How we Implement MarketingKyle Coble, Ph.D.Senior Manager of Production StrategiesSwine NutritionistNew Fashion PorkJackson, MN

U.S. Leman Conference, September 19th, 2016

Presentation Outline

1) Introduction to NFP System

2) Pig Flow Considerations

3) Market Pig Selection

4) Personnel Training

5) Marketing without Paylean

6) Questions

New Fashion Pork System

• Home office in Jackson, MN• 60,000 sows from Wyoming to Indiana• YTD 1.3 M pigs marketed

• 50% Integrated & 50% Non-integrated sales• Owner member of Triumph Foods• Limited Flex in Spaces (Fixed Space)• Operate mostly wean-to-finish sites• Market on both a fixed-weight & fixed-time

basis

Industry Approach to Profitability

• The swine industry does an excellent job of managing cost (current):1. Feed Cost (60%)2. Weaned Pig Cost (25%)3. Facility Cost (9%)4. Animal Health (4%)5. Trucking (1%)6. Genetics (1%)

• One single event that hopefully pays for the above cost = Marketing

Pig Flow Considerations

Number of spaces needed are determined on:1. Traditional Nursery-Finishing or Wean-to-Finish

2. Intended market weight

3. Sow farm output

4. Mortality

5. Growth performance (seasonality)

6. Biosecurity (depopping sites)

Defining Space

• Each producer defines space slightly different.• Traditional Nursery Barn

• 1.5 to 4.5 ft2 per pig range, average is 2.7 to 3.0 ft2.• Hines and Koch, 1983 (K-State).

• Feeder-to-Finish Barn• 6.0 to 8.0 ft2 per pig range, average is 6.8 to 7.2 ft2.• Flohr et al., 2015; Gonyou et al., 2006.

• Wean-to-Finish Site• 3.50 to 3.75 per pig range, average is 3.50 ft2.• Depends on what you’re targeting for finishing space.• Wolter et al., 2003; Brumm et al., 2000

• Divide total, usable barn space, by the denominator of your desired space target

Space Calculation Example

• Traditional Nursery-to-Finish Barn• 6,000 hd sow farm (3,300 weaned per week at 13 lb)• Nursery performance

• Mortality = 3.5%• ADG = 0.80 lb/d• 7 week nursery turn

• Finishing Performance• Mortality = 2.5%• ADG = 1.85 lb/d• Target weight of 290 lb

Nursery Spaces• 3,300 x 7 = 23,100 spaces needed• Need 23 Nursery Barns OR• Need 7 nurseries that are 3,300 hd each

Finishing Spaces• 3,300 x 3.5% Mort. = 3,185 spaces per wk.• Nursery exit weight = 13 + (0.80 x 46) = 50 lb• 290 – 50 = 240 lb live wt gain needed• 240 lb/ 1.85 ADG = 130 days or 19 wks• 3,185 x 19 wks = 60,515 spaces needed• Need 57 finishing barns (1,050)

Wean-to-Finish Spaces• 3,300 x 7 wks = 23,100 nursery spaces• 23,100 nursery spaces x 50% Double Stock• 11,550 spaces for nursery + (19 wks finishing

x 1650) = 42,900• Need 43 wean-to-finish barns

Finishing Spaces• 3,300 x 3.5% Mort. X 50% Double Stock =

1,600 spaces per wk.• Nursery exit weight = 13 + (0.80 x 46) = 50 lb• 290 – 50 = 240 lb live wt gain needed• 240 lb/ 1.85 ADG = 130 days or 19 wks• 1,600 x 19 wks = 30,400 spaces needed• Need 29 finishing barns (#1,050)

Space Calculation Example

• Wean-to-Finish Barn• 6,000 hd sow farm (3,300 weaned per week at 13 lb)• Nursery performance

• Mortality = 3.5%• ADG = 0.80 lb/d• 7 week nursery turn

• Finishing Performance• Mortality = 2.5%• ADG = 1.85 lb/d• Target weight of 290 lb

Fixed-time vs. Fixed-weight

• Fixed-time is the inability to have slack in your finishing space during the summer.• Barn Utilization (%) will be extremely high in the

summer and “right” during the winter months• Fixed-weight is the ability to achieve a single

targeted market weight.• If you are targeting two packers, than your system

is both fixed-time and fixed-weight• Our system is focused upon both fixed-time

(Packer A) and fixed weight (Packer B).

Possibilities for Approach

• Split-sex pigs upon departing the sow farm.• Gender is separated within barn.• All pigs are placed into wean-to-finish barns with a

7-8 week turn target.• At the end of the nursery phase:

• Barrows are moved to a feeder-to-finish barn.• Gilts remain in the wean-to-finish barn.

• Flex space in and out of your system.• Sell pigs ( weaned pig cost, space).

