From the weather to prices, production to demand, and everywhere in between, this is an industry where certainties are scarce and variation reigns supreme. In essence, pork production is the art and science of stacking the deck that nature and the market deals out.
In a variation-dominated world such as this, including probabilities in cost-benefit calculations can be a great way to enhance their quality. Biosecurity is a perfect example, where known costs must be balanced against unknown and random disease costs. A probabilistic analysis can help remove some of the guesswork when deciding just how much should be invested in maintaining and improving biosecurity.
Is the Improvement Worth It?
To begin examining how probability can be incorporated into cost-benefit analysis, let’s use an example. In this scenario a producer is considering some improvements to biosecurity on a site where disease breaks roughly once every year or two. The producer estimates there are 10 years (21 turns) of productive life left in the barns before they need to be replaced. Is it worthwhile pursuing these improvements or should things be left alone until new barns are built?
By using probability in a cost benefit analysis, it becomes much easier to identify where break-even thresholds lie with more precision and under what conditions this investment would not be profitable. This is more insightful than a calculation based on static values alone and allows more informed decisions that better suit risk tolerances.
If uncertainty is preventing you from making additional investments into biosecurity, then this method might shed a little light on what the best course of action would be. It will certainly make stacking the deck in your favor more science than art, and that is a formula for long-term success.
Your Next Read: The Power of Why: Sow Barn Manager Jaime Sanchez Rises Above
