Overview of the Situation of the Pig Sector (Profitability, Efficiency)

Marcin, Tamás – Kovács, Krisztián – Nagy, Adrián Szilárd – Vida, Viktória

Keywords: pig sector, efficiency, case study JEL: Q12, Q13, Q14

In this study, we analysed the market situation and the income generating capacity of the pig sector, the sector was explored in this context. After the sectoral overview, we aimed to model a "good production practice" to illustrate the income generating capacity of pig farming. The results show the characteristics of the natural inputs, the production costs and their structure and composition. It was found that feed costs account for approximately two thirds of the total cost of pork production, hence the improvement of cost efficiency is a key economic objective. The main difficulty in production is the constantly changing purchase price, which essentially determine whether a company can make a profit or a loss. Based on the data, it was calculated how the turnover of a virtual farm would develop under current conditions and it was concluded that at current market prices, without subsidies cannot be generated revenue in the pig sector, the virtual farm has only been able to make a profit thanks to the support from the sector. Finally, cross-tabulation analyses have been used to illustrate how feed price and selling price, and feed price and feed conversion ratio influence the efficiency and profitability of production. We can conclude that our virtual farm is in a difficult situation, because if the specific feed conversion ratio increases minimally (cp) or the feed price increases (cp), in both cases the farm realises losses. At current feed material prices, it is worth considering the compromise between satisfying the full requirements of the genetics, thereby achieving high feed conversion ratios and good meat quality, or use cheaper feed, which reduces the natural indicators, but we may be able to achieve a more cost-effective level.