February 24, 2004

 

 

Feed Efficiency Key To Profits in US Swine Industry

 

Feed efficiency is key to profits in local swine industry this year, swine experts told farmers attending the 2004 Iowa Pork Regional Conference, United States.

 

Livestock economists expect hog prices to mirror 2003, with small summer profits devoured during the remainder of the year.

 

John Lawrence, a livestock economist with Iowa State University Extension, predicts prices averaging in the low to mid-$40s per hundredweight in the summer and low to mid-$30s during the first quarter. He says the figure will be in the high $30s the rest of the year.

 

High feed costs and overproduction will make it difficult to keep red ink out of the books for most producers. By taking steps to lower feed costs and minimize waste, farmers could save thousands of dollars during the marketing year. That could be the difference between making a profit or taking a loss.

 

"Precision is where we're going. ... Tailoring specific diets to particular pigs and farms," said Jerry Shurson, a livestock nutritionist and management specialist from the University of Minnesota. "The goal is to reduce feed cost per ton."

 

Feed accounts for the majority of the cost of production, and 75 percent of the feed is fed during the finishing portion of a pig's life. Concentrating on saving money from the time hogs reach 30 pounds until market, Shurson said, will have the most impact on the bottom line.

 

Feed costs have jumped about 30 percent in the last six months, mirroring increases in corn and soybean meal, the two main ingredients in hog feed. Hog prices, however, are expected to remain stagnant.

 

By fine-tuning rations, finding feed alternatives and eliminating waste, farmers can soften the blow or even come out ahead. ISU Extension swine specialist Mark Storlie, who serves most of Northeast Iowa, said he's received numerous calls on the subject from cash-strapped farmers.

 

"Last year was tougher than perceived, and now there's higher feed costs. Some are equity-challenged to the point of bankruptcy," Storlie said.

 

Substituting 10 to 20 percent of corn and soybean meal with cheaper distillers grains could save 70 cents to $1 per pig. Or substituting with a 5 percent mixture of meat meal could save $6 per ton of feed, or $2 per pig.

 

It takes about one ton of feed to finish three, 50-pound hogs. If a farmer finishes several thousand head a year, the savings add up.

 

Shurson said studies show adjusting feed rations several times during the finishing cycle also saves money. Nutritional requirements change as they grow, allowing for better and more efficient feed use. He said it costs $42.50 on average to finish one pig using two diet phases and $40.50 changing six times.

 

"Managing the feed budget is a challenge. They change from summer to winter," Shurson said.

 

Feed ending up in the pit instead of a hog's stomach also can be costly. Shurson said a feeder should match the hogs it services. Equipment adjusted too loosely will promote loss, while feeders adjusted too tightly will hamper growth.

 

Feeders should be adjusted at least three times a week, he said. About 70 percent of the bottom of the feed pan should be visible at all times.

 

Economic losses for finishers could be 76 cents per head if pigs waste just 2 percent of their feed. The loss would be $3.83 at 10 percent and $7.66 at 20 percent. Those numbers, however, were calculated with a feed cost of $128 per ton, which is below current costs.

 

"I've seen farms waste 20 percent. That adds up really fast," Shurson said. "Checking is pretty important."