Chapter Two:
COMPARISON OF PRODUCTION SYSTEMS
Kenneth Foster, Chris Hurt, and Jeffrey Hale
Introduction
The approach used in much of this book is to present systems of hog production. The
systems are models or simulations of “real world” situations. These systems can then be used for
comparison with each other or to examine changes within systems. More specifically, the
economic analysis in this text is concerned with the effects of size and technology on cost of swine
production. This chapter will serve as an explanation of the budgeting done throughout the book,
a comparison of the assumptions used in building various systems, and a summary of the results
found.
Two broad categories of budgets are presented in this book, enterprises and technologies.
The enterprise systems are designed to capture the difference in cost of production that may result
from size differences. In Chapters Three through Six, four different sized farrow-to-finish swine
production enterprises are developed: 1200 sow, 600 sow, 300 sow, and 150 sow. Two systems
are developed in the 150 sow chapter, high and low technology.
The information on technology presented in Chapters Seven through Thirteen is designed
to assist smaller producers considering the adoption of various technologies commonly employed
by larger enterprises. More specifically, the technology systems are designed to show both how
smaller producers can implement the technology and how implementation might impact cost of
production. The technologies examined include: Split-Sex and Phase Feeding, Artificial
Insemination and Enhanced Genetics, All-In/All-Out Production, Segregated Early Weaning,
Marketing, and Financial Management. A diagram of how the budgets used in this book relate to
each other is presented in Figure 2-1.
1200 Sow High Technology System
The first system modeled is a 1200 productive sow farrow-to-finish farm. The 1200 sow
system is large enough to capture the full benefits of most technology and is assumed to be the
smallest size at which the most efficiency can be gained with respect to building-space and flow
management. The 1200 sow unit is actually comprised of 1,412 females. This number is required
to provide for replacement gilts and open sows.
In the 1200 sow operation, a group of 60 females farrows each week in one of four
farrowing rooms. The 9.5 pigs weaned, under segregated early weaning protocol, from each of
these farrowings provide a group of 570 pigs each week. All In/All Out technology is employed
by room and age group through the nursery and grow-finish facilities. The site plan is designed to
mimic three-site production by maintaining separate structures for the farrowing, nursery, and
grow/finish buildings, and by maintaining strict bio-security.
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Positioning Your Pork Operation for the 21st Century
Chapter Two: Comparison of a Changing Pork Industry
The genetics assumed in the 1200 sow unit have superior high lean growth attributes
combined with excellent maternal traits. Breeding is completed using first a natural service and
then artificial insemination. The market hogs are fed a set of phased diets and are fed separately
according to sex.
A three-stage lagoon combined with irrigation is employed for waste disposal. The
shallow pits under the rooms are flush cleaned in a pit-recharged system. The site consists of the
breeding/gestation, farrowing, and finishing units spread over 16 acres.
Systems Conceptualized in this Book
1200 Sow
600 Sow
300 Sow
150 Sow
Chapter 4
Chapter 5
Chapter 6
Chapter 3
High
Technology
System
High
Technology
System
High
Technology
System
Systems to
Implement
Technologies
High
Technology
Low
Technology
Chapters 7-12
Figure 2-1
600 Sow High Technology System
Chapter Four details the model of a 600 productive sow farrow-to-finish enterprise. The
600 sow operation is essentially one-half of the 1200 sow high technology system. All of the
technologies assumed in the 1200 sow high technology system are in the 600 sow enterprise. A
total of 706 total females are required. A group of 30 females are farrowed each week and wean
9.5 pigs per litter. Therefore, a group of 285 market hogs are produced each week.
In order to maintain cost efficiency in construction, 570 pig finishing and nursery rooms
are used. As a result, two weeks of pigs are combined after weaning. Thus, the 600 sow unit still
utilizes All-In/All-Out production techniques, but now only by room and not by farrowing group,
as was the case in the 1200 sow unit.
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Positioning Your Pork Operation for the 21st Century
Chapter Two: Comparison of a Changing Pork Industry
300 Sow High Technology System
The 300 sow unit is close to one-half of the 600 sow high technology system, with some
exceptions. In the 600 sow high technology system, each farrowing room consists of 30 crates;
halving this would yield an odd number of crates at the 300 sow level. So in the 300 sow high
technology system, sows are farrowed weekly in a farrowing facility consisting of four rooms of
14 crates each. This operation requires 329 females in order to maintain full production.
Market hogs are reared using All-In/All-Out practices by room. Pigs are segregated early
weaned before 21 days of age. The enterprise mimics three-site production on one site.
It has been assumed that larger producers have greater access to the best genetics.
