Page 3 - April 2018

Wake up to weights and vary volumes
I’LL set the scene this month by summarising our global position for 2016 (see Table 1).
Cost comparisons look different to last year due to changes in exchange rates between 2015 and 2016.
While there is noth- ing wrong with a COP of $2.70 if you’re getting $3 for your pork, unfortu- nately this is not generally the situation in Australia at the moment.
COP varies from below $2.40 to above $3 and is most affected in the short term by feed costs, which vary from less than $350/tonne to above $450/ tonne.
While it’s difficult to do much about grain/feed costs, except use the feed more efficiently, the great- est opportunity for reduc- ing COP lies in volume and this is independent of grain price and hence more under your control.
I discuss this in more detail below.
Feed costs were general- ly higher in Australia, but there is some relief, with the exception of Queens- land in 2017, and it’s look- ing similar for the start of 2018 at least.
Great Britain was the biggest improver in COP from 2015, due in part to lower feed cost and im- provement in HFC from 3.85 to 3.67.
GB also marginally im- proved volume sold/sow/ year and you will note had lower other costs than us.
The larger than usual difference in costs be- tween Australia and GB
Initiatives
was also influenced by the exchange rate, as the British pound weakened against our dollar and most currencies in 2016.
On the other hand, GB reported improved COP, expressed in local cur- rency, of 19.2 percent be- tween 2013 and 2016. HFC competitive
For HFC we’re competi- tive with all other coun- tries except the Nether- lands, which has tended to lead the world in this KPI for the past five years, during which time HFC has remained relatively constant globally.
The best three herds in our benchmarking project averaged 3.48 for HFC in 2016.
At average feed cost, this represents a nine cents/kg carcass weight lower COP than the average.
Given we generally have higher feed costs than most other coun- tries, it’s important to target HFC and do eve- rything possible to mini- mise feed wastage and ensure pigs are fed with maximum efficiency.
Aside from Denmark and the Netherlands,
we’re not that far behind in pigs sold/sow/year, due in part to our good wean- sale survival compared with the US and even Denmark.
Looking at born alive, we’re consistently achiev- ing 12.5, which is similar to the UK.
The average for the EU is13.8–weneedtogetto 13.5 and I think we’re on the way.
I say this because the best Australian herd in Pork CRC’s benchmark- ing project reported 12.8 born alive and weaned 11.3 per litter in 2016- 2017.
Also, at the recent SA Pig Industry Day several producers reported wean- ing 11-plus pigs per litter.
I would not have be- lieved this possible five years ago.
Fat chance
The ‘problem’ and great- est opportunity is carcass weight and volume sold/ sow/year.
We have the lightest car- cass weight and carcass weight sold/sow/year of all countries in the com- parison.
The difference in vol-
ume across the countries is reflected in costs other than feed (see line four in Table 1) where we are 23 percent higher than the next most expensive (the Netherlands).
The low carcass weight in Australia reflects re- tailer demand.
Even if they are will- ing to cover the addi- tional production costs (a minimum of 32 cents/ kg), it causes inefficien- cy through the supply chain, making it difficult for Australian producers to compete in a globally competitive market.
It may not look like it from the table, but we’re seeing consistent improve- ments in sow productivity, with better herds in the Pork CRC benchmarking group weaning 11 piglets/ litter and 26/sow/year.
If we get our average to this, we will take nearly 20 cents off other costs and this will be independ- ent of feed cost or carcass weight.
If we can get carcass weight up 5kg, we could reduce other costs by an- other eight to 10 cents.
The good news is Rich- ard Horsham from Primo said at the SA Pig Indus- try Day that Primo was increasing carcass weight. Champion data
While things aren’t all going to happen at once, these are relatively small changes with potentially big outcomes.
Researchers will address further improvement in pigs weaned and sold, but we have champions out there to learn from.
How do they wean 26-plus/sow/year?
The carcass weight ‘is- sue’ is best addressed at a business level.
The Brits did it by work- ing with likeminded re- tailers, which we too can do and Primo might be leading a welcome change.
Effects of pigs sold/sow/ year on costs other than
☛ continued P4
Pork CRC and APRIL chairman Dennis Mutton is turn- ing up the heat on Australia’s pork industry, including researchers, to come up with better ways of doing everything.
Getting carcass weights up 5kg could reduce other costs by eight to 10 cents, according to Roger Campbell.
by DR ROGER CAMPBELL CEO
Country/KPI
AUS
US
Canada
Denmark
NL
GB
COP
2.70
1.56
1.81
2.10
2.34
2.29
Feed ($/tonne)
365
256
314
328
370
340
Feed ($/kg CWT)
1.38
1.02
1.22
1.22
1.27
1.25
Other costs ($/kg CWT)
1.32
0.54
0.59
0.88
1.07
1.04
HFC
3.73
3.97
3.87
3.70
3.43
3.67
Pigs weaned/sow/y
23.9
25.7
23.2
32.1
29.8
24.8
Pigs sold/sow/y
22.8
23.4
21.9
30.8
28.4
23.2
Carcass weight (kg)
76.5
94
99.3
84.2
93
82
Carcass/sow/y (kg)
1687
2202
2178
2531
2640
1901
Wean-finish mortality (%)
4.4
9.02
5.5
6.4
4.8
5.04
Table 1: Business and performance indicators for selected countries in 2016.
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Australian Pork Newspaper, March 2018 – Page 3