Lowering pig farming costs starts with recognizing the misconceptions about feeding costs
Understanding the "feeding cost" misconceptions to effectively lower pig farming costs
Key points:
Many pig farmers, when pig prices are sluggish, deliberately choose low-priced but poor-quality feed or premix, or replace soybean meal with large amounts of rapeseed meal, cottonseed meal, etc., thinking this can save on pig farming costs and reduce losses, but this is very likely counterproductive. Why does this phenomenon occur? The main reason is a misunderstanding of concepts related to "feeding cost" - thinking that all inputs are feeding costs, which is not necessarily true. So what is the real feeding cost? Please see the interpretation below.
On the question of how to reduce feeding costs, many people have made serious mistakes, and their actions have been counterproductive, with results contrary to their wishes. Even more regrettable is that most people suffer big losses without even realizing it, instead believing they are just unlucky and that a poor market is what caused the loss, and they focus their attention on pig prices, wasting energy and time on things they cannot control, drifting further and further from the goal of efficient and healthy pig farming. The root cause is mainly a misunderstanding of concepts related to "feeding cost," which leads to a series of inappropriate measures. Therefore, when pig prices are sluggish, how can one truly and effectively reduce "feeding cost" and maintain a relatively ideal profit state? First, it is necessary to thoroughly correct some erroneous traditional concepts and comprehensively and correctly understand a series of scientifically based concepts and technical measures related to "feeding cost" in the pig farming industry, so as to achieve the efficient pig farming goal of "selling more pigs, selling pigs early, and selling good pigs."
Input is not cost; output is the main factor affecting cost
Understood literally in Chinese, "cost" is the capital spent to accomplish something, and the key lies in accomplishing the thing. The definition of cost in the "Modern Chinese Dictionary" (2002 revised edition) is: all expenses incurred in producing a product, with the core being the "product"; the definition of "cost" in the "Cost Management System Terminology" compiled by the China Cost Association is even more precise: the resource price already paid or payable for process value-added and effective results, with "value-added" or "effective results" as the premise. By the same logic, for the pig farming industry, only "input" linked to the produced commodity can be called "feeding cost." Therefore, how much money is spent in the production process as "input" is not cost, but merely one of the elements constituting cost. Input must be linked to output (commodity) to calculate cost, and the correct cost expression should be: input ÷ output = cost
We are generally used to saying how much it costs to raise a sow for a year, but this is actually a mistaken conceptual positioning, because the purpose of raising a sow is to produce healthy piglets, and piglets are the valuable output. Only by using output as the benchmark can the truly effective cost be calculated.
For example, raising one sow for a year costs about 4000 yuan, but this is not the cost; it is merely the input that must be paid to produce piglets. If this sow does not come into estrus for a year, or repeatedly fails to conceive after estrus, or aborts or has stillbirths after conception, and produces no sellable commodity - piglets - then this sow has no output for the year, let alone value-added. It can only be counted as consuming 4000 yuan of input, with no cost to speak of; if this sow produces 15 healthy weaned piglets in a year, then the feeding cost per piglet is 267 yuan (4000÷15), or if this sow produces 25 piglets in the same period, then the feeding cost per piglet can drop to 160 yuan (4000÷25). Therefore, when "input" remains unchanged, "output" determines "cost." How much valuable commodity is produced is the main factor affecting "feeding cost." Therefore, the traditional idea held by most people that "reducing input" can "reduce cost" urgently needs correction. Aiming attention and effective measures at "output" is the effective way to "reduce feeding cost," and only then can the significance of "selling more pigs" be manifested.
Market pig prices and feeding costs are two completely unrelated independent events
In the minds of most pig farmers, market pig prices and feeding costs are often mentioned in the same breath. When pig prices are high, they are very willing to increase input and want to use anything good they hear about, hoping to obtain more profit; when pig prices are low, they try to reduce input as much as possible and save wherever they can, thinking this can lower feeding costs. In fact, with a little analysis it becomes clear that pig prices are determined by the balance of market supply and demand, and producers cannot change them. Feeding cost, however, is mainly constrained by production efficiency, and as stated above, is determined by the ratio of input to output. It is the inevitable result of the producer's actual operations and has nothing to do with the supply-demand relationship of the product on the market. Therefore, the two are mutually unrelated independent events. For example, when the current price of finished pigs for slaughter is 10.5 yuan per kg, many owners say they have reached the break-even point, and some pig farms have even already suffered losses. Yet a small number of owners such as Mr. Xia Baixin of Yixing, Jiangsu (with sow inventories ranging from 200 to 4000 head) can still earn a profit of 2 yuan per kg, making about 250 yuan per finished pig sold.
