A stochastic bio-economic pig farm model to assess the impact of innovations on farm performance.

Recently developed innovations may improve the economic and environmental sustainability of pig production systems. Generic models are needed to assess the impact of innovations on farm performance. Here we developed a stochastic bio-economic farm model for a typical farrow-to-finish pig farm to assess the impact of innovations on private and social profits. The model accounts for emissions of greenhouse gases from feed production and manure by using the shadow price of CO2, and for stochasticity of economic and biological parameters. The model was applied to assess the impact of using locally produced alternative feed sources (i.e. co-products) in the diets of finishing pigs on private and social profits of a typical Brazilian farrow-to-finish pig farm. Three cases were defined: a reference case (with a standard corn-soybean meal-based finishing diet), a macaúba case (with a macaúba kernel cake-based finishing diet) and a co-products case (with a co-products-based finishing diet). Pigs were assumed to be fed to equal net energy intakes in the three cases. Social profits are 34% to 38% lower than private profits in the three cases. Private and social profits are about 11% and 14% higher for the macaúba case than the reference case, whereas they are 3% and 7% lower for the co-products case, respectively. Environmental costs are higher under the alternative cases than the reference case suggesting that other benefits (e.g. costs and land use) should be considered to utilize co-products. The CV of farm profits is between 75% and 87% in the three cases following from the volatility of prices over time and variations in biological parameters between fattening pigs.