Squeezed With feed prices high for at least a year, small improvements can add up impact on performance and profitability
The rapid increase in both cereal and protein prices over the last few months has pushed up the cost of producing a market hog dramatically. The cost of feed per market hog, using Alberta ingredient prices, reached $127 for July and will be higher for August, according to Neil Campbell, with Gowans Feed Consulting.
“That is for a toll-manufactured diet, so people milling feed on farm would be lower and those buying complete feed would be higher,” he says. With relatively high summer hog prices, there is still a reasonable margin for most producers, but producers will be squeezed if, as futures prices suggest, prices are lower after the summer period. “By the end of the year, we could be looking at losses of $20-$25/hog, based on predicted feed and hog prices,” says Campbell.
What should producers do in response to this high feed cost environment? From a feed cost viewpoint, there is no quick fix, Campbell says.
“At the moment, there is no magic bullet. We will have to wait and see what ingredients are available after the harvest is complete and what the price is,” he says. “It could be that there will be some poor-quality canola or lentils available for use in animal feed.”
With a good crop forecast for Western Canada, hog producers will find themselves at an advantage compared to those in the U.S., where the drought has caused the corn price to rocket. The bad news is that buyers of U.S. corn will be looking for other alternatives, which will mean strong demand for western Canadian crops, especially cereals. “I don’t see the price of feed going down a lot, due to this demand,” predicts Campbell. “There are buyers from California looking at buying barley in Alberta and there will be interest from the northwest U.S. and Japan, in addition to Quebec.”
Despite the lack of wiggle room that producers have right now, there are still things that can be done. From a nutritional standpoint, regular reformulation as ingredient availability and prices change is a must. Accurate feed budgeting is essential. In the breeding herd, paying attention to sow body condition and gestation feed levels can shave cost. Sows tend to increase in condition in summer, providing an opportunity to reduce daily feed intake slightly.
Sows entering the farrowing rooms should be condition score 3.0 – 3.5. If there are sows in score 4.0 or more, it is an indication that their feed level has been too high. Ensure that individual condition scoring is carried out at about four and nine weeks into gestation and, most importantly, feed level is adjusted accordingly. Learn how to carry out condition scoring accurately using feel as well as sight, and using a half-point scale from 1 to 5.
Accurate sow feeding and optimum body condition will help to improve longevity. A longer productive life leads to higher average litter performance over the sow’s lifetime and spreads the overhead of the sow and the feed she eats over more piglets weaned, reducing feed cost per piglet produced. If you are not achieving an average of five litters per sow lifetime, look for factors that may be reducing longevity such as poor lactation feed intake, gilts bred too light or too young and physical damage to feet and shoulders caused by abrasive flooring or sharp edges on equipment.
Tightening up on production planning in order to maximize output, is always a good approach when times are tough. This means making sure that facility utilization is high, primarily through meeting weekly breeding targets in order to make sure farrowing crates stay full. In turn, this requires accurate prediction of future gilt requirements, predictable gilt development routines and a flexible culling policy. Two empty crates in a room of 20 means 10 per cent fewer hogs sold in six months’ time.
Feed efficiency in the grow-finish herd is a major factor in overall feed cost per hog. The biggest cause of reduced efficiency is feed wastage, so regular and precise feeder adjustment becomes critical when feed costs are high. Also, feeding the correct diets according to weight of pig will optimize feed cost and performance. For producers manufacturing their own feed, checking that particle size is close to the optimum 650 – 700 micron range, will lead to high feed digestibility.
During periods of very high feed costs, it is worth reducing market weight slightly, depending on the grid and current weight relative to the grid. The last few kilos of growth are the least efficient and could be up to 20 per cent less efficient than the average for the grow-finish period, so the feed cost saving can be worthwhile. This should only be done if there is some leeway in the grid, so that average index does not deteriorate. Increasing the accuracy of weight selection can allow the average weight to be reduced by perhaps two kg without pushing pigs out of the “sweet spot” on the grid.
High feed prices are here to stay until at least next year’s harvest. Producers will need to batten down the hatches in preparation for a challenging year. The only way to mitigate the effects of high feed cost is to use feed more efficiently by tightening up on all aspects of management, maximizing throughput and optimizing carcass weight based on prevailing costs and returns.