Operating costs: These costs would include but are not limited to LP, electricity, supplies, repairs, taxes and insurance. FINBIN data shows that wean-to-finish operating costs have risen by 24.5% over the past five years. The largest increases come from insurance premiums, repair costs and utility costs. A historical "rule of thumb" has been $10-$11 per pig space. However, according to FINBIN data, this figure is closer to $13-$14 per pig space today.

Labor costs: It comes as no surprise that wages and overall compensation costs have increased in recent years. On average, for barn owners who provide most of the labor, hired labor costs amount to around $2 per pig space. For barn owners who hire most of their labor or a pig owner who provides labor in custom barns, costs are typically in the range of $8-$10 per pig space.

Manure value: How you use the manure from your barn can significantly impact the cash flow potential of your investment. Despite the recent decline in commercial N, P and K prices, they have remained consistently high for the past several years. Savings from commercial fertilizer per pig space used to be $4-$6, but now they have risen to $8-$12. This provides a significant advantage to growers with a cropping enterprise that can fully utilize the manure produced from their swine facility. In most cases, a grower may not draw from their barn's cash flow, so the manure value often serves as the owner's "return to labor."

Debt service: It is important for your barn investment to have a manageable amount of debt that allows for monthly cash flow. This figure depends on the size, term and interest rate of the loan associated with the barn. In my opinion, the best way to determine a sustainable debt service for a barn is to subtract your operating and labor costs from your revenue per space. The remaining amount represents the maximum debt that the barn can cash flow. The end goal is to have a positive margin to help manage any unforeseen or rising costs over time. Note that this does not include manure value, as it can vary year to year. Manure has various sale agreements and can be considered the owner's "return to labor" depending on the specific situation.