2. Finisher Close-outs John Deen University of Minnesota Swine Center

3. The frustrations: the variability of weights of pigs within a barn the complex pricing grid given by the packer the cost of both maintaining the pigs and the barn the lack of records of contributions to value The work

4. What can you do? Find an understanding packer Sort out heavy pigs Run barns longer Revise barn design Reduce variation Find alternate markets for lightweight pigs

5. Proportion sold at lights weights

6. Rule # 1: shipping is an end decision, not an overall strategy. averages are not applicable in most cases decisions are made on marginal economic performance, usually marginal profit

7. Rule # 2: Building costs and other fixed costs are only important in capacity decisions. most marketing decisions should ignore fixed costs marketing decisions must focus on opportunity cost in marketing decisions this involves the opportunity cost of not marketing a pig or conversely marketing a pig earlier in AIAO barns this involves the opportunity costs of closing out a group

8. Is it weight accuracy or timing Weight accuracy by eye:  Absolute is poor  Relative is good  Can people sort out the heaviest pigs?  Is sorting forced by space requirements? Timing of trucks often not in response to season

9. Proportion light and heavy pigs

10. Why are differential payments weight- based Lower potential margins on small carcasses Low prices for small primals Increasing supplies of small carcasses Inability to modify processes to fit varying carcass size Association with more lesions

11. Carcass vs Primal Values

13. Losses Not cost of production Mostly opportunity costs  Margin over feed costs Resocialization  Especially in small pens

14. Financial effects Sort loss Opportunity costs Consistency bonuses Alternative rearing systems for slow- growing pigs

15. Determinants Variation of weights Grid Change in carcass over weight Performance effects of sorting Close-out schedule, profitability Costs of sorting

17. What is quality in market pig production? contaminant free ethically produced lean good color and water-holding capacity Ease of processing consistent in characteristics, flow and delivery

18. Why is consistency important? ease of further processing ease of production refinement of inputs reduction of risk increase in demand

19. Proportion sold into target range

20. Components of variation of profits

21. Distributions differ

22. Definitions Lightweight pigs are either too young at time of market or have not met their expected growth rates Amplified by restricted capacity and little flexibility to address these pigs Age is a minor problem when pigs are raised in age cohorts Slow growth in a proportion of pigs that is too small to justify maintaining those pigs while underutilizing the capacity Do not meet consumer requirements

23. Unmeasured costs Feed conversion Treatment costs Mortality rates “Typhoid Mary” effect Sorting costs Input costs Planning costs

25. Why are differential payments weight- based Lower potential margins on small carcasses Low prices for small primals Increasing supplies of small carcasses Inability to modify processes to fit varying carcass size Association with more lesions

26. Carcass vs Primal Values

29. Equation for calculating the quality loss of a product. The further the product is from its target state, the greater the loss will be. Definition: Loss function

30. Marginal Curves

31. Loss function of market hogs

34. Definitions Lightweight pigs are either too young at time of market or have not met their expected growth rates Amplified by restricted capacity and little flexibility to address these pigs Age is a minor problem when pigs are raised in age cohorts Slow growth in a proportion of pigs that is too small to justify maintaining those pigs while underutilizing the capacity Do not meet consumer requirements

35. Total margin over feed costs

36. MOFC for a single pull system

37. MOFC for a multiple pull system

38. Things to do: Reduce losses when lightweights occur  Retain pigs  Sell to alternate market Prevent variation in growth rates  Disease control  Feed intake enhancement  others