Even the best option to boost pig space will shrink return on equity, says a National Pork Board study.
Animal welfare pressure has spurred interest in adding space for confined pigs.
In a new economic analysis of pig density, the best solution was to add finishing barns.
But all solutions increased costs that would need to be passed on to consumers to maintain competitiveness.
Project Objectives
The research team was headed by Brian Buhr, University of Minnesota.
Objectives were to find out current finishing space allocations and determine the economic impact from increasing pen space.
Three-dozen producers, veterinarians, industry consultants and university swine specialists were surveyed. They found finishing pig space averaged 7.19 sq. ft., with 11.57 sq. ft. for hoop systems.
In contrast, Harold Gonyou, Saskatchewan, Prairie Swine Centre reported space greater than 8.73 sq. ft./finishing pig weighing 269 lb. didn't boost average daily gain or feed intake.
Simulations were developed based on altering pig space from 7.19 sq. ft. to 8.73 sq. ft. to maximize average daily gain as an indicator of pig welfare.
Ninety percent of U.S. producers top finishing pens, then sell the remainder of the pigs from a finishing facility within 24.8 days on average, reducing the critical weight for space allocation.
After removing the heaviest pigs in the first marketing cut, pen space/pig increases, thus improving growing conditions for the remaining pigs.
Simulation Model
The simulation model included the entire farrow-to-finish production system to capture potential bottlenecking of pig flows at finishing.
To increase space allowances, producers can maintain the same number of pigs in a system but market some or all of them at lighter weights. Or they can sell pigs at lighter weights to increase the space allocation/pig at the time when finishing pigs are most crowded.
Also, producers can drop stocking rates by either selling excess pigs prior to entering the finisher or scaling back farrowings. Pigs can then be marketed at optimal weights as before the space restrictions.
The team reported that marketing hogs at lighter weights creates major price discounts based on packer buying grids. This marketing strategy also leads to increased costs of sorting and transportation.
Stocking fewer finishing pigs complicates production and flows in farrowing and nursery.
The authors analyzed two alternatives for stocking fewer pigs:
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Reducing the breeding herd and therefore, the number of pigs weaned/year, and
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Selling weaned pigs while retaining the same level of finishing space.
Best Way to Add Space
The best economic alternative is adding finishing barns to hold the same number of pigs with extra space. The researchers suggested this option makes some intuitive sense. Rather than incurring additional costs for every pig entering the system, the added finishing barns represent a one-time capital cost amortized over the life of the additional barns.
Whatever strategy is used will reduce return on equity by 10% to 97%.
Therefore, adoption of space restrictions should be carefully considered in concert with potential economic benefits such as consumer willingness to pay for pigs raised in facilities with greater space allocations.
