Now that we've made it through our first cycle of pork production, I can look back and examine the profitability of our model. Now is a good time to reflect with the threat of a rapid increase in grain prices looming.
Feed Cost
From January 1st to June 30th, I purchased 5.59 tons of pig feed at an average cost of $480/ton. I was buying in 1000lb bulk bags from Wolfkill Feed and Fertilizer before they went out of business in June. Grain prices went up slightly over the course of the six month period, but not substantially. During that time frame, I fed an adult boar and sow, 1 piglet to 10 weeks of age, and seven piglets to 6.25 months of age. The piglets got more feed than that the adults over the course of the time period, although it took me some time to figure out a good creep feeding system using the electric fence. A reasonable estimate is that the piglets took about 1200 pounds of feed to get to market weight, which includes the feed the sow ate while she was lactating. That brings the feed cost per pig to $288.
Other Costs
Since this was my first time at raising pigs, there were a lot of startup costs. The pasture shelter cost me about $80 in materials. A waterer costs about $30. I spent about $500 on infrastructure to provide water to the pasture (this cost also benefits the turkeys, which I water with the same system). There are some small costs in gas to get back and forth from the feed pickup site. Electric fencing and step-in posts probably added close to another $100. I also pay pasture rent, which I will estimate the pigs' share to be $500 for the six months.
Let's say that the infrastructure costs will last me 5 years, which puts those costs at $150 plus the $500 for a total of $650.
Adding it up
So how much did I make per pig? We know the $288 cost for feed. Since I only sold 4 pigs, we'll divide the other costs by four to get an additional $162.50. Add on $60 for the kill fee, and we get to a grand total of $510.50. I sold the pigs at $4/lb hanging weight, and they averaged $170 lbs hanging. That's $680 per pig. Subtract the costs to get a profit of $170.50 per pig. At that rate, I'd need to sell more than 150 pigs just to make the U.S. Median income.
But there's more to it than that
I only sold 4 pigs from the first litter because I kept three gilts back to grow the herd. The proportional cost of keeping a boar will also shrink if I increase the number of breeding females next year (one boar can service many sows). Let's redo the numbers for next year assuming I have 4 breeding females with 8 piglets to a litter and that all those piglets survive. Although we know feed costs will increase next year, let's keep them the same for the sake of comparison.
32 piglets will cost me $9216. Pasture costs are the same, but I will need to build more shelters, which puts other costs at $940. Total revenue from the sale of those pigs would be $21,760. That brings up the profit per pig to a slightly more reasonable $362.
But wait! We're forgetting to add in the costs of keeping the boar and sows for a full year. They don't make me any money. I'll estimate that each will eat 1500 pounds of feed per year. That's another $1800 in feed costs, plus I need to pay for another 6 months of rent at $500. Oh, and they'll need bedding in the winter (I bale they hay myself, but it still costs me about $150 in misc costs). So subtract $2450. That brings the true cost to $12606 per year. And just to be safe, let's add 10% to cover all the little things that come up. That gives us a total profit per pig of $246 and a before taxes annual profit of $7872.
One last thing to think about
To realize that profit, I have to find between 32 and 64 families to buy a whole or half pig. That ain't easy, and neither is farming.
Feed Cost
From January 1st to June 30th, I purchased 5.59 tons of pig feed at an average cost of $480/ton. I was buying in 1000lb bulk bags from Wolfkill Feed and Fertilizer before they went out of business in June. Grain prices went up slightly over the course of the six month period, but not substantially. During that time frame, I fed an adult boar and sow, 1 piglet to 10 weeks of age, and seven piglets to 6.25 months of age. The piglets got more feed than that the adults over the course of the time period, although it took me some time to figure out a good creep feeding system using the electric fence. A reasonable estimate is that the piglets took about 1200 pounds of feed to get to market weight, which includes the feed the sow ate while she was lactating. That brings the feed cost per pig to $288.
Other Costs
Since this was my first time at raising pigs, there were a lot of startup costs. The pasture shelter cost me about $80 in materials. A waterer costs about $30. I spent about $500 on infrastructure to provide water to the pasture (this cost also benefits the turkeys, which I water with the same system). There are some small costs in gas to get back and forth from the feed pickup site. Electric fencing and step-in posts probably added close to another $100. I also pay pasture rent, which I will estimate the pigs' share to be $500 for the six months.
Let's say that the infrastructure costs will last me 5 years, which puts those costs at $150 plus the $500 for a total of $650.
Adding it up
So how much did I make per pig? We know the $288 cost for feed. Since I only sold 4 pigs, we'll divide the other costs by four to get an additional $162.50. Add on $60 for the kill fee, and we get to a grand total of $510.50. I sold the pigs at $4/lb hanging weight, and they averaged $170 lbs hanging. That's $680 per pig. Subtract the costs to get a profit of $170.50 per pig. At that rate, I'd need to sell more than 150 pigs just to make the U.S. Median income.
But there's more to it than that
I only sold 4 pigs from the first litter because I kept three gilts back to grow the herd. The proportional cost of keeping a boar will also shrink if I increase the number of breeding females next year (one boar can service many sows). Let's redo the numbers for next year assuming I have 4 breeding females with 8 piglets to a litter and that all those piglets survive. Although we know feed costs will increase next year, let's keep them the same for the sake of comparison.
32 piglets will cost me $9216. Pasture costs are the same, but I will need to build more shelters, which puts other costs at $940. Total revenue from the sale of those pigs would be $21,760. That brings up the profit per pig to a slightly more reasonable $362.
But wait! We're forgetting to add in the costs of keeping the boar and sows for a full year. They don't make me any money. I'll estimate that each will eat 1500 pounds of feed per year. That's another $1800 in feed costs, plus I need to pay for another 6 months of rent at $500. Oh, and they'll need bedding in the winter (I bale they hay myself, but it still costs me about $150 in misc costs). So subtract $2450. That brings the true cost to $12606 per year. And just to be safe, let's add 10% to cover all the little things that come up. That gives us a total profit per pig of $246 and a before taxes annual profit of $7872.
One last thing to think about
To realize that profit, I have to find between 32 and 64 families to buy a whole or half pig. That ain't easy, and neither is farming.
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