The actual payment depends on the final feed conversion ratio. In addition, some companies offer increasing incentives when mortality is below three percent. Still another variation of the payment includes profit sharing. Under these agreements, producers share in half the profits after all expenses are paid. As in the finishing contracts, producers provide the buildings, labor and facilities, and the company maintains the breeding stock inventory and provides feed.
Many companies offer incentives for pigs raised per sow or percent crates filled.
Ideally, the contract should state that pigs are reasonably healthy, have had necessary vaccinations and parasites are under control. Delivery schedule - Pigs should be delivered within a reasonable time after pens are emptied. Payments - It should be clear what the payments are and when they are made. If there are incentives, these should be easy to calculate and simple to document. For example, if a bonus is paid when more than 18 pigs per sow per year are sold, it should be spelled out when replacement gilts are considered part of the sow herd.