CommunicationsSeedstock EDGE | “For the Record” | “The Pinnacle” | |
| Seedstock EDGE Seedstock EDGE main | Seedstock EDGE archives Advertising rates/deadlines | Mail dates Subscribe today! | Seedstock EDGE staff |
The Importance of Sow Longevity for Commercial Breed-to-Wean Swine Operations
by Ken Stalder, Extension Swine Specialist, University of Tennessee
During the last several years, the culling rates of breeding females have climbed to levels nearing 50 percent. Increased sow mortality, combined with reproductive problems such as failing to cycle in a timely manner, not conceiving, not farrowing, among others, have led to increased replacement rates in commercial sow units.(Dial and Koketsu, 1996). Occasionally, sows units will have an opportunity to cull females for poor performance, soundness problems, old age, death, etc. (Friendship et al., 1996).
Increased culling, regardless of reason, results in increased replacement rates. High replacement rates result in the need for larger gilt pools, and thus, the purchase or production of more breeding gilts. Higher costs associated with increased gilt purchases or production expenses of home-raised replacement females, a producer will incur further expenses associated with developing and acclimating replacement gilts. There is a disease risk, however small or large, when animals are introduced into the breeding herd. By reducing the number of animals and frequency of introductions, the risk of introducing diseases not currently present in swine operations can also be reduced. Poorer maternal production from gilts, while not a direct out-of-pocket expense, will reduce the gross income of swine operation when compared to the production of more mature sows.
The industry recommends (Muirhead and Alexander, 1997) that the ideal parity distribution of the sow herd include 16.5% to 20% gilts and 15% to 17% second parity sows (Figure 1). Thus 35% to 40% of the sow herd is producing below a mature equivalent level. These distributions will result in the sow herd having an average parity of 3.6 to 3.85. Reducing the percentage of first and second parity females by half (40% to 20%) would result in 42 more pigs sold per hundred sows. In a 600 sow farrow-to-wean operation, this change would realize a gross income increase of over $7500 annually. Additionally, the cash outlay for replacement gilts for a 600-sow operation could be reduced by more than $12,000 annually if replacement rates were improved to 40% from 50%.
Reduced sow longevity or low parity at removal results in fewer litters in which a sow has an opportunity to be sufficiently productive in order for her purchase to be profitable.
We recently conducted a simulated evaluation of a 600-sow breed-to-wean enterprise that had 50% equity in the operation to determine the number of parities a sow must remain in the breeding herd before a positive NPV is reached based on historical feed costs, early weaned pig price, gilt replacement cost, and current herd productivity averages reported by commercial record keeping services. The evaluation utilized a discounted cash flows (Net Present Values) analysis to economically evaluate replacement gilt decisions.
Net Present Value (NPV) analysis is the process of taking a current investment, projecting the future net income (cash flows) from that investment, and discounting these future earnings to present-day value(s) (discounts). Additionally, we evaluated the sensitivity of NPV to production (number of pigs born alive), price received (SEW pig price), and gilt replacement price.
The expected productivity (pigs born alive) of replacement gilts was based on the five-year average production values previously mentioned. The reported number born alive (10.1) and average parity (3.26) of sows that have farrowed (rounded to the nearest whole number) were used as base values. National Swine Improvement Federation parity adjustments were applied to the base values when deriving the number of live pigs that a replacement gilt would produce each parity.
Total revenue per litter was calculated by multiplying the number of standard pigs sold (pigs born alive – pre-weaning mortality – 1% substandard pigs) per litter by the SEW pig price. For the purposes of this study, substandard pigs (substandard due to light weight, blemish, swollen joint, hernia, etc.) were assumed to be of no value. Net income per litter was calculated by subtracting total costs per litter from total revenue per litter.
To evaluate the effects of various production and expense factors on the parity in which a replacement gilt reach a positive NPV, sensitivity analysis was conducted for number of pigs born alive per litter, SEW pig price, and replacement gilt costs. These tables are shown at the bottom of the article. Income per parity was based upon the number of SEW pigs sold. The number of pigs born alive and the average parity of sows that farrowed were used to adjust the base number of pigs born alive per litter (average 10.1 born alive from a 3.26 average parity of sows that farrowed) by the parity in which the pigs are produced according to NSIF number born alive parity adjustments. After parity adjustments were made, the number of pigs sold per litter was calculated by subtracting the mortality that occurs from birth through weaning from the parity-adjusted number born alive value and subtracting one percent of pigs assumed to be substandard.
