In better times of pig production, it’s crucial to remember the lessons of more difficult days.
Swine producers’ chief goal is breeding and raising a consistent supply of healthy pigs, and data analytics so they can better track their true cost of production at any given time. But it’s critical to implement a risk management strategy as diligently as managing the pigs in the barn.
In better times of pig production, it’s crucial to remember the lessons of more difficult days and be sure your risk management to protect against potential future losses is solid. Producers need information they can use in marketing their pigs, which includes expert insight into Chicago Board of Trade contract strategies as well as activity in other markets on the world stage.
What makes up risk management? PSM President Bill Hollis, DVM, comments on approaching strategies as three categories. First, there are the everyday cash costs, which include the price of production and receipts from delivering the finished product: A healthy market pig. It sounds simplistic to say knowing your expenses and income is necessary as a predecessor to wise spending, expansion, culling and more — but it never hurts to review the basics.
Key to any risk management strategy is producers being aware of their cost of production at all times, to know what kinds of margins they are protecting. This also typically helps them consistently earn an income, even if it’s a modest profit in tough times.
As a producer once told me, “It’s great to hit a bunch of singles and doubles; I don’t want the grand slam every time, making it where I can’t afford to strike out, and I lose everything.”
When it comes to understanding futures contracts and hedging, Carthage experts are in regular contact with the producers they help, providing insights and advice from their market experience and even knowledge of and contacts in global markets. For instance, when you’re looking to the Board of Trade and asking, “What can I do with respect to corn and bean meal and lean hogs? Should I lock in now?” our experts’ insights, and ability to provide producers a “sounding board” of sorts, can cut through some of that complication.
CVS also participates in two ongoing disease surveys — the University of Minnesota’s on prevalence, and Iowa State University’s on epidemiology — to stay abreast of latest trends in pathology and compare PSM producers’ track records to the broader industry. This is yet another puzzle piece in producers knowing their potential profits.
Finally, good times are a prime opportunity to strengthen relationships with your buyers and bankers. Buyers might seem obvious — you want to maintain a profit stream — but touching base with your banker even when you aren’t in need of a line of credit or loan is a good idea (not to mention they can help advise you on certain aspects of risk management too).
Or, as Bill likes to say, “It’s always good to reassure them that you’ve got healthy pigs in the barn!”
Live Link: A sound risk management strategy is music to producers’ ears
Early adopters have been amassing and recording data for a quarter-century or so. How do we turn that data into information, and information into knowledge?
Finding the right balance between taking beneficial preventative measures and not spending an over-budgeted amount on pharmaceuticals
As a pork producer, you can’t personally control how far north the New World screwworm advances, but you can protect your own operations and interests as much as possible.
Finding the right balance between taking beneficial preventative measures and not spending an over-budgeted amount on pharmaceuticals
Finding the right balance between taking beneficial preventative measures and not spending an over-budgeted amount on pharmaceuticals
Finding the right balance between taking beneficial preventative measures and not spending an over-budgeted amount on pharmaceuticals
Finding the right balance between taking beneficial preventative measures and not spending an over-budgeted amount on pharmaceuticals
Finding the right balance between taking beneficial preventative measures and not spending an over-budgeted amount on pharmaceuticals
Dustin Coleman raises wean pigs under contract on his farm in Missouri.
Producers are extremely good at several things: working hard, caring for their animals, and planning.
