There is some confusion when it comes to determining the dollar value of livestock. It would seem very simple at first glance. The purchase price should be it, well maybe not. The age, feed cost, fixed overhead costs are just a few initial considerations in determining the value. What about the average cull rate in your barn, how about average days of gestation, average litter size, current market price?
For example, in a sow barn, one insurance company allows for the purchase price of the gilt, plus the costs to bring the animal to age. They also allow approximately $1 a day for gestation, this alone takes a large number of factors into consideration. A few were mentioned above.
So if you paid $300 for the gilt and put $100 into bringing it to age and then you had a claim when the sow was at 70 days gestation you could state that the value of the animal is $470.
I choose 70 days in this example because that could be a typical average number of days of gestation across the entire herd. Of course that can vary somewhat. The point is do not insure your animals at purchase price.
There is also the discussion as to the actual age of each individual animal. First parity is of greater value than the seventh parity for example. That is up for debate, one thing for sure is the day the sow is culled and removed from the barn its value drops substantially. So this could affect the overall average value of the herd.
Another item to think about is the 18 day old piglet is worth more than the day old which is worth more than the unborn piglet.
I could go on but I won’t… Merry Christmas to you and all the best in 2006!
Be sure to seek advice and purchase insurance from an insurance broker who understands your business!