InvestmentsPassive IncomeFarmsBusiness IdeasBusiness & Entrepreneurship

Piglets, Price and Profit: Start-up Piggery Business(4-min read)

It feels good to go back to livestock investments.

Piglets by A. Sparrow, on Flickr


Years ago I dabbled into (very) small-time cattle (e.g. cow) raising, with me providing my uncle (some) capital to purchase (just) one cow (for trial purposes) while he takes care of raising it, feeding it and selling it afterwards (once grown into marketable size). We’re supposed to split what’s left of gross sale less other expenses (vaccines, medicine if necessary, etc). Food is not a problem for cows since there are vast grasslands (still) in Batangas. Unfortunately, I was forced to sell my share of the cow just after a few months to augment my emergency fundsNow, I’m raring to invest once more in cows. Target timeline: 2 months.

In the meantime, I’m trying a small-time piggery. Basically same set-up, I provide the start-up capital to purchase piglets while relatives take care of raising and eventually selling them. Caveat here is that they already have an existing piggery, as such permits and pigpens, waste management and supply chain are already established. I just come in as a small-time capitalist, to give them opportunity to raise a few more pigs for lesser cash out from their end.

Piglets

According to reliable relatives, normally, mother pigs (inahin) or more formally, a sow, can give birth to around 8 to 10 piglets at a time. Some as high as 16 if sow (and the sperm-producing boar/hog (bulugan)) are healthy and the owner is lucky. After 2 months of breastfeeding and weaning, the piglets are now ready to be separated from the sow, and at this point, are now ready for sale to potential pig growers.
Given the number of piglet-siblings, sellers usually sell them as one group (hence around 8 to 10) so it’s more difficult to find sellers who are willing to sell just one or two or five piglets (in case your budget is only for that quantity). Also, mixing piglets from various mothers is not advisable as this causes quarrels and bullying among the piglets, against the minority (especially if they will be sharing the same pen). How do they know who’s the odd pig? Hog raisers say the piglets can tell via the bodily scent if the pig is from another mother.

Price

How much does it cost? As of this writing, the trade prices in San Jose, Batangas is at Php235/135 for piglets. For the first 10kg, price per kilo is Php235. The excess to 10kg is priced at Php135 per kilo. The piglets we got averaged at 19kg (some as low as 16kg while one weighed 20kg), so at this average, each piglet costs Php3,565. Estimated cost for feeds is at Php1,050 per pig per month, and usually, pigs are mature and big enough for sale in 4 months time after purchase (which started at month 2, so total of 6 months). Estimated total cash out is Php7,765. 
Except for the gilt (grown female pig with no offspring) which takes a bit longer to be ready for breeding /impregnation and eventual giving birth (as a sow) to a new set of piglets. Usually growers leave one gilt and prepare it for multiple cycles of “pig-bearing.” Per Google, one gestation period or pregnancy cycle of a pig is 114 days or additional 4 months). With this, a new set of piglets may be raised at minimal cost (e.g. retainer/performance fee of the bulugan, or payment for its (fertile) blood donation).

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Profit

Say a grown pig averages 90kg upon sale. Trade price as of this writing is at Php120 per kilo of live pig. Per kilo of pork meat (essentially a dead sliced pig) is higher given the mark-ups (butchering plus transportation costs, and less the weight of inedible parts). Anyway, if you sell a pig of 90kg at Php120 per kilo, that translates to Php10,800 gross sale. Less investment cost of Php7,765, net income is Php3,035. Split into two between financier and raiser, that’s Php1,517 or 19.5% ROI on the part of financier (=1,517/7,765). Note that labor cost of hog raiser is not accounted for here. Also, water and electricity costs (if any) are usually borne by the raiser. Php1,517 may seem peanuts to you but %-wise, that is a high ROI. And imagine if you have 10piglets, that’s Php15k in 4 months of passive income, your money (and relatives) working for you. Price per kilo of live pigs tend to fluctuate with the season, with Christmas season and Fiesta seasons commanding a slightly higher price per kilo given the higher demand.

Am I counting my chicks before they hatch, este my piglets before they grow into big, fat, healthy and heavy pigs? I hope not. Stay tuned for updates.
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Photo: Piglets by  A. Sparrow

Creative Commons Attribution 2.0 Generic License

 

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