ENTERPRISE MODEL HELPS PORK PRODUCERS INCREASE NET INCOME
As part of their unending effort to increase efficiencies in pork production, a group of Prairie Swine Center researchers explored how some of the projects carried out there could help producers reduce their costs and increase revenues. The study shows that if a producer was able to adopt all of the research recommendations made by Prairie Swine Centre over the past 6 years, on average this could increase net income by as much as $33 per market hog.
Lee Whittington is co-author of a new report titled: An Integrated Approach to Developing Strategies For Improving The Financial Competitiveness of Saskatchewan Pork Producers (ADF Project #20030620).
“We went back and took another look at Prairie Swine Centre research done over the last six years with a view to creating a business model—an enterprise model if you will—that would allow the decision-making process around the adoption of new technology to become a whole lot easier for producers.”
Yes, Saskatchewan pork producers find themselves strategically located, in an area with relatively inexpensive feed grains and an abundant land base. This contributes to Saskatchewan being one of the low-cost pork producers in the world.
But due to the global nature of the pork industry, financial competitiveness will always be an essential component of success.
Producers who successfully identify and implement new technologies and management strategies can gain a competitive advantage by reducing cost of production. However, the adoption of new technology may be slowed by perceived financial risks and rewards.
“At the Prairie Swine Centre, we analyzed all the projects that had a financial impact,” explains Whittington, “and we compiled results into a model which basically tells producers how much they will save if they adopt such and such a technology.”
“The Enterprise Model is capable of simulating the financial impact of new technology on farms ranging from 300 sows to 5,000 sows farrow to finish. Not every farm can adopt every research finding. Barn design, labour availability, and access to capital, and too a lesser extent, farm size will have some bearing on which project can be adopted and which cannot. This computer model allows pork producers one more piece of information to make the decision to adopt technology that makes financial sense in their farm situation.”
Bob Drysdale is a Program Manager at Saskatchewan Agriculture and Food’s Livestock Branch. He sees the value of a tool like this.
“In one project alone, just one technological improvement can save $16 per pig. Some other improvements may save less. Some of these technological adoptions may come with a prohibitive price tag for a smaller operation. The important thing is that this research project speaks directly to pork producers, addressing adoption of new technologies based on sound science and financial analysis.
“Often in research, it is difficult to measure the impact of our results on cost-savings. This is one concrete example where pork producers can see for themselves how research brings direct benefits to them, in the language of the bottom line.”
For more information, contact:
Lee Whittington, B.Sc., MBA
Prairie Swine Centre
(306) 667-7447
lee.Whittington@usask.ca
Bob Drysdale
Saskatchewan Agriculture and Food
(306) 787-2256
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