The fundamental reason why the feeding benefits of different pig farms differ so greatly is not different pig prices, but different output (production performance), which in turn leads to greatly different feeding costs. The former may produce only about 15 market-ready commercial pigs per sow per year (PSY), while the latter spend about half a year gradually changing concepts, adjusting feeding management measures, improving herd health, and raising production performance PSY to 20 head or more. In fact, experienced pig owners should understand that feeding cost not only has nothing to do with the market price of the product, but is also a dynamic indicator. Within the same pig farm, although the genetics and the feed, vaccines, drugs, etc. used are all the same, due to factors such as differences in pig house layout and feeding management levels, the production performance of each pig house differs, thus causing their feeding costs to differ as well.
The cost of raising animals and producing inanimate objects are two different concepts
An important reason why many pig farm owners have serious misunderstandings about "feeding cost" is that they confuse the cost concepts of "raising animals" and "producing inanimate objects." The cost concept of producing industrial products (inanimate objects, such as compound feed) is relatively simple and clear, and input and cost have a linear relationship. But between input and cost in producing animal products (such as livestock and poultry) there is a relatively complex dynamic functional relationship, and its correlation coefficient varies greatly with time and space. This depends on the existence in the process of raising animals of a "maintenance requirement" "dynamic cost." Assuming the animal's health status does not change, for a product reaching the same market specification, keeping it one more day requires paying one more portion of "dynamic cost." Taking commercial pig raising as an example, when reaching a market weight of 120 kg, if kept one more day, about 6 yuan to 8 yuan more in feed cost must be paid, which can be roughly understood as the "dynamic cost" of the "maintenance requirement" that must be paid to make up for slow growth in the previous stage. If effective measures can be taken to reduce the feeding time for commercial pigs reaching a market weight of 120 kg from 180 days to 150 days, then in fact the feeding cost per pig is reduced by 180 yuan to 240 yuan. In other words, without deducting the possibly increased portion of input, this is the extra profit the pig farm owner earns per pig.
Correctly judging whether "input" is effective is the key to success or failure in pig farming
As stated above, the basic goal of efficient and healthy pig farming is to "sell more pigs, sell pigs early, and sell good pigs." However, if effective measures are not taken in pig farming, it is difficult to obtain extra returns without increasing effective input. In actual production, what often troubles pig farmers is not whether they are willing to invest or how much to invest, but how to judge whether the input is effective, that is, which inputs should be made and which should not. Because effective input is investment in the business, and the purpose of investment is to pursue returns; ineffective input can only be counted as consumption, and consumption is not only unhelpful but in many cases harmful. For example, in recent years pig diseases have been complex, and many people feel pigs are hard to raise, but many problems are the bad consequences of owners abusing vaccines and veterinary drugs.
In addition, when pig prices are sluggish, many owners deliberately choose low-priced but poor-quality feed or premix, or replace soybean meal with large amounts of rapeseed meal, cottonseed meal, etc., thinking this can save costs and reduce losses, but this is very likely counterproductive. Because when input is reduced and production performance declines, not only will feeding cost not be lowered, but cost will instead increase.
Mr. Wu, owner of the Shaoguan Fanling Breeding Pig Farm, who was not originally very familiar with the pig farming industry, recently said with great pride that current pig prices have already put surrounding pig owners under heavy pressure, and many are on the edge of losing money, while one of his farms with 600 sows in inventory, mainly selling piglets, still has a net profit of about 200,000 yuan per month. No wonder that 3 years ago, when he had just taken over an 800-sow farm that had lost money for years, after just 3 short years of careful management, without additional investment, it had already grown like a snowball to a scale of 2,500 sows in inventory. Mr. Wu's successful experience fully shows that updating concepts is the premise of whether a business succeeds, and in recent years there have been too many similar cases to count.
