View Past Decisions with Fresh Eyes
By Lee Whittington
With positive margins predicted for the next two years, it’s time to revisit some of those short-term decisions made in haste to cut costs over the past few years.
We are going to take a walk through the barn with a new, fresh set of eyes. Our eyes and habits are focused, blinded to what has become a daily routine of accepting we are in ‘survival mode’ which translates into – “no money to fix that”. Today is different. I am accompanied by a new employee, she is a rare find. No pig experience, but has significant animal background; she has tried a few careers and, as a mature individual, has developed an interest in reconnecting with livestock. She isn’t shy and has a quick wit. ‘Why’ is her favorite word. So the day begins. The following is what we ‘saw’ through ‘fresh eyes’. Where possible I have punctuated our tour with the facts garnered from research and experience in an attempt to address her staccato of ‘Whys’.
In less than 2 hours we had accumulated a list of items needing attention and I realized that what we were seeing was a culmination of 5 years of mostly negative margins and its effect on staffing compliment and band aid equipment repairs. By the time lunch came I was seriously wondering if all those short-term savings (saving cash), were really the best way to optimize farm output profitably. But that comes later, I want to share some of the highlights of our barn tour with you in hopes you can capitalize on our experience and avoid short-term thinking that leads to long-term costly errors.
We started in the grow-finish barn, as management author Steven Covey recommends “begin with the end in mind”. The farrow-to-finish farm allows the new employee to see why we do what we do. Here you can talk about carcass, meat quality and how the right pig is marketed each week. “Why 120kg at shipping.” I launch into margin over feed cost and packer grids and it occurs to me that we have not revisited optimum shipping weight. In 2013 finishing diets were $288/T, this year $182/T or 37% less. Although we are very pleased with our positive $30+/hog net income it could be better. This was the first of many examples where the work that went into identifying the right marketing weight/packer grid combination for our barn was a priority during a high feed pricing period, but because we are short of time we hadn’t adjusted this since feed prices fell significantly last fall.
This area of the barn provided lots of places to inject ‘Why’. Such as the two nipples that were stuck partially open and dripping. This led to a close inspection of one room where we went pen by pen, she commented “that seems like a very awkward angle to drink”. Indeed the nipples were at a variety of heights throughout the room. Water waste from a nipple drinker could be 40% of water disappearance when the drinkers are never raised (ideally adjust to 2.5 cm above pig shoulder). Well-managed nipple drinkers can reduce water waste to the same level as bowl drinkers. $.31/pig
We talked about research that spoke directly to nipple height adjustment and how research showed it did not affect feed and water intake in either growers or finishers. The flow rate of nipple drinkers did not change feed intake either or the ratio of water to feed intake. Water wastage was increased by about 7% at the higher flow rate (>700ml/min) in both grower and finisher pigs. $.45/pig
I was sharing my experience that about 10% of feeders are typically not working at any one time with empty bins, broken lines and simply plugged being the most common causes and all preventable. Some people had even switched back to old style dry feeders because they thought the wet/dry feeder was plugging too often. A good example of short-term problem fixing but… and yes we found a few feeders plugged and we speculated at the effect that would have on growth with each extra day in the barn costing $0.25/day per pig in fixed costs.
If 10% of the pigs we produce each year were not getting feed that means 1500 pigs on an annual basis or $375 per day (assuming a simple $0.25/day charge foreasy barn figuring). How many days did this occur each year? I didn’t have a good answer because it should never happen and yet typically 10% of the feeders in barns I visit are not delivering feed. We did switch back to those wet/dry feeders because in addition to optimizing feed intake, water disappearance and manure volume are also reduced, and we estimate that saving at $.70/pig based on manure hauling costs alone.
“It seems a little cool in here” she said. “Yes”, I replied. We took a look at the quality of our barn, and high health status of the herd. Based on our veterinarian providing the observation that it is the variation in temperature and humidity that really is hardest on pigs, we decided to turn our set point temperatures down by a degree in face of anticipated natural gas prices. After observing the behavior of the pigs we determined they were comfortable and moved the set point another 1oC lower and we achieved the short-term impact we sought, we have lowered annual heating costs over the past three winters. We were pretty proud of that and pigs are comfortable, no vices and health is stable.
“Do you think it cost you anything in increased feed consumed to keep them warm” a good question, one we had never tested in our short-term pursuit to drive costs down. Now that we have positive margins we need to reassess even those short-term decisions that seemright in an effort to make sure they are providing long-term benefits.
In a couple of months we will be dealing with excess heat, I went on to explain and we have some pretty good information on how to deal with that effectively. Two trials were conducted over two summers to evaluate the impact of a reduced nocturnal temperature strategy on the performance and carcass quality of growing-finishing pigs; we compared the standard room setpoint strategy with a reduced night time temperature of 6°C. The results suggest the reduced temperature setpoint strategy would provide a net return of $1.00/pig sold for pigs raised over the summer period.
We looked at the mash diet in the feeders, mostly barley and a little wheat this week. “Why don’t you feed corn and wheat and make the pigs grow faster?” Under typical market conditions, high energy diets do not necessarily result in
“decisions made for short-term savings may not be in our best long-term interests and need to be reviewed”
the highest return over feed cost. We must frequently evaluate the dietary energy concentrations which maximize net income not just consider growth rate. Reducing energy levels of diets will slightly reduce performance of finishing pigs, however the lower feed costs results in a greater return to the producer. At current prices we could save up to $3.40/pig with this lower energy diet strategy. Our short-term decision to engage a nutritionist to stay on top of these diets is also a good long-term investment since 65-70% of the cost of production is feed. When resources were tight we focused where they would do the most good.
As time was quickly slipping away we took a brisk walk to the gestation barn to describe the heart of our farm, optimizing the reproduction efficiency of sows and gilts. It starts with giving the gilts a special diet and a little more room, as well as more solid flooring to develop feet and legs that would serve the sow well for years to come. Extra space also allowed us to increase selection pressure on these important traits, we took only the best gilts into our breeding herd. We discussed recent research just published on the subject of lameness. This included a 3000 commercial sow barn, 41% were not lame, 53% were mildly lame, and 6% showed moderate to severe lameness. Examining parity differences, between 42 and 59% of sows in parities 0-3, were found to be lame. The number of sows with mild lameness was very high. The majority of these cases may go unnoticed by stockpersons, and contributes to the general underreporting of the problem. This illustrates a significant problem we wanted to avoid, that is early parity sows are showing lameness and may be prematurely lost from the herd due to lameness. Production of non-lame sows is 6% higher compared to lame sows representing a value of $5.00/hog.
Our orientation tour had been very beneficial for me, and I hope the discussion engaged the new employee in the ‘continuous improvement’ mindset that will benefit the farm. It pointed out that decisions made for short-term savings may not be in our best long-term interests and need to be reviewed. We were getting a number of things right, but it was obvious not every part of the operation was optimized. With current feed cost and market outlook we made the commitment to refill a couple of positions to allow our manager time to work on taking the production system to the next profitability level
DR. LEE WHITTINGTON Lee Whittington is President/CEO of Prairie Swine Centre, a non-profit swine research corporation, focused on practical solutions. Prairie Swine Centre is affiliated with the University of Saskatchewan and is located near Saskatoon, SK. Ken Engele is the Manager of information services at the Centre and Dr Bernardo Predicala is the Research Scientist in Engineering.