Finishing hogs is a margin business.  Based on expectations for what we anticipate the future price will be for market hogs, and what current grain and feed prices are, a market will exist for feeder pigs valuing them at or near a price that would result in a remaining margin to cover overhead costs associated with facilities and labor and meet some additional profit objective.  Competition within the industry drives this expected margin low and near breakeven.  Possibilities of greater than expected profits are possible when feeding costs are low or there is a rising market.  Losses are likely if hogs are sold at prices below projected or feeding costs are higher than anticipated.

Certainly a hedge against low prices is low production cost.  Additionally, contracting at a set price for future delivery with a processor or selling futures contracts can lock in prices and needs to be considered when profit opportunities exist.  Avoiding price discounts associated with out of weight or low yielding animals and capturing some price premiums for high indexing carcasses is important in a narrow margin business.  Low feeding costs result from high performing hogs minimizing days to market, low death losses and treatment costs, and use of competitively or advantageously priced feed.  High performance is closely tied to ration formulation, animal comfort, and health status.

Growing-finishing hogs eat a ground or pelleted grain based ration supplemented with appropriate protein, minerals, and vitamins.  Their nutritional requirements to maximize performance change over the feeding period as the composition of growth changes and they mature such that rations need to be adjusted a number of times over the feeding period to minimize ration costs primarily through reducing protein levels.  Corn is most often the grain of choice as it often represents the cheapest source of energy in the ration.  In areas where corn is not grown, and additional freight is incurred to bring it in, alternative grains grown in the region are most likely least cost.  In many northern or western regions this is likely feed barley or damaged wheat (frosted, sprouted, etc..) ; however, scabby grains high in vomitoxin are not suitable for hogs.

Although barley is higher in protein, it contains more fiber, less energy, and has a lower test weight bushel measure than corn.  On a bushel basis barley would have about 78% the value of corn.  On a nutrient cost basis, $1.90 corn is roughly equal to $1.48 barley in latter phases of growing-finishing when intake and fiber level are not of much concern.   A standard source of protein in hog rations is soybean oil meal.  It is a highly concentrated source of protein (42-50% CP), high in energy, palatability, and the amino acid lysine which is typically first limiting in feed grains.  However handling and freight costs in areas distant to where it is produced add to its cost.  Lower cost protein alternatives that can replace some or all soybean meal in hog rations exist where field peas are produced and in proximity to ethanol or bio diesel processing plants with favorably priced high protein byproducts as dried distillers grains or canola meal.

Due to current prices field peas are of particular interest in reducing ration and feeding costs where available.  Peas have a medium protein content and are high in energy.  Depending on price they may be fed at limited amounts as a protein source, or as is the case now being similar in price to feed grains can be fed at higher levels replacing greater amounts of cereal grains.  Pea protein is rich in the amino acid lysine but relatively low in methionine and cysteine which contrasts and compliments cereal grains and canola meal.  Some concern exists for feeding peas to very young pigs as they are sensitive to some compounds considered to have anti-nutritional factors present in peas at low levels.  Therefore peas are often limited to replacing no more than 20% of the soybean meal in starter diets. 

In growing finishing diets peas can be included up to 30-40%.  In barley based rations this can essentially replace all of the soybean meal if fed with feeds complimentary for methionine or if synthetic methionine is included as a supplement at about .2% of the ration.  Peas have performed well in pelleted and ground diets with similar gain and conversion and with no differences in carcass characteristics to traditional soy meal based diets.

Hog feeders operate in a competitive margin environment.  Profitability is enhanced by achieving low feeding costs.  This is particularily the case as supply cylces pressure hog prices.  There are changing opportunities to minimize feed costs by formulating rations to take advantage of least cost feedstuffs.  It is important with any feedstuff being incorporated into the ration that the final diet has been properly formulated to meet nutritional requirements to maintain high performance.  Feed dealers, nutritional consultants, and extension specialists can assist producers in evaluating feeding alternatives and projecting feeding returns.  Within our state known for its quantity and diversity of grain production there are associated opportunities for pork production.