In summary, pig feeding cost has nothing to do with market pig prices. Whether to adopt any measure depends critically on whether the input-output ratio is worthwhile, and the influence of pig prices can almost be ignored. Practical experience shows that when pig prices are high, using "good feed" (including feed and various materials) can make more money, and when pig prices are low, it can reduce losses or even avoid losses; on the contrary, when pig prices are high, using poor feed will make less money, and when pig prices are low, it will increase losses.
Therefore, if pig farmers want to obtain good economic benefits, regardless of pig prices, they should at all times adopt measures that conform to scientific principles and are indeed beneficial.
Source: China Animal Husbandry and Veterinary News
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Good article, I benefited from it.
--------------------------------------
Learned....................
--------------------------------------
Good article, I benefited from it??????????
--------------------------------------
Good article. I have learned a lot................................................
--------------------------------------
Thoroughly correct some erroneous traditional concepts and comprehensively and correctly understand a series of scientifically based concepts and technical measures related to "feeding cost" in the pig farming industry, so as to achieve the efficient pig farming goal of "selling more pigs, selling pigs early, and selling good pigs."
Not a bad article! Needs to be properly digested. I suggest the moderator add it to the highlights......
--------------------------------------
Not bad, a good article, it describes a misunderstanding of today's farmers
--------------------------------------
Profit is not squeezed out of the pig's mouth, and health is not raised with drugs......
--------------------------------------
This article is fairly novel and corrected my previous way of thinking. I think this argument can let elite salespeople doing high-end feed study it, making their sales pitch more forceful
--------------------------------------
Well written, I wonder how many pig farmers know how to calculate costs?
For example, the piglet cost at different PSY
--------------------------------------
The viewpoint is somewhat biased. I partly agree, and some statements are even very far from the actual situation!
--------------------------------------
Input is not cost, I cannot understand it, and it is hard to accept. The break-even point of a pig farm is 80%-85% related to feed cost.
Many pig farmers, when pig prices are sluggish, deliberately choose low-priced but poor-quality feed or premix, or replace soybean meal with large amounts of rapeseed meal, cottonseed meal, etc., thinking this can save on pig farming costs and reduce losses, but this is very likely counterproductive. Why does this phenomenon occur? The main reason is a misunderstanding of concepts related to "feeding cost" - thinking that all inputs are feeding costs, which is not necessarily true. So what is the real feeding cost? Please see the interpretation below.
On the question of how to reduce feeding costs, many people have made serious mistakes, and their actions have been counterproductive, with results contrary to their wishes. Even more regrettable is that most people suffer big losses without even realizing it, instead believing they are just unlucky and that a poor market is what caused the loss, and they focus their attention on pig prices, wasting energy and time on things they cannot control, drifting further and further from the goal of efficient and healthy pig farming. The root cause is mainly a misunderstanding of concepts related to "feeding cost," which leads to a series of inappropriate measures. Therefore, when pig prices are sluggish, how can one truly and effectively reduce "feeding cost" and maintain a relatively ideal profit state? First, it is necessary to thoroughly correct some erroneous traditional concepts and comprehensively and correctly understand a series of scientifically based concepts and technical measures related to "feeding cost" in the pig farming industry, so as to achieve the efficient pig farming goal of "selling more pigs, selling pigs early, and selling good pigs."
Input is not cost; output is the main factor affecting cost
Understood literally in Chinese, "cost" is the capital spent to accomplish something, and the key lies in accomplishing the thing. The definition of cost in the "Modern Chinese Dictionary" (2002 revised edition) is: all expenses incurred in producing a product, with the core being the "product"; the definition of "cost" in the "Cost Management System Terminology" compiled by the China Cost Association is even more precise: the resource price already paid or payable for process value-added and effective results, with "value-added" or "effective results" as the premise. By the same logic, for the pig farming industry, only "input" linked to the produced commodity can be called "feeding cost." Therefore, how much money is spent in the production process as "input" is not cost, but merely one of the elements constituting cost. Input must be linked to output (commodity) to calculate cost, and the correct cost expression should be: input ÷ output = cost
We are generally used to saying how much it costs to raise a sow for a year, but this is actually a mistaken conceptual positioning, because the purpose of raising a sow is to produce healthy piglets, and piglets are the valuable output. Only by using output as the benchmark can the truly effective cost be calculated.
