The economic performance of pig farms is a top priority for farm managers. But how can they effectively analyze the financial health of their operations? Many farm leaders often look at financial statements, such as income statements, to understand the basic financial status of the past month or year. For example, they might know that this month’s profit was $100,000, with total sales of $1 million and total costs of $900,000. However, when asked how that profit was achieved—was it due to a high market price, reduced costs, or better production results—they often struggle to provide a clear answer. Even deeper questions, like what percentage of the profit came from each factor, are rarely addressed.
As a farmer, it's essential to conduct a scientific analysis of your farm’s economics in order to identify the real causes of profits or losses. This allows you to make informed decisions and implement practical strategies. Being proactive in this way ensures that your efforts yield better results.
Management is the foundation of successful farming. A true understanding of farm management is crucial, especially for large-scale operations. Management includes not only managing people but also managing the pigs themselves. The environment also plays a key role. This includes both the broader context—such as market conditions, policies, and industry trends—and the immediate surroundings of the farm, particularly disease prevention and environmental protection.
One important market indicator is the pig-to-corn ratio. In the industry, this ratio refers to the price of live pigs compared to the price of corn. A break-even point is around 5.5:1, meaning if the ratio is above 5.5, the market is profitable. If it’s below 5.3:1, it’s typically a loss. However, even in a favorable market, poor management can still lead to losses.
Using scientifically formulated feed is essential for improving efficiency. Most farms use full-price pellets for piglets, while other pigs are fed with about 4% premix or 40% concentrate.
Choosing the right breed is critical. Most farms use a three-way crossbreed, such as the Duroc-Landrace-Yorkshire combination. There are over 500 farms with 500 sows and an annual slaughter of more than 10,000 pigs, and more than 1,200 farms nationwide, with over 90% owned by individual farmers.
Disease control is the lifeline of any pig farm. While many farm managers blame diseases for poor economic performance, the root cause often lies in feeding and management practices. Issues like improper farrowing management, lack of hygiene, inconsistent vaccination schedules, and weak biosecurity measures all contribute to disease outbreaks.
The key to effective disease control is implementing proper management practices such as all-in-all-out systems, strict vaccination protocols, preventive care, and strong biosecurity. It's time to shift from reactive veterinary care to proactive health management.
Improving farm production reports and mastering statistical methods for tracking performance is crucial for analyzing economic outcomes. These reports should not just be for record-keeping, but serve as tools for in-depth analysis.
Analyzing the average profitability per slaughtered pig is a useful method to assess the overall economic performance of the farm. This approach assumes that all farm costs are allocated to the slaughtered pigs, including those related to sows, boars, and replacement gilts.
To evaluate the skill level of a farm, one key metric is the number of pigs slaughtered per sow per year. This single figure reflects most production indicators, such as the number of sows, farrowing rate, litter size, and survival rates. Ultimately, the quality of production is the most significant factor affecting the farm's economic efficiency.
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