Norfolk unit sets 80p/kg as cost survival target
Norfolk unit sets 80p/kg as cost survival target
One Norfolk pig producer
has already taken steps to
boost herd profitability, and
more action is planned.
Emma Penny reports in a
follow-up from last weeks
article on surviving the crisis
TAKING pigs through to finishing, producing for a niche market and meeting buyers specs, training staff, and cost control have helped achieve a break-even cost of 85p/kg, including all costs, on a 550-sow outdoor unit in Norfolk.
But that is not low enough – the target is 80p/kg, which must be met to help survive the crisis.
James Keith, who owns and contract farms 1100ha (2700 acres) at Swanton Morley Farms, Hoe, East Dereham, began contract finishing pigs 10 years ago, and then started his own outdoor unit. "We had yards we could finish pigs in and plenty of straw. Finishing progeny allowed us to add value to the pigs rather than selling them as weaners."
Before buying breeding stock, contracts were researched carefully. Mr Keith now supplies Dalehead Foods on a green contract, finishing pigs at 93kg liveweight at a P2 probe of under 14mm. Most finishers meet Q spec, he says.
"A premium is paid above the AAPP which roughly offsets costs but does not pay for the restrictions imposed by the contract. But we are supplying a niche market rather than a commodity, as I believe we cant compete with the 20,000-sow units in the USA. At least we are meeting a specific need."
The unit started with 250 sows, but when that rose to 550 – for economies of scale – a local producer who had empty cattle buildings was persuaded to convert them to straw yards for finishing pigs. These are looked after by the producer, who receives rent plus a bonus when prices are good.
According to Andersons partner Jamie Gwatkin, who is business adviser to Mr Keith, that was a sensible move. "The system works well for both parties. No investment was required by Mr Keith, while the other producer is paid rent and an incentive."
The farms pig adviser Geoff Fielding reckons increasing sow numbers to 550 helped the business run more efficiently. "With 250 sows you need a man-and-a-half to look after them; with 550 sows, four staff can manage the unit."
Like all farms, staffing – and ensuring they know what they are doing – has been a concern, despite ensuring rewards are great enough that staff will give 110%.
To ensure staff are motivated and efficient, Mr Keith includes a sum for training as part of each years budget. "This should mean staff should have a better idea of what they are doing and that we get better quality work from them."
Mr Fielding says that good stockmanship is vital. "You cant afford not to train staff. It is also likely to mean they will remain motivated and enthusiastic."
He warns that mistakes by inexperienced or demotivated staff can cost thousands. That has already happened at Hoe Hall, says pig manager, Nick Butler, when a past member of staff led to sows on one of the two units under-performing for six months, costing an estimated £30,000.
Losses were mostly through poor vaccination for enzootic pneumonia. Lack of cover against the disease meant that 100g a day of growth was being lost. "We now monitor growth rates to ensure targets are met and identify any concerns," says Mr Butler.
Splitting the herd according to sex at weaning and keeping those groups until finished also helps maintain growth rates by reducing bullying and stress. It also means gilts and boars can be fed separate diets to meet spec where necessary.
From weaning at 7kg to sale at 93kg lw, Mr Fielding estimates average growth is 670g a day. With an overall feed conversion efficiency of 2.4, and at current compound feed prices, growth should cost 35p/kg lw. "Achieving 35p/kg is good for a unit feeding compound feed. Many units will run at 40p/kg or more and they wont break even."
Performance of the breeding herd is also under scrutiny. Conception rates, at 77-78%, are too low, says Mr Butler. "We have been group serving inside, backed up with AI, but it is the wrong system; disease levels are high and we are sure some boars are not performing."
Now, boars are to be moved to paddocks and individual service backed up by AI. "We will be able to give more attention to serving, and should need fewer boars, as we wont have to carry sweepers. This should help us achieve conception rates of 85-90%."
While the unit has been run as two herds, these have been merged to allow better labour use and help manage service better. Improving conception rates should boost pigs born a sow a year from 22 to 24.
Now units are combined, it is also planned to group sows by body size rather than parity. This should cut bullying and ensure sow feeding is more efficient. Mr Fielding says feed use a sow – at 1.25t a sow a year – is already quite low. "I would not be tempted to reduce levels any more, but usage should improve."
Replacement gilts are also being brought into the herd earlier, at 30kg rather than as 100kg maiden gilts. Mr Butler says this means they are introduced to disease challenge on the unit at an earlier age, and he reckons this is producing an additional pig a gilt at first parity.
Buying replacements is a potential weakness, as it could bring in disease, warns Mr Fielding. But gilts are isolated for eight weeks before joining the herd, while running pure-breds to breed replacements would complicate the system.
Better performance at first parity and improved conception rates are they keys to boosting profitability, says Mr Gwatkin. "Because there are so many cycles in a year, tweaking the system can make a big difference to output. Achieving a break-even cost of 80p/kg should be possible, but the unit must achieve 24 pigs a sow a year to hit that." *
BOOSTING MARGINS
• Better conception rates.
• Staff training.
• Split sex finishing.
• Combine herds.
• Niche market contract.
Achieving a break-even cost of 80p/kg is the target for the 550-sow herd at Swanton Morley Farms, which finishes pigs at 93kg on a green contract.
Discussing options for further improving finisher profitability – (L-R) Jamie Gwatkin, James Keith, Geoff Fielding and unit manager, Nick Butler.