As I write this blog, roads in southwestern Minnesota are once again closed due to blowing and drifting snow. Wind chills in the region tonight are expected to be as low as -25F (-32C) with low temperatures around 0F (-18C) for several nights.
With these conditions, it’s hard to turn your thoughts to summer market pig sales. Yet, that is what needs to happen. The pigs you will sell to slaughter in June are already in your facilities and by the end of the month you will be placing pigs in your grow-finish facilities that will be your July and August sales.
Summer sale weights always decline from January weights. Barns are both tight for space because of the successes in breeding/farrowing in cooler months and because of declines in weight gain due increasing environmental temperatures.
A couple of years ago I calculated that the July and August slaughter pig sale weights for the Iowa and Southern Minnesota market for the 2007-2011 years averaged 8.7 pounds lighter than the January weights for those years. This summer, the futures are currently offering us the hope of $80/cwt which translates into a $60/cwt live price.
This means summer sales return $5.22 per pig less income than the same pigs sold in January because of the loss of live weight. If we adjust for the lesser amount of feed consumed (I used 3.9 f/g for the last pounds of gain in making this adjustment), we still come up with about $2.25/pig lower net income because of the loss in sale weight.
Said another way – you can afford to spend approximately $2.25 per pig to gain back the loss in summer sale weight above current feed costs. The problem is most producers don’t think about this loss in weight until sale weights decline in the summer months when it is too late to be pro-active.
So what options are there for maintaining summer slaughter weight? My list has at least 5 items for consideration:
1) Rent more space. If renting space costs $0.15/day and in the worst case scenario you need 6 extra days to recover the lost 8.7 lb (1.45 adg), you have spent $0.90 to get back $2.25 which is a 2.25:1 return.
2) More aggressive use of ractopamine. At one time many producers used this strategy to maintain summer sales weights. However, with many plants now asking for ractopamine-free pigs in response to export customer demands this option may not be available.
3) Higher energy (i.e. added fat) diets to maximize daily gain. Choice white grease and other forms of added fat have been removed from many mid-west swine diets as producers aggressively adopted lower cost of gain alternatives. However, as I computed earlier, you can afford to have a slightly higher cost of gain (upwards of $2.25/pig) in the coming months if you get 8.7 pounds of increased gain to maintain summer sale weights.
4) Other nutritional strategies. I’m not sure of what all of these might look like but at $2.25 per pig it is worth visiting with your nutritionist about possible options.
5) Aggressive cooling strategies. Many producers don’t anticipate summer heat and the first warm days mean a dip in daily feed intake as the pigs respond to temperatures above their thermal-neutral needs. By May 1 the cooling systems need to be ready to function since we know there will be days in early May during corn planting when barns will get warm.