Livestock valuation: an assessment model based on sow age

Abstract

[EN] Food supply in Europe is based on the consumption of meat ¿ of which pork is the most consumed. The livestock sector represents some 40% of total agricultural production. Livestock farms need tools for business management and valuation in order to make business productivity estimates and determine compensation, as well as calculate average and marginal costs. Pig farmers need to determine the optimal time for culling a sow: meaning that for livestock depreciation it is necessary to determine the value of sows depending on their age. In this study, a model is shown for valuing a sow according to its productive life and net present value generated. In the same way as any asset in a production process, the economic value of a sow should be estimated by its contribution to the process of generating future profits. The distribution of costs depends on the size of the farm, and so three sizes of farms are considered: fewer than 250 hybrid sows; 251 to 500 sows; and more than 500 sows. The economic values of the sows were obtained according to their age and number of farrowing. The models show variations between differently sized farms.