Budget and Labor Issues
Table 4 shows cost ranges for labor, operating, and fixed costs. In addition, carcass quality can affect the price offered by a packer. Knowledge of these items will enable producers to strategically compare hoop buildings to other options. Fixed costs are calculated at 13.2% of total investment for confinement and 16.5% for hoops. Confinement facilities are depreciated over 15 years (6.7% annually), while hoops are depreciated over 10 years (10% annually). An interest rate of 10% is assumed for both systems (5% of initial investment). Bedding cost is at the rate of 200 lb of cornstalks per pig. Feed efficiency difference of 0.2 between the hoop and confinement system is based on previous studies and swine producer observations.
Table 4: Estimated costs. Based on Table 4, Hoop Structures for Grow-Finish Swine, AED-41.
Labor requirements. Labor requirements are a highly variable input to swine production systems. Labor varies from farm to farm depending on the layout, level of automation, age and condition of facilities, and other factors. Table 4 also shows some estimated amounts of labor for various tasks. Frequently, production systems with solid manure are viewed as systems that require more labor than production systems with liquid manure. In hoop structures with full-width end access and large bedding bales handled mechanically, the amount of labor required is comparable to the labor needs of conventional systems. Labor needs with hoop structures are probably slightly more than they are in new, well designed confinement systems primarily because large bales of bedding must be hauled and placed into the hooped structure. This difference is estimated at 0.1 hour more per pig.
The type of labor, however, is quite different for hoop structures. It includes bedding the pigs, checking the pigs, and bedding pack clean out. Walking the bedding area daily to check pigs is crucial; with large groups of deep-bedded pigs, consistent observation of pigs is critical for success.
Cost analysis. Table 5 shows a cost analysis comparing confinement and hoop buildings. Costs vary depending on location and availability of materials, so you are encouraged to prepare your own budget in the Your Estimate column with values that reflect your operation. Use Table 4 to help estimate your costs.
Table 5: Market swine cost comparison. Based on Table 5, Hoop Structures for Grow-Finish Swine, AED-41.
The comparisons in Table 5 use a cost of $180 per pig space for a confinement system compared to $55 per pig space for a hoop structure. Each system has 2.8 groups of pigs produced per year. Investment in manure and feed handling equipment is the same for each system. Again, depending upon alterations in system design, location, etc., these values may differ for your operation.
Fixed costs are calculated at 13.2% of investment for a confinement facility and 16.5% for the hooped facility. The interest rate is 10% (5% on average investment), with insurance and taxes at 1.5% for both facility types.
Life expectancy, on average, is 15 years for a confinement building. Because the use of hoop structures as swine housing is a relatively new practice, life expectancy data are not complete; the best estimate is that hoop structures will last at least 10 years.
Feed, repairs, bedding, etc., are based on Iowa State University data. The bedding cost is for the rate of 200 lb of shredded cornstalks per pig. A 1,200 lb bale at $12.00 per bale provides a cost of 1￠ per lb. Interest is at 10%, covering 4 months for the feeder pig and 2 months for the other operating costs excluding labor.
Feed efficiency is 3.1 lb of feed per pound of gain in confinement and 3.3 lb for the hoop facility; for a difference of 0.2 lb more for the hoop structure. Studies have shown an annual difference of 0.1 lb to 0.3 lb. Location can affect these values, as feed efficiency tends to be affected the most during the winter months in the northern climates. Labor requirements, including manure removal, are assumed to be 12 minutes per pig for confinement and 18 minutes per pig for the hooped structure.
A lean premium of $1.50 per pig is based on less backfat of 0.1 inches for pigs in the confinement system. This would provide a premium of $0.60 per CWT live weight or $1.50 for a 250 lb pig。