.”

No. 2: Revenue enhancement

Supply contracts, disciplined marketing procedures, quality marketing, breeding stock sales and integrated marketing are all tools of revenue enhancement, says Shantz. “Supply contracts create stability, and you need that stability,” he says. The marketing of premium health quality is also a popular method of revenue enhancement. However, Shantz urges caution in how much the industry should embrace it.

“There are biology and disease issues that happen in barns that are reflected in measurements like chest adhesions or arthritis that the producer or even the veterinarian cannot always resolve overnight,” says Shantz. “We need to be careful how much we drive premium health quality and how much those premiums become a factor in day-to-day marketing.”

No. 3: Financial reporting

Financial reporting is often the cornerstone producers have the most difficulty with, says Shantz. But by not doing it, producers deprive themselves of an extremely valuable resource for good financial decisionmaking. “Businesses often do financial reporting for the wrong reasons. The primary goal of financial reporting should be to enable financial decisions and provide a base for ongoing management. There’s tremendous opportunity to capture profits through financial reporting.”

Producers should do their own financial reporting, he says. “Nobody else knows your business better than you do, yet so often we default to the accountant or the office manager to set up financials and then we’re surprised when things don’t make sense.”

No. 4: Cost management

Effective cost management comes down to budgeting, buying competitively and making informed and timely purchasing decisions. “Often the person making the decision to purchase isn’t the person paying the bills,” says Shantz. “A budget can help create an understanding between the owner and the purchaser as to how competitive to be when buying inputs.” When it comes to building and buying fixed assets competitively, Shantz emphasizes the need for owners and operators to make the decisions — not bankers. “The phrase I’ve shuddered at so much over the past 25 years is ‘The banker said I could do it; he says I have the equity.’

“That is absolutely the wrong base for a decision. You have to go through the project yourself, know the details and know at the end of the day that you are going to be a competitive producer.” Forming a relationship with vendors can also pay dividends over time. “The more you know about the vendor you are working with, the more successful you will be at applying cost management to your business.” Not buying more vaccine or health supplies than required can result in substantial savings. This calls for working with the veterinarian to figure out how much producers need to use over a given period. Although there are circumstances that call for more health supplies, Shantz says this is no excuse for buying too much. “You know how much product you need and you simply have to become disciplined about buying it.”

Source: Alberta Pork

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The impact of mycotoxins — through losses in commodity quality and livestock health — exceeds $1.4 billion in the United States alone, according to the Council for Agricultural Science and Technology. This guide includes:

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