Trade and Economics

Swine Cost of Production Model for Manitoba

Manitoba Pork has worked with MNP, an accounting and consulting company, to develop different model farms to generate cash flow projections and trial balance sheets to provide some insight into the economics of the industry. Click on the links below to access information on:

1. Farrow-Finish (600 sows)
Monthly cash flow to Dec 31 2016
– Monthly cash flow to Dec 31 2017
– Projected financial statements to Dec 31 2017

2. Sow-Isowean (1500 sows)
Projected financial statements to Dec 31 2017

3. Finisher Barn (6000 finisher places)
Projected financial statements to Dec 31 2017

4. Assumptions for each of the models

5. Summary update sheet for January 2017

Remember that these are an informed estimate of the cost of production for different systems. Every producer will have different numbers for their particular situation. Manitoba Pork encourages producers to create their own comparative numbers, and obtain professional advice on how best to interpret the results.

Hog Production in Canada

With revenues amounting to over three billion Canadian dollars, the pork sector accounts for 47 per cent of total livestock shipments and for 17 per cent of all farm cash receipts.

Hog production is a vital component of Canada’s agricultural economy. Each province shares in this production in quality and in volume. Canada is favoured with adequate grain production allowing for selective, controlled feeding and with reasonable feed costs.

Virtually all commercial hog production in Canada takes place in a controlled environment which implies that, at all times of the year, animals are kept in buildings specialized to the farrowing, growing and finishing stages of raising market hogs. The most common hog production unit today is a specialized farrow-to-finish operation of 200 to 250 sows, which can be managed efficiently by a single family. Farrow-to-finish significantly reduces productivity losses associated with stress of movement, adaptation to new environments, changing feed regimes and transmission of diseases. Also, producers can monitor the performance of animals through to maturity, thereby observing final results of breeding programs and other management practices.

Healthy quality breeding stock is the cornerstone of our hog industry. A strong infrastructure is in place and working in Canada to co-ordinate the ongoing program of swine improvement. In 1984, Canada introduced a sow productivity and management system and for the last three years, our sow productivity improved 11 percentage points compared to other leading hog producing countries recording increases of 1 to 2 percentage points.

CANADIAN HOG PROCESSING INDUSTRY
The meat industry is Canada’s second largest industry with recorded sales of CDN $23.6 billion in 2011 and 68,468 employees. The nation-wide industry has a major presence in all regions, but is more heavily concentrated near livestock production centres for hog processing and near major population centres for pork processing. Pork accounts for approximately 40 per cent of total Canadian meat production.

Trade
As Manitobans consumed only 6 per cent of the total pork (retail weight) produced by slaughter plants in the province in 2011 and about 5 per cent of the estimated total Manitoba-origin pork equivalent of almost 418 million kg (retail weight) (including exported pigs converted to finished pork retail weight) sold in 2011, most of the pigs and pork produced in Manitoba had to be sold to other provinces or countries.

PIG SALES AND FARM CASH RECEIPTS
Pig Sales:

Net pig sales were slightly over 8.14 million head in 2012, of which more than 3.61 million head or 44 per cent were sold out of the province.

Mandatory Country of Origin Labeling (COOL) in the United States resulted in reduced demand for Manitoba weanlings and feeder pigs by U.S. finishing operations as some major hog slaughter plants refused to kill Canadian-born pigs. Since peaking at 4.48 million head in 2007, weanling pig exports fell each year until 2011. Due to the Manitoba government ban on new barn construction or expansion in the province, some weanling pigs that would have been exported to the U.S. have had to be fed elsewhere. About 200,000 Manitoba weanling pigs were finished in other provinces, mainly Saskatchewan, in 2011.

Manitoba pig producers and brokers exported over 0.4 million slaughter hogs and almost 3.6 million weanling/ feeder pigs directly to the United States in 2012. In the early 1990s, more Manitoba pigs were shipped east than to the U.S.

Demand for local hogs by Manitoba pork processors has improved, but about one-fifth of hogs slaughtered in Manitoba come from Saskatchewan and Alberta. Over 4.27 million Manitoba hogs were killed in Canadian federal and provincial plants in 2011, all except 0.07 million in Manitoba. This was down 0.01 million hogs or .23 percentage points from 2011 and a rise of 16.2 percentage points from 2007.

Farm Cash Receipts from Pig Sales:
The swine industry was the largest source of farm cash receipts of any Manitoba agricultural commodity sold from 1999 to 2007, but record high crop prices raised cash receipts from sales of both canola and wheat in 2008 and 2009 above those from pigs. Pig receipts were second only to canola in 2010 and 2011.

According to Statistics Canada, pig sales contributed 17.7 per cent of Manitoba’s farm cash receipts from the market (excluding direct program payments) in 2011. The share is down from 31 per cent in 2005. Fewer pigs sold and low average net pig prices reduced farm cash receipts from the sale of pigs from $802.9 million in 2007 to $701 million (author’s estimate) in 2008 and $719.2 million in 2009. Increased pig prices raised receipts to $925.1 million in 2011 and $914 million in 2012.

Future:
Cash receipts from pig sales are expected to rise in 2012 due to increased sales and higher average pig prices.

 

Chop Talk – Issue #6-2017Apr 13th, 2017

In this issue of Chop Talk:   AGM 2017: It’s a wrap! Annual Banquet 2017: An evening to remember; Nutrient ban lifted; KAP’s carbon policy; Careers. Read Online: Chop Talk – Issue #7-2017 – April 13, 2017       …

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April 11, 2017 (Winnipeg MB) – On April 5, Manitoba pork producers and industry partners gathered for the 2017 Manitoba Pork Annual General Meeting and Banquet. The highlight of the event came when Chair George Matheson presented a cheque for …

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Thursday, April 06, 2017

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Swine Cost of Production Model for Manitoba

Tuesday, March 07, 2017

Manitoba Pork has worked with MNP, an accounting and consulting company, to develop different model farms to generate cash flow projections and trial balance sheets to provide some insight into the economics of the industry. Click here to access information on: …

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