Advantages to Mixed System

• By leaving gilts on the wean-side, we need less space.• Market on Fixed Weight.• Increase in lean premium compared to barrows.• Most expensive space within a flow.• Slower growing of the sexes.

• Barrows on the feeder-side, requires more space.• Market on Fixed Time.• Wide grid values high quality, heavy pigs.• Input cost for feeder space is less then wean.• Groups are pushed out by the need for space by new feeder

groups, and opportunity loss from increased fixed cost.

Market Pig Selection

• Numerous ways to calculate weight of 1st cuts• Feed intake

• most preferred; health and seasonal dependent• Growth curve• Historical performance

• High value in looking at the pigs• Repeatable and dependable marketers• Trained to a level of precision and accuracy• Barn level inputs, environment, and disease

outbreaks increase variation in market weights that models can’t repeatedly predict.

Effect of Delta Corona Virus on Standard Deviation of Market Weight

12.013.014.015.016.017.018.019.020.0

Stan

dard

Dev

iatio

n, %

Quarter

Flow AFlow B

• 33% Increase

Effect of Delta Corona Virus on Coefficient of Variation of Market Weight

6.46.66.87.07.27.47.67.88.0

Coef

ficie

nt o

f Var

iatio

n, %

Quarter

Flow AFlow B

• 15% Increase

Effect of Delta Corona Virus on Average Daily Gain in Grow-Finish Pigs (% of AVG)

0.90

0.95

1.00

1.05

1.10

ADG,

% o

f Ave

rage

Quarter

• 4% Decrease

Cost of Increasing Market Weight CV

310 lb BW, CV 7% 310 lb BW, CV 8% 299 lb BW, CV 8%$161.68/hd $158.90/hd ($2.78) $150.64 ($3.77)

Managing Space with Disease in Mind

• Need to understand what percentage utilization you are OK with

• De-popping sites will impact • Cost per head for depop = $0.50/hd

Packer A Packer BUtilization

without Depop

Utilization with

Depop

Utilization without Depop

Utilization with

Depop

88.69% 86.01% 87.62% 85.14%

Training the Marketers

• Invest in training and retaining quality people.• Market Animal Selection Training (MAST-Elanco).

• Set up pens of market animals and simulate training.• Select the 5 heaviest pigs in each pen.• After each class, work through the session to determine

why incorrect pigs were selected (tallest ≠ heaviest).• It is OK to incorporate certain aspects of livestock judging.

Training the Marketers

• Invest in training and retaining quality people.• Market Animal Selection Training (MAST-Elanco)

Sum of Total Weight Column LabelsRow Labels Module 2 Module 3 Module 6 Module 7 Module 8 Module 9 Grand TotalActualDoug Owens -19 -29 -13 -200 -10 -32 -303Kyle Coble -52 -85 -18 -43 -10 -45 -253Todd Hassebrock -70 -8 -59 0 -27 0 -164Justin Koski -16 -21 -10 -4 -60 -11 -122Dan Hohbach -27 -73 -74 -55 -12 -26 -267Matt King -72 -30 -45 -67 -10 -55 -279Joe Brockmueller -17 -29 -18 -53 -2 -20 -139Dean Gesche -19 -15 -10 -26 -11 -33 -114Randy O'Neill -26 -34 -27 -126 -13 -2 -228Steve Larson -39 -30 -3 -58 -28 -33 -191Cody Lewis -21 -21 -18 -38 -63 -45 -206Grand Total

Opportunity Weight

MarketerABCDEFGHIJK

Training the Marketers

• Focusing on Barn economics• Most are working to maximize LOAD economics• Understanding how each cut impacts the entire barn

opportunity loss• Provide marketing reports for bench marking

• Each load• Include the major economical drivers (HCW, % grid)

• Incentivize for the right decisions• Moving target• Train your people to adapt quickly and for short terms

Review Problem Barns by Load

• Producers should receive individual carcass information from all sold lots.

0

5

10

15

20

25

# of

hea

d

Carcass Wt., lb

Cut 1

05

1015202530354045

# of

hea

d

Carcass Wt., lb

Cut 3

Review Problem Barns by Load

• Producers should receive individual carcass information from all sold lots.

• If you are trying to maximize weight, need to communicate to the marketer the acceptable number of heavies.

Communicate What is Acceptable

Marketing Audit

Marketing Audit

Marketing Audit

• Need to hold involved parties accountable• Common Audit for Pre- and Post-loading semis• Marketer

• Marketing Service Reports• Preview and Proposed Marketing Strategy

• Contract or Employee Growers• Validation of correct marking of pigs (Location & No.)• Determine the percentage of correct pigs loaded• Unused space opened back up to remaining inventory• Completed after pre-sorting but before loading, then

finalized after loading crew has left for the evening.• Do we incentivize? Do we charge?

Marketing without Paylean

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