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What does the future hold for the land base farrow to finish guy? 5+ years down the road
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agricon
Posted 7/19/2012 23:45 (#2495705)
Subject: What does the future hold for the land base farrow to finish guy? 5+ years down the road


Getting a little frustrated over thinking about the future for land base farrow to finish and need some fresh second opinions especially ones from people that work in the ontario pork industry.

As we know the past 5 years have been some interesting times in the pork industry from record lows in 2009 to record highs in the past two summers, a long with strong feedstock prices such as corn and soymeal. Overall it seems that the land based farrow to finish guys have survived it well.

I am in the transition of taking over our family operation which is a 650 sow farrow to finish operation with more than enough land base to support it self as far as corn goes. Here is my frustration and I hope I can type it out in an understandable fashion. In the past the hog industry has been good to us, it has helped us pay for many farms, grow our land base and remain highly competitive with our cropping operations mainly because of the manure, use of equipment etc. As time has went on the gap of making a profit feeding corn to pigs vs growing corn to sell to market has closed even for the land base pork producers in recent years. It almost seems better to quit pigs like many other land base farrow to finish operations are doing around here and just row crop farm, selling corn for 8 bucks as there is a lot less risk and hassle in producing just grain vs having to manage hogs and buy $600 meal.

I always believed and so does my father that the only profitable way of producing pork is farrow to finish with land base and lately it seems we are not more competitive to those who buy corn for 8 when we could sell it for that and be done with the risk and hassle sure we make some extra on top but is it wroth it. So is this trend going to continue? What does the future hold for the family operated land base farrow to finish operation? Just looking for opinions.

I am asking this because I am at a cross road at this point at home we currently have a few major problems that need to be sorted out by me in order for the the next generation (me) to continue the swine part of the operation. My original goal when entering ag business college was to maybe one day expand to 1200 sows as we have the land base to do it and I always enjoy the management challenges it presents plus we as a family are talented at producing pigs.

So here are my main issues

1. We are either going to need a new sow barn or to spent a pile of money fixing and repairing the old one that is already poorly setup because it started out as 100 sow barn.
2. We like to be able to market hogs into a heavier grid from 90kg carcass to 100kg carcass which I think is the future for our operation, I need enough space to finish 17000 hogs a year which I barely have enough space now for let alone 100kg carcasses , so we going to need more grower or finishing space to make it work, contracting out space is not an option for us and we are already packing the barns. Cutting back sows is not an option either for several other reasons.
3. The whole loose housing of sows debate is in the back of my mind too and that is going to require more sow barn space that I don't have now.

So here are my solutions that I can come up with,

Option 1, Stop spending money repairing the sow barn, run it into the ground and move to just row crop farming and contract finishing as there is no point spending money on something that is not going to increase your ROI down the road over just straight row crop production

Option 2, which I prefer, if it seems to be better prospects on the horizon would be to build a new 600 sow barn on a new site that is built in a way that I would double the size if the opportunity arises and that is ready in event of loose housing becoming a market demand, then convert the old sow, farrowing and weaner barns into grower space that way I would have the space to finish heavier carcasses and on the same token, instead of having to build 1500 more finisher spaces in my case to accommodate the heavier carcasses , I would use that money towards a new sow barn that does not eat me alive in repair costs.

So I am just asking for an extra opinion, most of what I can gather points to a more profitable future in pigs for my situation but I am stilling looking for second opinion that are not from some old about to retire hog farmer that says hell with it just grain farm,


TIA







Edited by agricon 7/19/2012 23:49
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