REPRODUCTION
PIH-45
pork industry handbook
COOPERATIVE EXTENSION SERVICE • PURDUE UNIVERSITY • WEST LAFAYETTE, INDIANA
Economics of Reproductive Performance and Breeding Herd Management
Authors
Emmett, Stevermer, Iowa State University
Wayne Singleton, Purdue University
Al Mueller, University of Illinois
Reviewers
John Chalmers, Oakford, Illinois
Richard Fowler, University of Delaware
During the summer of 1977 it was costing about $29 to produce a 40-lb. feeder pig if one did not deduct the salvage value of breeding stock and tax savings on breeding stock sales. This production cost can be achieved with feed costs of 6-7 cents per pound and with the use of modern facilities and equipment if one can obtain 1.7 litters per female in the herd and 8.0 pigs weaned per litter. While these production goals are higher than the national average of 1.5 and 7.3, respectively, they are realistic.

These figures can be determined for your herd by dividing the total number of pigs weaned per year by the number of farrowings during the year; and by dividing the total number of farrowings that occurred during the year by the average number of females in the herd. The average number of females in the herd is determined from monthly inventories, and gilts are included in the inventories from the time they are 6 months of age. The accompanying Monthly Breeding Stock and Production Inventory Record will be helpful in measuring your herd’s performance.

Salvage Value of Breeding Stock
About 50% of the costs of producing a 40-lb. feeder pig are feed costs. Most of this is feed cost for the breeding herd. However, some of this feed cost is recovered in weight gain, since the sow enters the herd as a 220-lb. replacement gilt and accumulates 150-300 lb. additional weight during her productive lifetime. Admittedly, some sows die, and the salvage value per pound decreases as the sow gains in weight; but nonetheless, salvage value of the home-raised breeding stock reduces the net cost to produce a weaned pig.

A gilt normally gains more weight during gestation than a sow because she is still growing. Thus, the cost of producing pigs out of gilts is not as high as it would appear to be based on the number of days in the breeding herd and the litter size produced. Studies indicate that gilts are in the
herd about 270 days by the time they wean their first litter, and that they wean about 6.6 pigs per litter. Sows average 208 days in the herd, per litter produced, and wean about
7.9	pigs per litter during their second and subsequent litters.

Depending on market prices, gilts increase in value by $25-75 from the time of their selection as 220-lb. replacement gilts until they are sold as packers at weights of 350-500 lb. This $25-75 value increase can be considered either additional income or can be used to defray the cost of producing weaned pigs. Dividing the value of the increase by the number of pigs produced during the sow's lifetime gives the value on a per pig basis. Since most of the increase in value occurs during the first litter and since the number of pigs per litter is usually less than 7, the value per pig is considerably higher ($3-5 per pig) than it is for pigs from sows that are kept for as many as 4 litters and produce more than 30 pigs.

Tax Savings
Using the cash basis for reporting income, our federal tax system allows a producer to pay a much lower rate of federal income tax on the income from the sale of raised swine breeding stock which is held 12 months or more. This item markedly influences the after-tax cost of producing feeder pigs and tends to encourage producers who are in the higher income tax brackets to maintain young breeding herds.

Income from the sale of breeding stock for a 1-litter system and for a 4-litter system can differ considerably, as shown in Table 1.

Adding to this tax saving advantage of the 1-litter system is the added tax paid on the profit from the sale of
6.9	additional pigs with the 4-litter system.

The net effect of the increase in salvage value and tax savings at the above production rates and prices is about $7.50 per pig advantage for the 1-litter system. This
Cooperative Extension Work in Agriculture and Home Economics, State of Indiana, Purdue University and U. S. Department of Agriculture Cooperating. H. G. Diessiin, Director, West Lafayette, Ind. Issued in furtherance of the Acts of May 8 and June 30, 1914. It is the policy of the Cooperative Extension Service of Purdue University that all persons shall have equal opportunity and access to its programs and facilities without regard to race, religion, color, sex or national origin