Therefore, in the 300 sow analysis the budgeted quality of genetics is slightly lower than in the two
larger systems. This line yields 9.2 pigs weaned per litter. Market hogs are fed using both splitsex and phase feeding protocols.
Prior research has shown that enterprises above the 300 sow size can reduce costs by using
a lagoon waste handling system. However, in units of 300 sows and smaller, it appears to be more
cost effective to utilize deep-pits. Under the deep-pit scenario, waste is pumped out and injected
into crop land. The 300 sow high technology system modeled here employs a deep-pit waste
management system.
150 Sow High Technology System
Many of the producers with pork operations around the 150 sow size are also involved with
cropping operations. Therefore, the high technology 150 sow operation assumes an eight times per
year farrowing schedule. A weekly system could be conceptualized for this scale of operation, but
the labor constraints of farrowing 6 to 8 sows weekly would probably be prohibitive. To size the
eight-times-per-year schedule efficiently, 180 females are required. The breeding herd is in four
groups of 45 sows each, which farrow 36 litters approximately every 39 days. Females are
assumed to be bred on the second heat after weaning. Skipping an estrus allows the operation to
employ segregated early weaning and allows more down-time for labor needed for field work in
the cropping operation.
The genetics used in the 300 sow high technology system are also found in the 150 sow
high technology system. This line provides 9 pigs weaned per litter. Each group farrowed
produces 324 market hogs. This quantity allows the 150 sow high technology system to be AllIn/All-Out by room and age group. Split-sex and phase feeding are also assumed.
Three-site mimicking is accomplished in the 150 sow high technology by maintaining
separate structures for farrowing, nursery, and finishing, and as before, following the Segregated
Early Weaning protocol. Breeding and gestation are modeled using an open lot and breeding shed,
thus the slight reduction in pigs produced per litter. The nursery and finishing are confined
buildings with deep pits. Waste is handled through the use of the deep-pit system and injection
into cropland.
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Positioning Your Pork Operation for the 21st Century
Chapter Two: Comparison of a Changing Pork Industry
150 Sow Low Technology System
In the Midwest, the last major capitalization in swine production was in the late 1970s and
early 1980s. Additionally, most of the hog producers in the region have diversified farming
operations. Therefore, many of the production facilities in the Midwest are of smaller size and
older technology, and utilize labor in combination with a cropping operation. It is the managers of
these operations who are currently interested in much of the technology discussed in this book.
For these reasons, a model called the 150 sow low technology is included. The 150 sow low
technology system is the base model used in Chapters 7 through 12 to show the economic impacts
of the adoption of various technologies. However, while the implications of technology adoption
are examined in terms of the 150 sow low technology system, they likely apply to both smaller and
larger size operations using similar technology.
The 150 sow low technology system assumes farrowing 36 litters every 51 days. This
scenario requires 135 females in three groups of 45 sows each. The genetics used is assumed to be
the same as those in the 300 and 150 sow high technology systems. Due to the system of
production employed, 8.5 pigs are assumed to be weaned with each litter.
An in-line building plan is assumed in this scenario. This type of construction is still quite
commonly in use in the Midwest. Continuous flow production is assumed with this in-line system.
Market hogs are weaned at 39 days.
Systems to Implement Technology
Chapters Seven through Twelve of this book are designed to describe and to provide
methods of adopting many of the major technologies currently available to producers.
Additionally, the technology chapters provide the results of quantifying the possible economic
effects of technology adoption. In these technology chapters, the 150 sow low technology system
is used as base into which each of the technologies is integrated.
Methodology
The budgets for each of these systems were constructed using an engineering budget
method. The systems were built with information provided by and conversations with:
researchers, industry experts, producers, and input suppliers. The information provided by these
individuals was compared, contrasted, and integrated into a framework, from which the most
realistic models possible were produced.
Care must be taken in reading the information in the budgets. All budgets are based on
specific scenarios. Therefore, the systems will not coincide exactly with any given individual firm.
They are intended to provide a benchmark for comparison and to demonstrate the methodology for
making cost comparisons. They are not the cost for any specific enterprise. The systems are
designed to be employed as examples into which individual producers can project their own
situation and examine the possible effects of a change in technology.
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Positioning Your Pork Operation for the 21st Century
Chapter Two: Comparison of a Changing Pork Industry
Summary of Assumptions and Budget Results
Specifications and Assumptions
The information presented in Table 2-1 shows the specification for the overall systems
created in this analysis. The row entitled Actual Sows provides the number of productive females
assumed, or in the case of the 150 sow systems, the number of farrowings per year.
Table 2-1: Unit Specifications
Unit Type
High Tech. High Tech.
