THE PIG. INDUSTRY.

Manawatu Standard, Volume LVII, Issue 158, 5 June 1937, Page 5

THE PIG. INDUSTRY.

FACTOR OF OVERHEAD COSTS. (Notes by M. J. Scott, TLA., B.Se.) It often happens that a man’s knowledge of pig keeping is an accumulation of unfortunate experiences that cause him in the end to leave .pigs alone. These experiences are sometimes the result of wrong, information, somtimes ot bad judgment, but since judgment is usually just as poor as the information available on the point, then poor information can take the blame ior most mistakes. Costs in pig keeping, through not being reckoned with, otten upset calculations, and eventually upset balance sheets. For the purpose of this article overhead costs will include all costs other than the cost of iced supply. Based on a farm carrying pigs only, and on the assumption that one man with suitable equipment can attend to fifty sows, producing mixed pork and bacon, the following costs might be incurred

CAPITAL EXPENDITURE. \ 50-Sotv Pig Farm. Eight acres land £IOO to £1320 Forty sties or iaronving pens—£4oo to £SOO Fencing 40 one-fifth acre sections or pens £IOO to £240 Water supply £4O to £SO Utensils, troughs, and equipment—£3o to £IOO Motor truck £2OO to £3OO Sows and boars £3OO £3OO Totals £1290 to £2140 ANNUAL EXPENDITURE. Interest on capital at 5 per cent.- — £O4 to £lO7 Depreciation £39 to £O6 Running expenses, truck . £l2O to £IBO Wages £l5O to £2OO Totals £3.3 to £553 Depreciation has been charged at 10 per cent, on the motor truck, and at 3 per cent, on buildings and equipment. This latter may be slightly greater than the standard rate, but it looks very conservative for pig equipment. Five per cent, would probably be nearer the mark. No depreciation has been charged on live stock lor the reasons that a chopper may be sold for the same price as a hacoiier, and that breeding stock may bo kept up to strength by retaining the best sows when these nave attained bacon weights. Running expenses for the motor truck, have been charged at only sixpence per mile, because depreciation and interest are alteady charged under other headings. Ovethcad costs are often quoted by English writers at 20 per cent, ol total turnover, and it is often wrongly assumed that this figure is a standard that does not vaiy. It will lie appreciated that since overhead costs are more or less constant on any farm, and since tlio total return varies with the price? received for pig meats, then the percentage that overhead is of the total return must vary also. In the statement set out above, overhead costs at £373 for 50 sows amount to £7 10s per sow. The return from a sow producing 12001 b of pig meats at 3d per pound is £ls, and overheads ate then 50 per cent. At 5d per pound ter pork, overheads are 30 percent., and when pork is 8d per pound, overheads are 17) per cent. This lower percentage seems to reflect the conditions that make overhead costs 20 per cent, in England. OVERHEADS ON A PER PIG BASIS. The Reorganisation Commission lor Pigs and Pig Products in Groat Britain in 1932, in attempts to decide upon a price formula, agreed that the overhead costs at 10s up to weaning stage, and 10s from weaning to slaughter, i.e., a tota 1 of 20s per pig slaughtered,'were a fair allowance. Overhead costs at tin’s level, with New Zealand prices for pig meats, would make pig keeping very difficult, except where feed costs are very low, as with buttermilk supplies. At £7 lOs ' per ’ sow, based on one that rears 12 pigs per year, the overhead per pig is 12s (id. If pigs attain an average slaughter .weight of iUOlb at 150 days old, the overhead cost per pin per week works out at sevcnpoucc (a penny a day). This, sevenpenee is made up as follows Wages, 2.80 d pig per week; interest, 1.19 d; depreciation, 0.73 d ; running expenses, truck, 2.24 d. It may not be iimpt to stress the amount that goes out in transport charges. In all, transport costs in the above amount to £l5O, or about 5s per pig. This may he a large or a email amount on any particular place, but in the writer’s observations the con\enience of a motor truck is often valued unduly compared with the advantage of better houses. In the past too many have kept pigs on that piece of waste land tliat could be used for nothing else,’ with a minimum of shelter and no conveniences. They have surprised themselves and everyone else at the wonderful suceesses that have been obtained. With better conveniences these can be improved upon. There are far too many of our pigs suffering from’the effects of long association with mud, a thing that can be eliminated entirely by better houses. Good .housing can leduce the 20 per cent, of blemished pigs down to less than 1 per cent. A capital outlay or from Llo to ;t4U per sow provides facilities that remove the drudgerv from pigkeeping, allows them to he kept clean, and by reducing disease losses enables an increased profit to be made. Capital spent in equipment is worth while; in fact it is definitely a profit-earning investment.