Grading of pigs with Autofom and using of the cutting criteria in the new German payment system

1.       Grading of the pigs on basis of the cuts

The benefit in selling cuts depends on the sum of the prices for the single cuts of the carcasses.

Most important are the main cuts: ham, loin shoulder and belly.  The amount of meat in the

main cuts has the biggest influence on the sales price.  That is the reason, why the slaughtering

industry decided to integrate the main cuts without bone and fat in a payment system for the

producer level.  Additionally the lean meat content of the belly should be taken into account,

since considerable price differences occur with different belly qualities.

2.       Consideration of the real relations of cuts sales prices for the payment of pigs

Seasonal changes in price relations of cuts are characteristic for the meat market.  This fact

must be taken into account in a payment system for pigs.  Important for the purchase of pigs

are not the short term changes in prices, but the long term development of the prices and price

relation of cuts over a longer period.  This long term development must be considered in a new

payment system.  An extensive analysis has shown, that the price relation between the cuts

during the last three years was:

ham: loin: shoulder: belly = 70: 100: 50: 25.

This price relation of the cuts was the basis of the new payment system, which is described

under point 3 in the next passage.

3.       Preference of the best selling pigs for the slaughtering industry

A payment system is aiming at the purchase of those pigs, which achieve the best commercial

value in the sale.  The prices of the cuts are depending on the weight.  There are high price

segments and segments for the lower and upper weight cuts, which are cheaper.  This is taken

into account in the new payment system by the number of points, which are given to the cuts in

different weight segments.  The number of points is orientated at the real commercial value.

Depending on the cut weights a complete sum of points for each pig can be calculated.  The

sum of points is multiplied with a defined factor, to get the purchase price for this pig.  The

factor is depending on the actual basic price.

4.        A new payment system on basis of the old price fixing system

The total amount of points, which is calculated as the sum of all points for the single cuts, is

Multiplied with a point factor.  The difference between this factor and the basic price is always

Constant.  In the new payment system for a basic price of 2.50 DM for example, the factor is

2.52. Every change in the basic price causes a change in the factor of the same amount.

5.        Simple way of calculating the prices for the farmers

The way of calculating the purchase price is easier as in the old payment system.  As

mathematic means only summarizing and multiplying are used.

6.        The payment system as an instrument to force the right development in pig breeding

Today the grading of pigs is done by the slaughter weight and the lean meat %. These two

Parameters represent only a part of the commercial value of the whole carcass.  That grading

alone by the lean meat % is not sufficient for the slaughtering houses, is shown by the fact, that

many slaughtering houses sort the carcasses a second time by optical parameters for certain

customers.  This proves, that the old payment system is not the right instrument for buying pigs.

Moreover, the wrong signals have an impact on breeding and production of pigs.  By including

cutting weights in the payment system the grading of pigs is a better orientation for

breeding and production to produce pigs with the best benefit in the market.

Example:

102,2 kg slaughtering weight; 9, 18 kg ham; 3,58 kg loin; 4,60 kg shoulder; 8,36 kg belly;

47,95 lean meat % in the belly

2,50 DM basis price