Unit Name
1200
600
Actual Sows
1200
600
Farrow
4rm/60cr
4rm/30cr
# of Groups
20
20
Sows/Group
71
35
High Tech.
300
280
4rm/14cr
20
16
High Tech.
150
8x
1rm36/cr
4
45
Low Tech.
150
7x
1rm36/cr
3
45
Production Assumptions
Assumptions regarding efficiencies for the breeding herd and market herd for the five
systems are shown in Table 2-2 and Table 2-3.
Table 2-2: Production Herd Assumptions
1200 Sow
600 Sow
300 Sow
150 Sow
Unit
High Tech. High Tech. High Tech. High Tech.
Females in Herd
number
1412
706
329
180
Farrowings/Sow/Year number
2.24
2.24
2.24
1.87
Farrowing Rate
percent
0.85
0.85
0.85
0.80
Sows/Boar
number
AI
AI
18
18
Total Boars
number
35
18
18
10
Sow Replacement
percent
0.50
0.50
0.50
0.50
Boar Replacement
percent
0.50
0.50
0.50
0.50
Price of Gilts
dollars
250
260
180
180
Price of Boars
dollars
1,500
1,500
500
500
Female Cull Weight
pounds
375
375
375
375
Farrowing Crates
number
224
108
56
36
Sows in Gestation
number
1129
565
264
135
Production Mortality percent
0.05
0.05
0.05
0.05
150 Sow
Low Tech.
135
1.92
0.80
15
12
0.50
0.50
180
500
375
48
90
0.075
As shown in Table 2-2, the farrowing rate is .85 for the 1200, 600, and 300 sow systems.
However, this rate decreases to .80 for both of the 150 sow systems. This decrease is due to the
system of production and lower intensity of management assumed at the 150 sow level. Artificial
insemination is assumed in place at the 1200 and 600 sow level only. This assumption was made
to reflect current adoption patterns.
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Positioning Your Pork Operation for the 21st Century
Chapter Two: Comparison of a Changing Pork Industry
The 600 sow system is assumed to pay $10 more per gilt than the 1200 sow unit, for the
same genetic line, due to quantity discounts. The sharply higher cost for gilts and boars in the two
largest systems reflects the higher quality genetics assumed to be in place.
The last row in Table 2-2 shows the assumed annual breeding herd mortality for various
systems. This rate remains constant at 5% for all units except the 150 sow low technology system,
which is 7.5%. This is because it does not employ SEW, All-In/All-Out, or three-site production.
Shown in Table 2-3 are the market herd assumptions in each of the systems. The annual
number of farrowings is a calculation completed by the PIGFLOW computer program, again based
on the set of assumptions made. The PIGFLOW computer program is a space management and
building capacity design software.
Table 2-3: Market Herd Assumptions
1200 Sow 600 Sow 300 Sow
150 Sow 150 Sow
Unit
High Tech. High Tech. High Tech. High Tech. Low Tech.
Annual Farrowings
number
3,197
1,599
746
337
259
Maximum Weaning Age
days
21
21
21
21
39
Pigs Weaned/Litter
number
9.5
9.5
9.2
9.0
8.5
Pigs/Crate/Year
number
133
133
129
89
55
Market Hogs/Litter
number
9.025
9.025
8.648
8.46
7.905
Market Hog Weight
pounds
245
245
245
245
245
Average Days/Market
days
155
155
165
168
198
Maximum Days/Market
days
162
162
172
175
205
2
2
Ft /Pig (finishing)
ft
7.5
7.5
7.5
7.5
7.5
Capacity (finishing)
number
7,200
3,590
1,800
1,030
1,230
Ft2/Pig (nursery)
ft2
2.5
2.5
2.5
2.5
2.5
Capacity (nursery)
number
4,100
2,050
1,160
350
400
Herd Feed Efficiency
rate
3.0
3.0
3.2
3.2
3.5
Market Herd Mortality
rate
.05
.05
.06
.06
.07
The maximum weaning age and the number of pigs weaned per litter are assumptions that
were made in the creation of the systems. These in turn drive the numbers generated for the
number of pigs per crate per year and the number of market hogs per litter. The number of hogs
marketed per litter was found by taking the assumed number of pigs weaned per litter and
adjusting by the herd mortality rates shown in the last row of Table 2-3.
The market hog weight, average and maximum day to market, and square feet of space in
the nursery and finishing space all represent assumptions made about the enterprises. The
capacities of the nursery and finishing space were calculated by PIGFLOW, based on the above
assumptions.
The whole herd feed efficiencies for each system were based on field experiences of
industry experts and researchers. The same methodology was used in determining the assumed
herd mortality rates.
