Technical and economic results of the pig farming industry according to the Farm Accountancy Data Network: financial years 2007 - 2009

Joeri Deuninck, Joost D’hooghe & Andy Oeyen

October 2010

The second report about the technical and economic indicators and economic performance in the pig farming industry has been published. In 2009, the sector benefited from lower costs, although the prices for fattening pigs were also lower at the time. At the end of 2010 dark clouds once again gathered over the industry.

In the new report on the pig farming industry, the cost is emphasised, in addition to family-earned income, and the focus is also on the distribution of earned income and the total costs. This is achieved by comparing the 50% of farms with the highest earned income and the lowest costs with the 50% companies with the lowest earned income and the highest costs. The results are presented for propagation, for the fattening of pigs and for the total number of pigs for (almost) closed businesses.

Compared with 2008 there was a decline in 2009 in the total cost per pig and the total cost per kg of meat (live weight). The total cost including own labour for a 21.7 kg pig amount to 38.3 Euros per pig (-4.4 Euros). The total cost per kg meat excluding own labour is equal to 0.98 Euros per kg (-13 cents) in the fattening sector and 0.99 Euros per kg (-16 cents) for (almost) closed businesses. This is mainly due to the lower concentrated feed price, which also helped reduce feed costs.

In the fattening farms and in the (almost) closed companies, the reduction of the total cost, however, is offset by a decrease in total revenue as a result of the lower price for heavy pigs: 1.11 euro per kg in 2009 compared with 1.20 Euros per kg in 2008. The family-earned income is thus approximately equivalent to that in 2008: 1.31 Euros per heavy pig in pig fattening farms and 13.6 Euros per heavy pig for (almost) closed businesses. Total revenue only decreased to a limited extent in propagation. The family-earned income is higher than in 2008 and slightly positive with 3 Euros per sow. This, however, is not sufficient as compensation for the farmer’s own labour.

The differences are significant from year to year but also among companies. The distribution of earned income and costs is particularly significant in propagation. Many companies in pig propagation succeed in achieving compensation for own labour in 2009. Generally speaking the technical and economic indicators are better for the 50% of companies with the highest earned income and the 50% of companies with the lowest total cost. The difference in total cost is a consequence of lower variable and lower fixed costs. In 2009 the difference is mainly due to feed costs, in absolute terms, and to depreciations in mainly relative value and to a lesser extent in absolute value. In 2008, the difference in propagation and for (almost) closed businesses was primarily due to higher feed costs. In years with a very high concentrated feed price, as was the case in 2008, the importance of feed efficiency (feed conversion) and the concentrated feed price of the company becomes more obvious.

Earned income and the total costs also vary greatly within one year. Traditionally this is largely due to strong fluctuations in the price of piglets and pigs, and since a number of years, also due to the evolution of the concentrated feed price. The pig farming sector, especially propagation and (almost) closed businesses, has experienced a number of difficult years. The situation was dramatic at the end of 2007 and in early 2008. At the time labour income was negative for a few months, meaning that some businesses were even incurring losses. There was some recovery with a few ups and downs. In July to September 2010, the situation once again significantly worsened as a result of falling prices for piglets and fattening pigs and the price increase for concentrated feeds. In the case of propagation and (almost) closed businesses this contributed to a decrease of family-earned income. Family-earned income for (almost) closed businesses in September 2010 was almost zero. This means that the farmer’s own work is not reimbursed.

Original version:

Deuninck J., D’hooghe J. & Oeyen A. (2010)
Technische en economische resultaten van de varkenshouderij op basis van het Landbouwmonitoringsnetwerk: boekjaren 2007 – 2009
Departement Landbouw en Visserij, Brussel.

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