What’s the Best Farm Size? By Todd Thurman

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Chinese mega producer Muyuan recently announced plans to develop the largest swine farm in the world. They intend to raise 84,000 sows and the associated growing pigs on one site in a series of multilevel buildings. I am on the record with my sincere doubts that this represents the future of pork production and my concerns for the logistical challenges a site like this represents. I recently discussed this new farm in a LinkedIn post that can be found here.

In a comment on my LinkedIn post, a former colleague asked a simple but profound question: “what is the best size for a farm?” I gave her the consultant’s favorite response…it depends. The real answer to the question is far too complex for a social media post or even to be fully discussed here, but I’d like to shed some light on some factors that should be considered and a framework for working through the process.

I do system design work for clients around the world. System design is simply mapping out how many farms of which type and size will be required and roughly where they need to be placed. The first step in this process is to determine the size of the overall system. This is determined by the goals for the project so the first question I ask clients is why they’re building the system in the first place. Once that’s been determined, I then go on to consider two other types of factors…logistics and risk.

First, let’s discuss the goals of the project. While it might seem straightforward, the reason the system is being built can have a profound impact on determining the best system design. Producers build farms and systems for a variety of reasons. Some are trying to fill a certain quota at a harvest facility, some are looking for a way to market grain they already produce, some are just looking for a return on an investment and still others simply want to produce manure to reduce or eliminate the need for commercial fertilizer on a crop operation. Once we’ve established the goal, we can determine how many pigs we need to produce to achieve those goals and how many commercial sows and replacement gilts we’ll need to supply the pigs.

Now that we’ve established how many sows and pigs we need, we need to consider how many farms we’ll have and how big they’ll be. This involves a deep analysis of both logistics and risk. First, let’s discuss logistics. Here is a list of logistical considerations that we need to evaluate:

  •  Animal Transportation: The size of available trucks/trailers and the distance between farms and from farms to harvest plants.
  •  Feed/Ingredients Transportation: Size of available trucks/trailers and the distance between farms and feed mills and between feed mills and ingredient sources.
  •  Environmental & Natural Resources: Availability of clean water, proximity to water sheds, flood risk etc.
  •  Labor: Access to a sufficiently large supply of quality labor.
  •  Legal/Regulatory: Legal limitations, permitting requirements, odor concerns etc.
  •  Genetics: Availability of replacement gilts and semen.
  •  Land Availability: Number and location of suitable construction sites.
  •  Construction Cost: Cost of different types and sizes of facilities.
  •  Herd Health: Population health is about maintaining a consistent health status. This can become more difficult as farm sites get larger as sub populations with differing health statuses can emerge. Biosecurity logistics are also very different depending on farm size. Larger farms often have bigger logistical challenges but they also tend to have larger biosecurity budgets to work with.

Depending on the situation, there may be even more considerations and there’s certainly a lot more detail under each of these headings, but I think that’s a good overview.

Oftentimes, logistical needs conflict with one another. When that happens, we have to find the best overall solution which means we often have to compromise on one factor to accommodate another. For example, we may decide that we have to use a farm size that results in a less than optimal transportation efficiency in order to accommodate environmental regulations or we may decide to accept higher animal transportation costs in exchange for lower feed transportation costs.

All of these logistical considerations have to be evaluated in the context of the last major factor…risk. Given a fixed system size, the more animals we have on one site, the fewer sites we have. That means if something goes wrong on that site, the impact on the overall system will be higher for larger farms and lower for smaller farms. Most often, we evaluate this risk based on animal health risks but it equally applies to other risks such as fires, natural disasters, legal issues etc.

When I’m evaluating risk, I become the world’s worst pessimist. It’s my job to imagine what could go wrong and evaluate how that would affect the entire system. I will ask questions like “what if one of your sow farms breaks with a foreign animal disease and has to be shut down for a year or more?” Risk is a subjective thing. What I consider an acceptable level of risk may be very different than someone else’s idea of acceptable risk. As a consultant, it’s my job to provide insight and direction and sometimes my own opinion if it’s asked of me, but it’s ultimately up to the producer to decide what level of risk is acceptable.

To help illustrate this point, here are two separate comparisons that show how system design can affect risk:

Comparison #1

System A and B both have farrow to finish farms and have approximately 12,000 sows total. System A consists of two 6,000 sow farms and System B consists of 6 2,000 sow farms. If each system has one farm affected by a natural disaster that requires depopulation and repair, System A loses 50% of its production and System B loses a little more than 15%. System A almost certainly has some efficiency advantages due to the size of the farms, but those advantages must be balanced with the added risk of having a higher percentage of production on any single farm.

Comparison #2

System A and B both have 15,000 sows total. System A has three 5,000 sow farrow to finish farms and System B has three 5,000 sow farrow to wean farms with many off site wean to finish sites. If each system has a farm break with a major disease challenge requiring depopulation, System A is affected dramatically by losing one third of their overall production for at least a year. System B is less significantly affected but the actual impact depends on the type of farm that is infected. If it’s a sow farm, they lose those sows and the production on that farm until it can be repopulated but still retain the pigs on the existing wean to finish farms and can possibly procure weaned pigs to stock the existing wean to finish facilities until the sow farm is back up. If the farm they lose is a wean to finish farm, the overall impact on the system is minimal.

As you can see, farm size is important but it is only one component of an overall system design. The reality is that most systems are not well planned. Producers often just repeat previously successful designs or copy those of other producers. Ask a producer why they built a 5,000 sow farm and the honest answer is often something like, “everyone around here builds 5,000 sow farms.” Every system and every farm is unique however, and a thoughtful system design process can ensure that the most appropriate size and type of facilities are used to achieve the business’s goals in the most efficient and risk-acceptable manner possible.

About the Author: Todd Thurman is an International Swine Management Consultant and Founder of SwineTex Consulting Services, LLC. SwineTex is a US-Based provider of consulting and training services to the global pork industry. To learn more about SwineTex Consulting Services, send an email to info@swinetex.com or visit the website at www.swinetex.com.

 

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