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Industry Partners
Prairie Swine Centre is an affiliate of the University of Saskatchewan
Prairie Swine Centre is grateful for the assistance of the George Morris Centre in developing the economics portion of Pork Insight.
Financial support for the Enterprise Model Project and Pork Insight has been provided by:
Optimizing Feed and Farm Management to Market Conditions -Banff 2016
Posted in: Economics, Pork Insight Articles by admin on May 3, 2017
Big picture decisions: efficiency vs. throughput
In large part, this choice depends on the state of the market. In bad times, the focus should be on efficiency in three main areas:
1. Managing cash flow through controlling costs, reducing
capital spending, renegotiating rental or expense
agreements or reducing cash dividend removal.
2. Extending or renegotiating loan terms.
3. Liquidating a portion of inventory to pay down debt.
When you’re making money, it’s best to maximize throughput and weights to reap as much profit as possible. In this scenario, market weights and sow inventory increase, as do diets with the inclusion of nutrients or ingredients to enhance growth rate. These changes should be made even at the cost of efficiency and price increases in order to maximize revenue. In leaner times, efficiency is king, as low efficiency animals are removed, market weights are lowered and diet costs are reduced to obtain the lowest feed cost per unit of gain.
Optimizing Feed and Farm Management to Market Conditions -Banff 2016