Piggery start-up costs

To start a piggery, you need enough money to cover the costs of buildings, equipment, stock, feed, labour and day-to-day operations until the first pig is sold.

This usually takes at least 5 to 11 months, depending on the age breeding stock are bought and their progeny sold.

Production systems and marketing weight

The production system and marketing weight will influence:

• building design
• infrastructure
• feeding method
• effluent management
• labour requirements.

The system you choose will determine the housing and infrastructure required. For example, weaners need different facilities to baconers, and as the pigs grow, they’ll need to be moved to the right facilities for their size.

Herd size

The capital available and local and state regulations will determine herd sizes.

Local and state regulations

If your operation carries 400 or more standard pig units (SPUs), you require a:

• development permit for the property
• environmental authority for the operator.

The environmental licence states the number of SPUs permitted on the site. One SPU equals 1 grower pig equivalent.

Optimum herd size

There is no ideal herd size, however there are advantages of scale. Large herds make it possible to employ a team of staff to cover for weekends and holiday periods. In recent years, 500 plus sow units linked to weaner and grower facilities in the same ownership have been built.

Investment in computer technology for feeding, environmental control, market selection, health control and data collection has resulted in young skilled staff in key management roles.

Establishing the herd

Whether you're establishing a breeding herd or buying pigs to feed to slaughter weight, you should buy high health stock from a reputable source.

High health status stock will increase the chance of a profitable business by:

• converting feed into meat more efficiently
• reducing veterinary and medication costs.

It’s best to buy stock from the same source to minimise the risk of health issues reducing your income.

If you’re establishing a breeding herd, you should apply a closed-herd policy as soon as possible and rely on artificial insemination for genetic improvement. If you introduce live pigs, you should consider a quarantine program as agreed with your veterinarian.

Pig feed

Pig feed is about 70% of the business costs because it takes 3.75–4.0 tonnes of feed to produce 1 tonne of pig meat.

You can buy ready-mixed feed from stock-feed manufacturers or mix feed on-site. Mixing on-site means you need to invest in machinery, storage and ingredients.

Herd management programs

Measure to manage is the key to successful pork production regardless of the size of the enterprise.

In a small business, you can use cards, notebooks, diaries and spreadsheets to record dates of matings, farrowings, weanings, deaths, sales, feed purchases, treatments and other actions.

For herds committed to APIQ (Australian Pork Industry Quality Assurance Program), the APIQ small holders diary allows all records needed to meet the APIQ auditor’s requirements and the management of the herd, to be kept in 1 well-designed document.

For larger herds there are several computer programs capable of handling large volumes of records required for management of the breeder, weaner and grower herd. Analysed production and financial results are the key to sound decision making, production forecasting, benchmarking and staff motivation.

Margin over feed cost

The margin over feed cost (MOFC) is the cost of feed used to produce 1kg of hot standard carcass weight (HSCW) minus the average pig price. In smaller herds, the MOFC can be a useful indicator of financial performance.

You can use the MOFC to compare different marketing strategies by comparing the sale price of the pig to the cost of the feed to reach a specific weight. Pork production is an unpredictable business, so care is necessary when forecasting future MOFC.

Production or operating costs

With larger business, financial packages and spreadsheets make it possible to record and update the cost of production daily.

Cost of production includes all the costs to produce 1kg of dressed carcass. Some businesses and benchmarking groups record all the costs of producing a kilogram of dressed carcass weight except for interest on capital and depreciation.

The profit or operating margin is calculated by deducting the cost of production (or the operating cost) from the average price received (per kilogram dressed carcass weight) for all pigs leaving the property.

Location and facilities

When deciding where to establish a piggery you should also consider:

• locating the piggery on unimproved or less fertile land (cheaper land)
• access to enough land (owned or rented) to dispose of effluent as required by the environmental licence
• access to a clean water supply, electricity and other services is essential
• locating close to a feed mill, abattoir or sale yard will contain transport costs
• before buying or leasing land on an existing piggery, contact the relevant authority local council or environmental officers for advice.

Workforce and labour

Labour is important in the 7-day-a-week piggery business. The general rule is 1 person for every 100–200 sows and their offspring. The amount of labour required will be influenced by how much automation has been applied.

Environmental management

An environmental management plan will be needed to manage the environmental impacts of the piggery on the surrounding environment, communities and residents.