Expert opinion

Comparing contracts for finisher pigs

How to get just that little bit more out of the market? Analysing exactly which approach yields most can help, explains pig management expert John Gadd.

The profit box is an excellent idea and one I have used in my farm work for many years. Basically there are 3 reasons for that:

1. Comparisons.

It enables you to compare an existing contract for finished pigs with others on offer. It may, or may not, pay you to change or renegotiate a better deal. From experience of using the concept, I have found the graphs provide 80% of the critical information needed to compare contracts, a great help.

2. It is simple.

The profit box graph is filled-in from your processor’s monthly returns and shows how well you are doing in meeting your contract obligations. You do not have to compile your own figures, as the processor is already doing that as routine in order to assess the size of your monthly payment. Transferring them into a monthly graph shows where improvements in your performance are needed, if any. Simplicity itself.

Finisher pigs being loaded for transport to the slaughterhouse. - Photo: Ronald Hissink
Finisher pigs being loaded for transport to the slaughterhouse. - Photo: Ronald Hissink

3. Other useful information possible.

Assessing the value of new breeding lines under your conditions which may vary from those on which breeders base their claims. We all know that farm and management practices vary. The profit box graphs can evaluate new information product or idea. At a glance – pictures can mean more than figures. The more of these insertions towards the top right hand corner of the box (see Figure 1) reveals any advantages graphically, i.e. quickly. If a change is thought encouraging, then with a few calculations on prices offered against your current situation, then a decision whether or not to change can be made.

Comparing contracts for finisher pigs

Contract comparison for smaller pig producers

Figure 1 shows a simple manually-entered contact comparison for the smaller producer which the farmer or any secretary in the office can do perfectly well every month.

Comparing contracts for finisher pigs

Figure 2 is for the larger unit which is already computerised, in the form of a spreadsheet. In this example, alternative contract details are on view. This shows backfat thickness and cold carcass weight, on which many monthly pay cheques are based, and are superimposed on each other to show where the likely profit lies in each case. The computer, from the number and position of inserts within each box, can be further programmed to calculate the total income from the two sets of entries, as in Figure 1, thus making an all-important financial decision possible.

Research workers – please note, profit boxes refine your findings.

Trouble-free method of recording pig contracts

The profit box concept is a major and trouble-free method of recording finishing pig contracts (most of the work has been done for you) for now and for the future. Give it a try!

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