National Hog Farmer is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Cost-Saving Strategies to Counteract Rising Production Costs

Article-Cost-Saving Strategies to Counteract Rising Production Costs

As production costs climb higher, pork producers need to closely evaluate all phases of production to ensure they are achieving optimum efficiency throughout their operations

As production costs climb higher, pork producers need to closely evaluate all phases of production to ensure they are achieving optimum efficiency throughout their operations.

It is expected that hog prices will average about $60/cwt., live, during the year, about 7% higher than the average return for 2010, reports Mark Whitney, swine nutritionist and Extension educator for the University of Minnesota at Mankato.

However, production costs will likely run near $60/cwt. as well, with corn prices at $6.50-$7.00/bu. — a whopping 85% higher than the average corn price in 2010.

Instead of $10/head profit received on average in 2010, pork producers are facing a breakeven year or even a slight loss in 2011, Whitney said in a talk at the Minnesota Pork Congress in Minneapolis last month.

He outlined five key areas producers should focus on to optimize performance and lower production costs.

Genetic merit: Understand that genetics drives potential, whether it be growth or reproduction performance. As genetics drives production higher, production costs follow. Maximizing lean accretion or growth per day is the goal. Lean tissue is 65-75% water compared to fatty tissue, which is about 10% water. “It’s a lot more efficient to put on water weight than it is to put on fatty weight. Producers can really pick up some efficiency and improved value by improving lean growth vs. more fatty type growth, since it takes much less feed to put on lean gain,” Whitney says. For producers to improve and maximize lean growth, they need to maximize heterosis as much as possible, plus match genetics to the best possible environment, he notes.

Animal health: Sub­clinical disease, such as ileitis or intestinal problems, can be a big drain that goes unrecognized if not tracked by good records to monitor growth rates.

Sick pigs eat less and a greater proportion of those nutrients go for maintenance rather than for growth, thus reducing feed efficiency.

“When an animal has a subclinical disease, you may not be able to observe signs of disease, but understand that the immune system of that pig is being activated — and that activation takes energy and nutrients away from productivity,” Whitney explains.

A study from North Carolina State University a few years ago highlighted that immune activation in response to disease pressure decreases feed intake and has a pronounced impact on feed conversion and growth performance, also resulting in increased fat deposition, he adds.

Disease prevention becomes of paramount importance. Renew biosecurity efforts to control pests, birds, and people traffic, and practice all-in, all-out pig flow.

Lower pig stress by maintaining diets, a good environment and following proper animal handling techniques.

“Make sure your pig health plan is up to date, and that you are using the appropriate animal health products for your herd,” he stresses.

Establish and enforce a good euthanasia program. Producers naturally want to provide proper care for their animals and to avoid euthanizing pigs. But it is important that they recognize and euthanize those animals that will never fully recover.

Realize that poor-doing pigs eat an inordinate amount of feed, are very inefficient, add extra treatment costs, and harbor some diseases that can keep subclinical levels of disease within your herd, Whitney says.

Closely observe pigs for disease, catch those not feeling well and provide fast and accurate treatment.

Feeding program: Measure the lean growth of your pigs to assess their true nutritional needs. This can be done using market weights to estimate the amount of body protein. An easier way is to use the new National Swine Nutrition Guide, which has software to estimate nutrients and growth rate. The guide can be ordered from the U.S. Pork Center of Excellence at

“We need to measure actual performance on the farm to see if we are correctly meeting the needs of the pigs and not overfeeding or underfeeding nutrients,” Whitney says.

Phase feeding is a tool producers should use to minimize overfeeding of nutrients, while providing a margin of safety to account for some variability in the pigs’ needs.

Surprisingly, a lot of producers aren’t practicing split-sex feeding, ignoring the significant difference in growth performance between barrows and gilts. Barrows eat more and gain weight quicker, while gilts gain weight more efficiently. “Particularly in times when margins are tight, split-sex feeding is an opportunity to capture some extra value by having two separate feed lines, one for barrows and one for gilts,” he says.

Periodically check feed budgets to see that what is marked down on paper matches what is going on in the barns in terms of pig diets and growth rates.

With high-priced corn as the main feeding ingredient, alternative feed ingredients should be considered. The digestibility of alternatives vary, so be sure you are offering proper digestible nutrient levels by using correct formulation techniques, Whitney emphasizes. The consistency of supply and price of the alternative ingredient are key considerations.

Distiller’s dried grains with solubles (DDGS) have proven to be an economical substitute for corn. But mycotoxins can be a concern. Mycotoxin-contaminated corn processed for ethanol contains three times the level of mycotoxins of regular corn when fed as DDGS, he warns. Flowability and handling of DDGS in feed systems are also issues when feeding higher concentrations.

At 30-40% DDGS, carcass quality and decreased performance are issues that must be addressed.

Preliminary research at the University of Minnesota indicates that the use of DDGS in sow diets might also produce an improvement in litter size in the second and third parities, Whitney says.

At current prices of $180/ton for DDGS, a 20% inclusion rate of DDGS offers a savings of $15/ton in feed costs over the use of corn in grow-finish diets with minimal or no affects on performance or carcass quality, he estimates.

Growth promotants should be considered, as they generally return 5-10% in improved growth rate.

A number of alternative products including prebiotics, botanicals, direct-fed microbials, etc. are also available that may provide substantial returns, but more research is needed to assess the consistency of those responses, he says.

Ractopamine (Paylean from Elanco Animal Health) provides a robust improvement of 10-15% in feed conversion and lean growth when fed 4.5 g/ton the last four weeks of finishing, he notes.

Evaluate particle size and consider dropping it from the standard 650-750 microns. Decide at what level it produces the most improvement in feed conversion rate without negatively impacting health — the primary concern is gastric ulcers. Pelleting feed may also make economic sense when feed costs are high.

Keep feeders properly adjusted and check frequently to ensure they stay adjusted. In general, about half of the feeder trough space should be covered by feed for growing pigs starting out. Reduce that to about a third of the feed trough covered with feed as pigs continue to grow.

If mixing your own feed, consider purchasing feed ingredients in volume. Buying some extra feed bins to store extra ingredients or sharing bins with another producer to decrease input costs may make sense.

Environment: Monitor barn ventilation settings to ensure efficient removal of moisture and noxious gases.

Consider reducing night-time temperatures when pigs are less active and tend to lie close together to conserve body heat. Recent work at the University of Minnesota, University of Nebraska and University of Missouri has shown dropping night-time temperatures in nursery barns by 10° F. resulted in a 17% reduction in heating fuel use and a 9% reduction in use of electricity.

In an experiment funded by the Minnesota Pork Board, the University of Minnesota is investigating a 15-degree drop to measure the impact on pig performance, fuel use and pig behavior. Results will be available this fall.

Marketing: Evaluate the most cost-effective weight to sell your hogs based on your packer’s grid and the cost vs. return in revenue of heavier weights. With cheap corn, it makes sense to shoot for the top of the packer grid, but that position needs to be reviewed in these times of high feed costs, Whitney says.

Feed withdrawal 12 hours prior to marketing saves feed, facilitates loading pigs onto the truck, improves pork safety and processing due to less stress when the belly is empty, and appears to improve pork quality, he says.