Improving efficiency and cost of production

The Profit Equation

PROFIT = PRICE – COP ((Feed Price x HFC ) +(Other costs) ) x Volume (pigs sold x weight)

Pig PriceNational Baconer Price

200

210

220

230

240

250

260

270

280

290

300

c/k

g H

SC

W

2002 2003 2004 2005 2006

Profit over 14 years ($/sow) based on APL Pig stats and Pig Annual

Profit

-400

-300

-200

-100

0

100

200

300

400

500

600

700

91/92

92/93

93/94

94/95

95/96

96/97

97/98

98/99

99/00

00/01

2001

/200

2

2002

/200

3

2003

/200

4

2004

/200

5

2005

/200

6

Year

Pro

fit

($/s

ow

)

Profit

Comparative costs (Euro/kg carcass weight)

Country Cost of production (E/kg)

Brazil .99

USA 1.13

Canada 1.16

Poland 1.18

Netherlands 1.30

China 1.35

Australia 1.36

Relative business indicators

Business indicator

USA Canada

Brazil Australia

COP (A$/kg)

1.48 1.55 1.21 2.20

HFC- CW 3.68 3.80 3.75 4.20

Carcass Wt./sow/yr (kg)

1700 1650 1550 1450

Feed ($/tonne)

200 210 220 270

Core program areas1. More reliable and lower cost

energy and protein supply2. Herd feed conversion

efficiency3. Functional pork products4. Education and training

Core Participants

A shared vision…

University of SydneySupporting Participants

Bartlett Grains Pty Ltd

WAAPC – Pork Producers Committee

Grainsearch Pty Ltd

Australasian Pig Science Association

Potential improvement in profit and flexibility

Current TargetsPrice ($/kg) 2.4 2.4

HFC (Carcass) 4.2 3.6

Feed ($/kg) .27 .25

Total feed($/kg) 1.13 .90

Other ($/kg) 0.95 .82

COP ($/kg cwt) 2.08 1.72

Pigs /sow/yr 19 22

Weight (kg) 75 76

Profit/sow ($/yr) 456 1140

HFC Currently averages 4.2 on a

carcass weight basis for Australia (APL Pig Annual 2004).

USA average closer to 3.7 Rather scary when feed costs

27 cents/kg.

Causes? Genetics? Wastage? Poor health ? Low energy diets? Light selling weights? Reproduction Tell me?

Effects of dietary energy -Fat Potential to get added effect on

feed efficiency Reduce total feed delivered Enhance performance in

commercial situations Reduce grain usage Flexibility

Australian Information Results of experiment with boars and

gilts reported by Henman etal in 1999.

Five levels of DE (calculated) ranging from 12.0 to 15.2 MJ/kg.

Animals housed in groups of 10 in commercial-type barn.

Duration of 42 days starting at 63 kg.

Effects of DE on growth rate (g/d) of pigs over 42 days starting at 60 kg.

700

750

800

850

900

950

1000

12 12.8 13.6 14.4 15.2

Mixed sex

Effects of dietary DE (MJ/kg) on carcass weight (kg)

71

72

73

74

75

76

77

78

79

80

81

12 12.8 13.6 14.4 15.2

Mixed sex

Effects of dietary DE on feed: gain

2.20

2.30

2.40

2.50

2.60

2.70

2.80

2.90

3.00

3.10

12 12.8 13.6 14.4 15.2

Mixed sex

Effects of dietary DE on carcass feed: gain

2.20

2.40

2.60

2.80

3.00

3.20

3.40

3.60

12 12.8 13.6 14.4 15.2

Mixed sex

Effects of genetics Comparison of gilts from two

genetic lines. Results from the USA. Pigs compared on the same diets

in the same facility.

The feed:gain of gilts from two genetic lines

Genetics 1 and 2

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

0 50 100 150 200 250 300Weight LB

feed

:gai

n

Growth rate (LB/d) and weight (LB)

Growth artes of gilts from two genetic lines

0.50

0.70

0.90

1.10

1.30

1.50

1.70

1.90

2.10

2.30

2.50

0.00 50.00 100.00 150.00 200.00 250.00 300.00Weight (LB)

Daily

gai

n (L

B)

Effects of genetics available today

Performance(20-100 kg)

Genetics 1 Genetics 2

Feed:gain 2.09 (31.4 MJ DE/kg)

2.51 (37.7 MJ/kg)

Feed (kg/pig) 167 201

Growth rate (g/d) 955 841

Grower feed for 5,000 sow unit (tonne/y)Cost difference ($)

15,030

($795,600)

18,090

Effects of 5ppm Paylean for last 21 days

Control Paylean

Growth rate(g/d)

955 1024

Feed usage (kg/pig)

167 155

MJ/kg gain 31.4 28.1

Improving Feed Efficiency We haven’t begun to get serious about

FE? Potential to dramatically reduce feed

usage if willing to try different approaches.

Need to understand the constraints and some may be inherent in our animals and systems.

An exciting area, I look forward to working on with our partners and Australian producers.