7 May 1999

Check your pig costs

Want to know how you could

improve returns from your

pig unit? Visit the farmers

weekly/FWi/Andersons cost

control clinic at the

Pig and Poultry Fair.

Emma Penny reports

FEW pig producers can have come through the last year financially unscathed. Many were forced to take emergency action to help stem losses, while some decided to quit production altogether.

However, a substantial number of producers have weathered the worst of the storm. Now, with the MLC predicting prices should return to the 90p/kg deadweight break-even price by July, its time to re-assess businesses to help profit from better prices and clear debts incurred.

Jamie Gwatkin, partner of Andersons, and its pig specialist, is convinced that questioning business structure, performance and efficiency is vital.

Know costs

"Every farm needs to know its cost of production to work out a break-even cost. We need to know that were as competitive as we can be – especially compared with pig producers in the rest of the EU."

Working out costs of production can appear tricky and time-consuming, as well as throwing up uncertainty about the best way forward.

But thats what the farmers weekly, FWi and Andersons cost clinic at the Pig and Poultry Fair aims to do.

If youd like free advice on how competitive your business is, and where it should be going next, fill in the coupon on this page and take it along to the Fair. Mr Gwatkin will be there on both days on the farmers weekly/FWi/ Andersons stand – number 176 in the combined area.

More detailed tables – including ones for weaner producers and finishers – are available on FWi (www.fwi.co.uk). Tables can be accessed through the free market price area under the farm management heading. Fill in the details, print it out and take it along to the fair for some free advice – or simply just turn up.

Besides considering overall business performance, individual costs can be compared with benchmark figures for similar units, he says.

This means you should know whether and by how much your costs are out of kilter compared with your neighbours, the rest of the UK industry and European competitors.

However, given the length and depth of the crisis, he acknowledges that some producers may be less than keen to work out production costs.

Right way forward

"But even where youre less competitive, some news is better than none. At least youll be able to identify the right way forward for your business and can then take action.

"Also, it means your business will be better prepared to profit when prices improve, as well as allowing you to service debts more easily."

Figures for the tables should be easily found in pig costing plans and either your financial accounts or cashbook. On a unit with mixed enterprises, costs should be apportioned to each enterprise, he adds.n

Cost of production calculator (breeding to finishing)


OUTPUT

Breeding

Sows (no) ………………..

Weaners reared a sow a year ………………..

Growing

Weaners (no) ………………..

Start weight (kg) ………………..

Finish weight (kg) ………………..

Mortality (%) ………………..

Finishing

Finishers (no) ………………..

Start weight (kg) ………………..

Finish weight (kg) ………………..

Mortality (%) ………………..

Killing out (%) ………………..

Total production (kg DW a year) ………………..

Cull sales

Number ………………..

Price (£ an animal) ………………..

Total cull value (£ a year) ………………..

Replacement purchases

Sows (no) ………………..

Sow price (£ a sow) ………………..

Boars (no) ………………..

Boar price (£ a boar) ………………..

Total replacement value (£ a year) ………………..

VARIABLE COSTS

Feed

Conc a sow a year (tonnes a year) ………………..

Sow conc price (£/t) ………………..

Weaner FCE ………………..

Weaner conc price (£/t) ………………..

Finisher FCE ………………..

Finisher conc price (£/t) ………………..

Total feed (£ a year) ………………..

Straw & bedding

Straw & bedding (£ a sow a year) ………………..

Straw & bedding (£ a year) ………………..

Vet & med

Vet & med (£ a sow a year) ………………..

Vet & med (£ a year) ………………..

Sundries

Sundries (£ a sow a year) ………………..

Sundries (£ a year) ………………..

Contract

Contract (£ a sow a year) ………………..

Contract (£ a year) ………………..


FIXED COSTS

Labour

Management (£ a year) ………………..

Regular (£ a year) ………………..

Casual (£ a year) ………………..

Total labour (£ a year) ………………..

Power & machinery

Hire (£ a year) ………………..

Leasing (£ a year) ………………..

Machinery repairs (£ a year) ………………..

Fuel and oil (£ a year) ………………..

Vehicle tax & insurance (£ a year) ………………..

Electric (£ a year) ………………..

Gas (£ a year) ………………..

Depreciation (£ a year) ………………..

Total power & machinery (£ a year) ………………..

Other overheads

Water (£ a year) ………………..

Office & phone (£ a year) ………………..

General insurance (£ a year) ………………..

Professional fees (£ a year) ………………..

Miscellaneous (£ a year) ………………..

Total other (£ a year) ………………..

Property

Property depreciation (£ a year) ………………..

Rates (£ a year) ………………..

Property repairs (£ a year) ………………..

Council tax (£ a year) ………………..

Total property (£ a year) ………………..

Rent & finance

Rent (£ a year) ………………..

Loan interest (£ a year) ………………..

HP interest (£ a year) ………………..

Overdraft interest (£ a year) ………………..

Bank charges (£ a year) ………………..

Total rent & finance (£ a year) ………………..

CAPITAL ADJUSTMENTS

Depreciation (£ a year) ………………..

Machinery purchases (£ a year) ………………..

Machinery sales (£ a year) ………………..

Loss repayments (£ a year) ………………..

Capital introduced (£ a year) ………………..

Private drawings (£ a year) ………………..

Tax (£ a year) ………………..

Fill in the gaps and take this table to the Pig and Poultry Fair at Stoneleigh, Warks on May 12 and 13 for free advice on cost control and developing your pig business.