For example, raising one sow for a year costs about 4000 yuan, but this is not the cost; it is merely the input that must be paid to produce piglets. If this sow does not come into estrus for a year, or repeatedly fails to conceive after estrus, or aborts or has stillbirths after conception, and produces no sellable commodity - piglets - then this sow has no output for the year, let alone value-added. It can only be counted as consuming 4000 yuan of input, with no cost to speak of; if this sow produces 15 healthy weaned piglets in a year, then the feeding cost per piglet is 267 yuan (4000÷15), or if this sow produces 25 piglets in the same period, then the feeding cost per piglet can drop to 160 yuan (4000÷25). Therefore, when "input" remains unchanged, "output" determines "cost." How much valuable commodity is produced is the main factor affecting "feeding cost." Therefore, the traditional idea held by most people that "reducing input" can "reduce cost" urgently needs correction. Aiming attention and effective measures at "output" is the effective way to "reduce feeding cost," and only then can the significance of "selling more pigs" be manifested.
Market pig prices and feeding costs are two completely unrelated independent events
In the minds of most pig farmers, market pig prices and feeding costs are often mentioned in the same breath. When pig prices are high, they are very willing to increase input and want to use anything good they hear about, hoping to obtain more profit; when pig prices are low, they try to reduce input as much as possible and save wherever they can, thinking this can lower feeding costs. In fact, with a little analysis it becomes clear that pig prices are determined by the balance of market supply and demand, and producers cannot change them. Feeding cost, however, is mainly constrained by production efficiency, and as stated above, is determined by the ratio of input to output. It is the inevitable result of the producer's actual operations and has nothing to do with the supply-demand relationship of the product on the market. Therefore, the two are mutually unrelated independent events. For example, when the current price of finished pigs for slaughter is 10.5 yuan per kg, many owners say they have reached the break-even point, and some pig farms have even already suffered losses. Yet a small number of owners such as Mr. Xia Baixin of Yixing, Jiangsu (with sow inventories ranging from 200 to 4000 head) can still earn a profit of 2 yuan per kg, making about 250 yuan per finished pig sold.
The fundamental reason why the feeding benefits of different pig farms differ so greatly is not different pig prices, but different output (production performance), which in turn leads to greatly different feeding costs. The former may produce only about 15 market-ready commercial pigs per sow per year (PSY), while the latter spend about half a year gradually changing concepts, adjusting feeding management measures, improving herd health, and raising production performance PSY to 20 head or more. In fact, experienced pig owners should understand that feeding cost not only has nothing to do with the market price of the product, but is also a dynamic indicator. Within the same pig farm, although the genetics and the feed, vaccines, drugs, etc. used are all the same, due to factors such as differences in pig house layout and feeding management levels, the production performance of each pig house differs, thus causing their feeding costs to differ as well.
The cost of raising animals and producing inanimate objects are two different concepts
An important reason why many pig farm owners have serious misunderstandings about "feeding cost" is that they confuse the cost concepts of "raising animals" and "producing inanimate objects." The cost concept of producing industrial products (inanimate objects, such as compound feed) is relatively simple and clear, and input and cost have a linear relationship. But between input and cost in producing animal products (such as livestock and poultry) there is a relatively complex dynamic functional relationship, and its correlation coefficient varies greatly with time and space. This depends on the existence in the process of raising animals of a "maintenance requirement" "dynamic cost." Assuming the animal's health status does not change, for a product reaching the same market specification, keeping it one more day requires paying one more portion of "dynamic cost." Taking commercial pig raising as an example, when reaching a market weight of 120 kg, if kept one more day, about 6 yuan to 8 yuan more in feed cost must be paid, which can be roughly understood as the "dynamic cost" of the "maintenance requirement" that must be paid to make up for slow growth in the previous stage. If effective measures can be taken to reduce the feeding time for commercial pigs reaching a market weight of 120 kg from 180 days to 150 days, then in fact the feeding cost per pig is reduced by 180 yuan to 240 yuan. In other words, without deducting the possibly increased portion of input, this is the extra profit the pig farm owner earns per pig.
