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.
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.
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.
Cut weight per pig  Points 
ham without bone and fat 

< 14 kg  2,15 
14  19 kg  2,40 (70 %) 
19  20 kg  2,15 
> 20,0 kg  1,9 
loin 

< 6,2 kg  2,8 
> 6,2 kg  3,45 (100 %) 
shoulder without bone and fat 

without limit 
1,70 (50 %) 
belly 

< 45 % lean  0,5 
45  50 % lean  0,8 
> 50 % lean  1,00 (25 %) 
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.
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.
The way of calculating the purchase price is easier as
in the old payment system. As
mathematic means only summarizing and multiplying are
used.
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.
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
ham: 2 * 9,18 kg * 2,40 points  44,06 points 
loin: 2 * 3,58 kg * 3,45 points  24,70 points 
shoulder: 2 * 4,60 kg * 1,70 points  15,64 points 
belly: 2 * 8,36 kg * 0,80 points  13,38 points 
sum:  97,78 points 
price complete: 97,79 points * 2,52 factor  246,41 DM 
price per kg: 244,98 DM / 102,2 kg  2,41 DM/kg 