Given the assumptions outlined a sow reaches a positive NPV at parity three in the model breed-to-wean operation used in this analysis. Review of Tables 1, 2, and 3 as related to the original production and price values assumed in this analysis (10.1 number of pigs born alive, $32 SEW pig price, and $200 replacement gilt cost). The values in the tables are the estimated NPVs for the given parity and production measurement under consideration. For instance in Table 1, a gilt with an average number born alive of 9.10 and remaining in the herd through 3 parities has a negative NPV of $46. This gilt must remain in the herd more than four parities to break even.
Record keeping services have reported that parity of culled sows in all participating commercial swine herds averaged 3.36 in 1996-2000 and the parity of culled sows in the top 10% of herds surveyed averaged 4.85. Based on this analysis, the average sow in an average breed-to-wean commercial swine operation just reaches a positive NPV before she exits the herd. This suggests that considerable profit potential is never attained because the sow does not remain in the breeding herd in later parities. Parities three through six are generally considered the peak producing parities and the time when lifetime production has the potential to exceed that needed to pay for the replacement gilts’ investment. Sows that exit the herd after the first or second parity are unprofitable investments for the majority of the production and price levels shown in the sensitivity analyses.
The factors affecting the parity at which a positive NPV is reached include two that have large effects on producers= income, number of pigs born alive (impacts the number of pigs sold per litter, Table 1) and the SEW pig price (Table 2). The herd average number of pigs born alive would have to decline .5 pigs per litter (5% deviation from assumed value) to change the parity in which a positive NPV is reached from three to four in the example operation. In contrast, the number of pigs born alive would have to increase .5 pigs per litter to reduce the parity in which a positive NPV is reached from three to two if all other assumptions are held constant (Table 1).
When production or SEW pig price changes so does the parity when a positive NPV is reached (Table 2). If SEW pig price declines $2.00 from $32 per head, the base price, and all other assumptions remain constant, the parity at which a positive NPV is attained increases to four from the original three (Table 2). The two dollar price decline is a decrease of 6.25 percent. Similarly, if SEW pig price improves by the same two dollar margin, the parity in which a positive NPV is reached is reduced to just two (Table 2). These results show that relatively small changes in market price can have considerable impact on the profitability of investing in a replacement female. Some early weaned pig production contracts provide discounts for weight, blemishes, etc. and incentives for pigs per sow per year, sow mortality, etc. Decreasing the percentage of pigs that are discounted can substantially improve yearly producer returns and change the parity where positive NPV is attained.
Replacement gilt price ($150 to $275 evaluated in this study) has relatively less influence on the length of service she must provide to reach a positive NPV (Table 3) in a breed-to-wean operation when compared to previous discussed variables. Gilt replacement price must increase $50.00 (a 25% increase from the assumed $200 cost) to change the parity in which a positive NPV is reached from three to four. In contrast, if all other factors remain constant, gilt price would need to be reduced by over 12.5% (over a $25 decrease) from the original $200 to reduce the parity where positive NPV is attained from three to two. This analysis indicates that NPV is less sensitive to changes in gilt replacement purchase price when compared to average herd number born alive and SEW pig price.
Using current production levels, SEW pig price, production costs, and equity information, individual producers can use these types of analyses to evaluate their herds. If sows are not remaining in the breeding herd for a sufficient length of time to reach a positive NPV, producers must determine the cause of early removal of sows and take corrective action.
References
Dial, G. and Y. Koketsu. 1996. Reproductive failure, Understanding the reasons that sows are culled for infertility: In International Pigletter (J. Deen Ed.) Vol. 16 pp. 15-16. Pig World, Inc. Owatonna, MN 55060.
Friendship, R. M., M. R. Wilson, G. W. Almond, I. McMillan, R. R. Hacker, R. Pieper and S. S. Swaminathan. 1996. Sow wastage: Reasons for and effect on productivity. J Vet Res 50:205-208.
Muirhead, M. R. and T. J. L. Alexander. 1997. Managing pig health and the treatment of disease (1st ed.). 5M Enterprises Ltd. Sheffield, United Kingdom.