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Positioning Your Pork Operation for the 21st Century
Chapter Two: Comparison of a Changing Pork Industry
Economic Assumptions
The capitalization of the five operations is based on the current cost of new construction.
The costs assumed are shown in Table 2-4. The figures in Table 2-4 are a composite of
information from actual field experience and engineering estimates.
Table 2-4: Construction Costs ($ per headspace except shed costs)
1200 Sow
600 Sow
300 Sow
Unit
High Tech. High Tech. High Tech.
Breeding/Gestation $/sow
440
451
462
Breeding Shed
Total $
N/A
N/A
N/A
Farrowing
$/crate
1,950
2,010
2,050
Nursery
$/head
80
82
85
Finishing
$/head
125
125
150
150 Sow
High Tech.
N/A
10,000
2,100
88
150
150 Sow
Low Tech.
N/A
10,000
2,100
88
150
The 1200, 600, and 300 sow systems are assumed to employ a confined breeding and
gestation facility. The figure in Table 2-4 is the dollar amount assumed per female capacity. The
150 sow operations assume an open front breeding shed with pasture gestation. The amount
shown in Table 2-4 is for the cost of the shed. The dollar amount for farrowing represents the
construction cost per crate. The figure for nursery and finishing space is dollars per headspace.
In addition to the basic cost of facility construction, a number of other capital items are
required. In Table 2-5, some of the larger capital expense items are presented for comparison.
The sources of the price for the feed systems, site preparation, driveway, and land opportunity are
explained in the chapters pertaining to each system. The 1200 and 600 sow systems utilize a
lagoon waste disposal system, whereas the 300 and 150 sow systems employ deep-pit and pump
systems. Thus, the charge for the lagoon is separated out and shown in Table 2-5, and the cost of
the deep-pits is embedded in the construction costs for the 300 and 150 sow systems.
Table 2-5: Other Costs
Feed System
Site Preparation
Driveway
Land Opportunity
Lagoon & Irrigation
Unit
dollars
dollars
dollars
dollars
dollars
1200 Sow
High Tech.
115,000
32,000
10,500
1,627
268,315
600 Sow
High Tech.
115,000
24,000
9,750
1,220
142,701
300 Sow
High Tech.
67,500
15,000
9,000
763
N/A
150 Sow
High Tech.
48,750
10,000
9,000
509
N/A
150 Sow
Low Tech.
48,750
5,000
9,000
254
N/A
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Positioning Your Pork Operation for the 21st Century
Chapter Two: Comparison of a Changing Pork Industry
Capitalization
The total capitalization for each system is shown in Table 2-6.
Table 2-6: Capitalization
Land
Buildings
Equipment
Production
Inventory
Market Inventory
Unit
dollars
dollars
dollars
dollars
dollars
1200 Sow
600 Sow
300 Sow
150 Sow
High Tech. High Tech. High Tech. High Tech.
22,400
16,800
10,500
7,000
1,489,366
780,220
334,789
158,091
1,536,377
860,729
482,320
257,535
425,775
221,088
71,631
39,270
344,021
172,010
86,487
43,902
150 Sow
Low Tech.
3,500
147,798
251,943
33,110
44,568
Results
A summary of the costs of production for each system is provided in Table 2-7. The cost
for the 150 sow low technology system, at $47.88 per hundredweight, appears very high.
However, this system has a slow turn-over of sows and a modest total throughput. In addition, the
budgets are based upon new building costs, with full depreciation and labor costs assigned. Most
would agree that one could not afford to build a new set of facilities and turn them this slowly. On
the other hand, a number of grain-hog farms do turn facilities this slowly, but they operate more
highly depreciated facilities.
The technology and advantages of size in the 1200 sow system allow it to operate at a
sharply lower cost compared to smaller systems. This cost difference ranges from about $1.50 per
hundredweight, in the 600 sow system, to about $6.00 per hundredweight in the 150 sow high
technology system.
Table 2-7: Comparison of Cost of Production ($/cwt)
1200 Sow
600 Sow
300 Sow
High Tech.
High Tech.
High Tech.
Feed Cost
18.56
18.56
19.80
Direct Cost
22.07
22.07
23.37
Indirect Cost
12.17
13.64
15.26
Total Cost
34.25
35.72
38.63
150 Sow
High Tech.
19.80
23.29
17.25
40.54
150 Sow
Low Tech.
21.66
25.33
22.55
47.88
Detailed specifications of each of the sow systems are provided in this publication. The
“cost gap” between the 1200 sow system and the 150 sow low technology system is substantial.
Chapters 7 through 13 will examine many different alternative technologies and business
organizations for finding ways to help close this “cost gap.”
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Positioning Your Pork Operation for the 21st Century
Chapter Two: Comparison of a Changing Pork Industry