Changes in Management for Pork Contracts Tim Safranski State Swine Breeding Specialist (573)

Contracting Reduce fluctuation in cash flow Decrease risk (i.e. shared) Share costs Have a guaranteed market Access to $$$

Contractor or Contractee?

To contract, or not to contract…. Predictable cash flow

To Contract, or not to contract…. Predictable cash flow Forces record keeping Predictable cash flow Forces record keeping

To Contract, or not to contract…. Predictable cash flow Forces record keeping Production plan and outside assistance Predictable cash flow Forces record keeping Production plan and outside assistance

To Contract, or not to contract…. Predictable cash flow Forces record keeping Production plan and outside assistance Strict biosecurity Predictable cash flow Forces record keeping Production plan and outside assistance Strict biosecurity

To Contract, or not to contract…. Predictable cash flow Forces record keeping Production plan and outside assistance Strict biosecurity Facilities meet minimum standard Predictable cash flow Forces record keeping Production plan and outside assistance Strict biosecurity Facilities meet minimum standard

To Contract, or not to contract…. Predictable cash flow Forces record keeping Production plan and outside assistance Strict biosecurity Facilities meet minimum standard Waste control is legal Predictable cash flow Forces record keeping Production plan and outside assistance Strict biosecurity Facilities meet minimum standard Waste control is legal

To Contract, or not to contract…. Predictable cash flow Forces record keeping Production plan and outside assistance Strict biosecurity Facilities meet minimum standard Waste control is legal Consistent genetic source Predictable cash flow Forces record keeping Production plan and outside assistance Strict biosecurity Facilities meet minimum standard Waste control is legal Consistent genetic source

Other Considerations Finisher –mixed sex –feed supplied, how to sell corn? –incentives Farrow –replacement rate/culling decisions –breeding system (P = G + E + GxE) –incentives

Litter Size Weaned

Other Considerations Continued Reliability of other party –company –another farmer Personalities Specialization of labor Long-term asset, short-term contract? IPPA Swine Contract Approaches –(section 5 in notebook) NPPC Guide to contracting

Thoughts for Extension Personnel Who are we working for? What is our role? Are costs of production known? Are goals known?

Standard Normal Distribution Standard Deviations From Mean frequency