Comparative analysis of the true profitability between genetic multiplication and terminal pig production
In the agriculture industry today, farmers and agribusinesses must continually deal numerous uncertainties and consequential financials burdens. Market prices, both in grains and livestock, have varied quiet substantially over the past five years creating difficulties in risk management and sales. As a means to combat the uncertainty facing the agriculture industry, solid business strategies must be implemented in order to absorb any external impact. Using part of the strategy outlined in The Breakthrough Imperative, an analysis was done on the strategy used by Belstra Group Farms with the goal to determine the true profitability of gilt multiplication. A model was designed to compare the multiplication performance and sales data collected from Belstra Group Farms against a simulated commercial farm generated from industry standards and averages. Data was collected for the revenue from sales and the five main cost differences: feed, labor, medical, carcass, and overhead. By comparing individual groups of pigs for both commercial and multiplication, the difference in profit was able to be calculated. The results concluded that the last five years were more profitable for multiplication given that certain production parameters and sales percentages were met.
Gunderson, Purdue University.
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