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Pig Feed Economics

8/17/2012

4 Comments

 
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.
4 Comments
Jason
8/27/2012 02:11:59 am

You may already know, but there is another small farmer near you who is mixing his own feed. It's primarily for poultry, but he may be able to make hog feed as well.

Also there are several dairies in the Lowell valley just south of Snohomish. They could be a potential source for milk or know where you can find whey. Here's a list:
http://www.manta.com/mb_54_C00F1_MQ7/dairy_farms/snohomish_wa

And a few brewers in the Everett area:
http://www.snohomish.org/index.php?page_id=618

Good luck!

Reply
Jason
8/27/2012 02:13:58 am

Forgot the link to the feed mixing guy:
http://www.pasturedsensations.com/

Reply
Jeff
8/27/2012 06:56:22 am

Thanks Jason. I just stumbled on Pastured Sensations a few days ago (I was doing a google search on "Pastured Turkeys Seattle" to see if we had moved up into the results yet). They look like they have a tight operation, and I'm hoping to meet them sometime soon. I've had bad luck with meeting other pig local pig farmers though--so far every time I meet someone they give me the cold shoulder as I'm "competition." The dairies are helpful, although I think they need to be a creamery in order to have waste dairy products (I could be wrong though). The brewery waste is also interesting--there is a guy out of Granite Falls that is collecting it from a few local breweries and selling it at $15/ 55 gallon barrel (about $100/ton). Initially it seemed like a great deal until I realized that I needed to factor in the moisture content. With that figured in, it's only slightly cheaper than the commercial feed I'm currently buying, and is an incomplete ration. There is an excellent post here that details the nutritional benefits of feeding grain to pigs and why it's so hard to beat: http://farmfolly.com/2011/03/complete-costs-of-raising-pigs/

I've though seriously about growing my own pig feed, but the economics of that probably won't work out either. I'm going to detail that in an upcoming post. The realities are harsh, but it's good to get a good grasp on them early on I believe.

Reply
jason
5/23/2013 11:30:14 am

i have a place with a lot of fruit trees and i grow everything from avocados to peaches apples raspberry grapes etc oh i live in California on 40 acres could they live on all the wasted fruit i get every year

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