Production Control I: The Key To Profits

David A. Roland1, Sr., M. M. Bryant1, M. Farmer2 and A. Roland3

Auburn University1 Auburn, ALRidley Inc. 2 Mankato, MN

Roland Poultry Services, LLC. 3 Auburn, AL

SPSSAtlanta , GA January 21-23, 2008

Production Efficiency has never

been better!

Egg ProducersEgg Producers (losing money)(losing money)Egg ProducersEgg Producers (losing money)(losing money)

PRODUCTION MANAGER

MARKETING MANAGER

WE HAVE TOO MANY EGGS! Low Egg Prices

HIGH EGG PRICES AND PROFITSHIGH EGG PRICES AND PROFITS

MARKETING MANAGERGoal: highest egg price

We need more eggs!

PRODUCTION MANAGERGoal: optimal production

efficiency

Come on girls…gimmie all you got!

Production efficiency has never been

better!

Good Team Work Helps Optimize ProfitsGood Team Work Helps Optimize Profits

…OK!

EXCESS EGGS = LOW EGG PRICES = NEGATIVE RETURNSEXCESS EGGS = LOW EGG PRICES = NEGATIVE RETURNS

MARKETING MANAGERGoal: highest egg price

We have too many eggs! Losing Money

PRODUCTION MANAGERGoal: optimal production efficiency

Come on girls…gimmie all you got!

Production has never been better!

Poor Team Work Results in Excess Eggs and Negative ReturnsPoor Team Work Results in Excess Eggs and Negative Returns

?

PRODUCTION CONTROL = KEY TO PROFITSPRODUCTION CONTROL = KEY TO PROFITS

MARKETING MANAGERGoal: Highest Egg Price

We have enough eggs!

PRODUCTION MANAGER

Good Team Work = Reduced Egg Supply and Faster Return to ProfitsGood Team Work = Reduced Egg Supply and Faster Return to Profits

Okay girls. Take a

breather, demand has

been met

Thank you

New Goal: Optimal ProfitsNew Goal: Optimal Profits

Moral of the story….

Marketing and Production working together using new technology can improve production

control and profits!

.72 .75 .79 .83 .87 .92 .97

EconomicallyOptimal

maximumresponse

deficie

nt

Nutrientrequirementfor max profitvaries

Nutrient level (Lysine, Protein)Cost

Per

form

ance

How nutrient requirements are determined ?

1.0114.3 14.8 15.3 15.8 16.5 17.2 17.8 18.58.0

Feeding Based on Intake (Lys. Mg/h/d)

FC (lbs/100h/d) (W-36)

Diet Lys. 18 19 20 21 22 23

218 .97 792(229)a

881 (255)a

1013 (293)a

219 .92 792 835

220 .87 790 (229)a

792(255) a

908 (293)a

221 .83 753 792

222 .79 717 792

223 .75 612 (229)a

681 (255)a

792(293) a

Typical Feeding Program a ME/h/d

Profits (¢/doz.) (Phase II)

FC (lbs/100h/d) (W-36)

Diet Lys% 18 19 20 21 22 23

218 .97 ?

219 .92 ?

220 .87 ?

221 .83 ?

222 .79 ?

223 .75 ?

Feeding based on intake saves money. Blindly making changes.

Profits = UB egg price – [ Back of UB – Prod. Cost – Process. Cost – Feed Cost ]

Example:

Production cost

Cost of nest run into package product delivered

Back Urner Berry

Profits (¢/doz.) (Phase II)

Feed Consumption (lbs/100h/d) (W-36)

Diet Lys 18 19 20 21 22 23

218 .97 .57 .83 0.10 -0.69 -1.53 -2.03

219 .92 .63 1.09 0.84 -0.04 -0.91 -1.35

220 .87 .33 1.08 1.24 0.53 -0.30 -0.76

221 .83 -.10 1.07 1.16 0.76 0.19 -0.27

222 .79 -1.06 0.22 0.96 0.77 0.48 -0.05

223 .75 -2.30 -0.54 .55 0.49 0.17 -0.03

Best diet varies depending on egg and feed price

Profits (¢/doz.) (Phase II)

Feed Consumption (lbs/100/day)

Diet Lys% 18 19 20 21 22 23

218 .97 -17.43 -17.85 -19.00 -20.19 -21.11 -22.41

219 .92 -16.71 -17.14 -17.93 -18.96 -19.96 -21.20

220 .87 -16.36 -16.71 -16.94 -17.88 -18.95 -20.23

221 .83 -16.11 -16.33 -16.71 -17.23 -18.03 -19.31

222 .79 -16.30 -16.33 -16.59 -17.09 -17.33 -18.65

223 .75 -16.64 -16.46 -16.32 -17.05 -17.35 -18.09

Low Egg Prices with High Protein Cost

Profits (¢/doz.) (Phase II)

Feed Consumption (lbs/100/day)