Correctly judging whether "input" is effective is the key to success or failure in pig farming
As stated above, the basic goal of efficient and healthy pig farming is to "sell more pigs, sell pigs early, and sell good pigs." However, if effective measures are not taken in pig farming, it is difficult to obtain extra returns without increasing effective input. In actual production, what often troubles pig farmers is not whether they are willing to invest or how much to invest, but how to judge whether the input is effective, that is, which inputs should be made and which should not. Because effective input is investment in the business, and the purpose of investment is to pursue returns; ineffective input can only be counted as consumption, and consumption is not only unhelpful but in many cases harmful. For example, in recent years pig diseases have been complex, and many people feel pigs are hard to raise, but many problems are the bad consequences of owners abusing vaccines and veterinary drugs.
In addition, when pig prices are sluggish, many owners deliberately choose low-priced but poor-quality feed or premix, or replace soybean meal with large amounts of rapeseed meal, cottonseed meal, etc., thinking this can save costs and reduce losses, but this is very likely counterproductive. Because when input is reduced and production performance declines, not only will feeding cost not be lowered, but cost will instead increase.
Mr. Wu, owner of the Shaoguan Fanling Breeding Pig Farm, who was not originally very familiar with the pig farming industry, recently said with great pride that current pig prices have already put surrounding pig owners under heavy pressure, and many are on the edge of losing money, while one of his farms with 600 sows in inventory, mainly selling piglets, still has a net profit of about 200,000 yuan per month. No wonder that 3 years ago, when he had just taken over an 800-sow farm that had lost money for years, after just 3 short years of careful management, without additional investment, it had already grown like a snowball to a scale of 2,500 sows in inventory. Mr. Wu's successful experience fully shows that updating concepts is the premise of whether a business succeeds, and in recent years there have been too many similar cases to count.
In summary, pig feeding cost has nothing to do with market pig prices. Whether to adopt any measure depends critically on whether the input-output ratio is worthwhile, and the influence of pig prices can almost be ignored. Practical experience shows that when pig prices are high, using "good feed" (including feed and various materials) can make more money, and when pig prices are low, it can reduce losses or even avoid losses; on the contrary, when pig prices are high, using poor feed will make less money, and when pig prices are low, it will increase losses.
Therefore, if pig farmers want to obtain good economic benefits, regardless of pig prices, they should at all times adopt measures that conform to scientific principles and are indeed beneficial.
Source: China Animal Husbandry and Veterinary News
--------------------------------------
Good article, I benefited from it.
--------------------------------------
Learned....................
--------------------------------------
Good article, I benefited from it??????????
--------------------------------------
Good article. I have learned a lot................................................
--------------------------------------
Thoroughly correct some erroneous traditional concepts and comprehensively and correctly understand a series of scientifically based concepts and technical measures related to "feeding cost" in the pig farming industry, so as to achieve the efficient pig farming goal of "selling more pigs, selling pigs early, and selling good pigs."
Not a bad article! Needs to be properly digested. I suggest the moderator add it to the highlights......
--------------------------------------
Not bad, a good article, it describes a misunderstanding of today's farmers
--------------------------------------
Profit is not squeezed out of the pig's mouth, and health is not raised with drugs......
--------------------------------------
This article is fairly novel and corrected my previous way of thinking. I think this argument can let elite salespeople doing high-end feed study it, making their sales pitch more forceful
--------------------------------------
Well written, I wonder how many pig farmers know how to calculate costs?
For example, the piglet cost at different PSY
--------------------------------------
The viewpoint is somewhat biased. I partly agree, and some statements are even very far from the actual situation!
--------------------------------------
Input is not cost, I cannot understand it, and it is hard to accept. The break-even point of a pig farm is 80%-85% related to feed cost.