Raising pigs know that accounting science can improve the efficiency of farms

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 rely on basic financial statements—like income statements—to understand their monthly or annual results. For example, they might know that this month’s profit was $100,000, with total sales at $1 million and costs at $900,000. However, when asked how exactly that profit was achieved, they often struggle to provide a clear answer. Was it due to a high market price for pigs, lower production costs, or better breeding outcomes? Even more importantly, what percentage of each factor contributed to the profit? Most cannot give a detailed breakdown. As a farmer, it's essential to conduct a scientific analysis of your farm’s economics. Understanding the real causes of profit or loss allows you to make informed decisions and implement practical strategies. This not only improves efficiency but also increases your overall productivity. **Management is Key** Successful pig farming starts with effective management. This includes both managing people and managing the pigs themselves. Good leadership ensures that every aspect of the operation runs smoothly, especially in large-scale farms where coordination is critical. **Environment Matters** The environment plays a crucial role in pig farming. It includes external factors like market conditions, government policies, and the overall industry landscape. On a smaller scale, it also involves the immediate surroundings of the farm—such as biosecurity measures, disease prevention, and environmental compliance. One key indicator is the pig-to-corn ratio, which reflects market profitability. A ratio above 5.5:1 typically means the market is profitable, while below 5.3:1 suggests potential losses. If your farm is still losing money despite favorable market conditions, it may indicate poor management or suboptimal pig performance. **Feed Management** Using scientifically formulated feed is vital for cost-effective pig farming. Most farms use full-price pellets for piglets, while other pigs are fed a mix of premixes or concentrates. Proper nutrition directly affects growth rates, health, and ultimately, profitability. **Breed Selection** Choosing the right breed is crucial for long-term success. The majority of farms today use the Duroc-Landrace-Yorkshire crossbreed. With over 500 farms having 500 sows and slaughtering more than 10,000 pigs annually, this breed has proven its efficiency and adaptability. **Disease Control is Critical** Many farm managers blame disease for poor economic performance, but in reality, most disease issues stem from poor management practices. From farrowing to weaning, improper hygiene, vaccination schedules, and biosecurity measures all contribute to disease outbreaks. The key to effective disease control lies in implementing all-in, all-out systems, proper immunization protocols, and strong biosecurity measures. Shifting from reactive to preventive care is essential for long-term success. **Production Reporting** Improving farm production reports and mastering statistical methods are vital for analyzing economic performance. These reports should not just be for documentation—they should serve as tools for evaluating performance and identifying areas for improvement. **Slaughter Pig Profit Analysis** One useful method is analyzing the average profit per slaughter pig. This approach spreads all farm costs across the slaughtered pigs, including those from sows, boars, and replacement gilts. By focusing on this metric, farmers can gain a clearer picture of overall profitability. **Key Performance Indicator** To assess a farm’s skill level, one key indicator stands out: the number of pigs slaughtered per sow per year. This metric reflects nearly all aspects of production, including breeding rates, farrowing rates, and survival rates. Ultimately, production quality is the most significant factor influencing a farm’s economic efficiency.

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