January 17, 2025
How different pig farm models in China determine profits
Farms of large pig groups have flourished to become major production models in China.
More types of farms have also emerged, including those that focus only on fattening pigs, and small- and medium-sized farms that breed for pig production groups.
Whatever the model, the most critical thing is to survive the violent fluctuations of pig prices. The key is to keep costs low — at least, lower than pig prices to ensure long-term survival.
Notably, different output costs of various models resulted in various profit margins.
Small and medium-scale farms purchase piglets, making the cost of piglets a major component that distinguishes them from self-propagating farms that produce their own piglets.
Fattening farms buy maturing pigs that weigh 90-100 kilogrammes from the breeders, then raise them for two months to sell finishing pigs at 130-140 kilogrammes. The two major components of its cost are the purchase price of live pigs and fattening expenses. Taking the standard 100-kilogramme finishing pig as an example, the cost of pigs is ¥1,900 (US$260), the cost of fattening feed at ¥200 (US$28), and other costs at ¥100 (US$14). The total cost is ¥2,200 (US$302)/head, equivalent to ¥15.70/kg (US$2.17/kg).
Traditional farms with farrowing units produce their piglets and usually keep less than 500 sows. Assuming they achieve 20 pigs per sow yearly, the cost of piglets is ¥350 (US$48), feed cost at ¥1,050 (US$145), and other costs at ¥250 (US$35); the total cost is ¥1,650 (US$228)/head, equivalent to ¥15/kg (US$2.10/kg).
Commercial farms with farrowing units, which own more than 500 sows, produce piglets and fatten them for sale. Assuming they achieve 25 pigs per sow yearly, its piglet cost will be equivalent to ¥250 (US$35) per head, feed cost at ¥900 (US$126), and other costs at ¥200 (US$28); the total cost will add up to ¥1,350 (US$188)/head, converting to ¥11.3/kg (US$1.58/kg).
For large pig-rearing groups, which generally adopt the 'company + farm' cooperative model, piglet cost is at ¥300 (US$42), feed cost at ¥1,000 (US$140), outsourcing fee to farmers at ¥250 (US$35), and the cost of veterinary drugs and vaccines at ¥50 (US$7); the total cost is ¥1,600 (US$224)/head, equivalent to ¥13.30/kg (US$1.87/kg). Additionally, these companies also have a miscellaneous cost of ¥1.20/kg (US$0.17), hence increasing the final cost to ¥14.50/kg (US$2.04/kg).
About EFL AG-DATA
EFL AG-DATA is a startup incubated by Singapore's Nanyang Technological University's Innovation and Enterprise Company (NTUitive) Incubator Program. It is developing an agricultural hub that will revolutionize the feed-to-meat supply chain in China and Southeast Asia countries through data-driven solutions. EFL's mission is to empower farms through innovative data-based services that solve complex problems and enhance productivity.
- EFL AG-DATA