Diet Lys% 18 19 20 21 22 23

218 .97 -14.86 -15.21 -16.27 -17.28 -18.08 -19.21

219 .92 -14.93 -15.30 -16.01 -16.98 -17.87 -18.99

220 .87 -15.30 -15.60 -15.80 -16.69 -17.71 -18.92

221 .83 -15.68 -15.70 -16.26 -16.77 -17.54 -18.79

222 .79 -16.50 -16.53 -16.80 -17.30 -17.55 -18.89

223 .75 -17.42 -17.27 -17.35 -17.91 -18.23 -19.03

Low Egg Prices with Low Protein Cost

18% P

Phase 1 - 18%

I. Prior to 50’s – fed one diet

II. 60’s (fed based on age)

III. 70’s ( fed based on intake)

IV. 80’s & 90’s(Envir. Cntl. & soft ware)

20th Century

21st Century

V. 2000’sEconometric Feeding

Important Periods in Optimizing Protein and Energy

Phase 2 - 17%

Phase 3 - 16%

18 19 20 21 22 18 19 20 21 22 18 19 20 21 22

Lbs/100 h/d

18 19 20 21 22 18 19 20 21 22 18 19 20 21 22

Lbs/100 h/d

Example: Product X18.9 18.5 17.5 16.8 16.2

% Prot. 20 14%

% Prot. 20 14%

VI. Production Control

Econometric Feeding and Management (E F & M) Program

1. Feed formulation

2. Traditional feeding program

3. Record keeping *

4. Econometric Feeding and Management (E F & M)

5. PRODUCTION CONTROL

Wks 21-36 Production (%) Egg weights (g)

flk F 18.9 17.5 16.3 dec 18.9 17.5 16.3 dec

1 99 78 87.6 87.0 86.5 1.4 54.6 54.0 54.4 0.2

2 00 78 88.6 87.5 87.2 1.4 56.5 56.3 55.2 1.4

3 00 78 88.9 88.5 86.5 2.4 56.6 55.5 55.7 0.9

4 01 68 94.3 94.2 92.3 2.0 56.4 55.8 55.5 0.9

5 02 68 93.1 91.7 91.9 1.2 58.1 57.5 57.4 0.7

6 02 68 89.1 89.1 88.2 0.9 55.9 55.7 55.4 0.5

7 02 68 90.4 89.8 88.3 2.1 55.3 54.8 54.4 0.9

8 02 68 91.9 89.7 92.1 55.3 54.7 54.3 1.0

9 02 68 95.2 93.3 93.2 2.0 55.5 55.4 54.7 0.8

Avg 91.0 90.1 89.6 1.4 56.0 55.5 55.2 0.8Lysine 1.02 0.92 0.83 1.02 0.92 0.83

Profits (¢/doz.) (Phase II)

FC (lbs/100 h/d)

Diet Lys.% 18 19 20 21 22 23

218 .97 0.10

219 .92 0.84

220 .871.24

(789-825)

221 .83 1.16

222 .79 0.96

223 .75 .55

20 lb = 789 mg/h/d , 20.9 lb = 825 mg/h/d (5% variation)

Can we improve Lysine (mg/h/d) Delivery?

20.0 20.9 lbs/100 h/d

Available Lysine Standard

640

690

740

790

840

890

21 33 45 57

640

690

740

790

5 10 15 20 25 30 35 40

Lys

ine

(mg

/h/d

)

Pre-Molt Post-Molt

I

II

III

I

II

III

Weeks of age Weeks after molt

IVIV

Phases Phases

Phase II - Egg Weight

56

57

58

59

60

61

62

18 19 20 21 22 23

lbs/100 h/d

Egg

wei

ght (

g)

0.970.920.870.830.790.75

218

219

220

221

222

223

%Lys Diet

How to Adjust Nutrient Intake in ± 2.5% (.5 lb) Increments

Lb/100/d 19 20 21

% Lysine .94 .89 .84

Intake(19.5)

19.0 - 19.9

(20.5)

20.0 – 20.9

(21.5)

21.0 – 21.9

Lys mg/h/d 817 817 817

Intake(19.0)

18.5 - 19.4

(20.0)

19.5 – 20.4

(21.0)

20.5 – 21.4

Lys mg/h/d 800 800 800

Intake(20.0)

19.5 - 20.4

(21.0)

20.5 – 21.4

(22.0)

21.5 – 22.4

Lys mg/h/d 840 840 840

Flock Variation(Avg. wk 21-36) Environmental Control

Flock EW (g) Prod. (%) Flock EW (g) Prod. (%)

1 51.1 86 6 52.2 80

2 51.3 88 7 52.8 86

3 53.2 81 8 52.4 87

4 53.3 81 9 54.9 84

5 53.6 83 10 53.5 78

Complex Avg. – best 1 million +Variation in egg weights = 3.8g/egg (3.0 lb/case) vs 1.2 g/eggVariation in egg production = 10 % vs 2.4 % diet