Benefit Analysis and Profit Calculation for Large-Scale Pig Farming

Benefit Analysis of Large-Scale Pig Farming

The level of benefit from large-scale pig farming depends on the ratio of output to input. The output ratio is positively correlated with economic benefit, while the input ratio is negatively correlated with economic benefit. Economic benefit = output - input. From this formula it can be seen that to maximize the economic benefit of a pig farm, on one hand output must be maximized, and on the other hand input must be minimized. In corporate financial analysis, output, input and economic benefit are respectively called revenue, cost and profit.

Revenue from Large-Scale Pig Farming

The revenue from large-scale pig farming mainly refers to the sales revenue of commercial pigs. That is, pig farming revenue = sales unit price × sales quantity.

Costs of Large-Scale Pig Farming

According to the provisions of the current financial system, the cost items of pig farming include:

Direct material costs: other direct costs such as feed costs, veterinary drug and vaccine costs, and purchased piglet costs that are directly used for actual production consumption.

Direct labor costs: wages, bonuses, various subsidies, and employee welfare funds accrued in accordance with state regulations for personnel directly engaged in production.

Manufacturing overhead: various indirect costs incurred in organizing and managing production, including management personnel wages and welfare costs, depreciation of fixed assets, repair costs, office expenses, water and electricity costs, travel expenses, etc.

In actual calculation of pig farming costs, direct material costs and direct labor costs are directly charged, while manufacturing overhead is allocated and charged according to a certain standard. That is, pig farming cost = direct material costs + direct labor costs + allocated manufacturing overhead.

Profit from Large-Scale Pig Farming

The profit from large-scale pig farming is mainly the amount remaining after deducting the costs and expenses incurred from the revenue realized. That is, pig farming profit = pig farming revenue - pig farming cost.

Data Analysis of the Economic Benefit of Large-Scale Pig Farming

Taking a local large-scale finishing pig farm with excellent breeds and sound management as an example, a rough analysis is made of the economic benefit recently achieved by this pig farm. (Taking 1 finishing pig as an example)

Profit analysis of large-scale pig farming:

① Revenue obtained: one finishing pig is calculated at lOO kg, and the recent local live pig market price is 13 yuan/kg, so revenue = 13 yuan × l00 = 1 300 (yuan).

② Costs incurred: lll0+40+40=1 190 (yuan).

③ Profit realized: l 300-1 190=110 (yuan).

It is particularly worth mentioning that for a pig farm with a relatively stable farming scale, the amount of revenue obtained mainly depends on the sales unit price of live pigs. And the sales unit price of live pigs is determined neither by the pig raisers nor by pork consumers, but mainly by the market supply and demand relationship for live pigs. In the live pig market, if supply exceeds demand, the price of live pigs falls; if demand exceeds supply, the price of live pigs rises. Therefore, to truly maximize the economic benefit of pig farming, the most fundamental and most effective approach is to reduce all kinds of waste as much as possible, save costs, and achieve the minimization of pig farming costs.