Economic analysis by comparing different artificial insemination techniques in pork production

Abstract

The pork industry has evolved considerably over recent decades. Competition has intensified as vertical integration continues across the production chain, and companies increasingly operate across all stages from genetics to the slaughterhouse. In this environment, producers pursue new technologies to improve performance and efficiency in labor, health, biosecurity, nutrition, equipment, and genetics. The result is consistent year-over-year improvement in production performance; yet because pork is a commodity, input costs remain the primary determinant of profitability. Feed cost is historically the most significant input, with facility cost and labor increasingly important in recent years. Several structural challenges define the current industry landscape. Disease pressure, particularly PRRS, PEDv, ASF, and CSF represents one of the most disruptive forces facing producers globally, creating supply chain instability and substantial economic losses in affected regions. Labor availability continues to constrain operations, especially in the United States, where agriculture competes with other sectors for a shrinking workforce. At the intersection of two of the most dynamic areas of the industry; reproduction and genetics, lies the central question of this thesis. The last decades at the Genetic Transfer Center (GTC) level have been defined by a sustained effort to reduce semen dose concentration and volume, enabling a single genetically superior boar to reach more females. Simultaneously, genetic programs have focused on developing economically efficient, more robust populations, including novel biotechnologies such as PRRS-resistant pigs that may significantly impact the industry in the mid- to long-term. Combining these two trajectories, reproductive efficiency and genetic dissemination require an evaluation of where the industry currently stands, which technologies can accelerate the speed of genetic dissemination, and whether a measurable economic incentive exists to adopt these techniques at a greater scale. This thesis presents an economic analysis of the U.S. swine industry focused on three artificial insemination techniques: Cervical Artificial Insemination (CAI), Post-Cervical Artificial Insemination (PCAI), and Deep Intra-Uterine Insemination (DIUI). The analysis evaluates whether these techniques generate different economic outcomes across the four main production stages: Genetic Transfer Centers, Sow Farms, Wean-to-Finish Farms, and the Slaughterhouse. A Net Present Value framework is applied at each stage and at the integrated chain level for a representative 5,000-sow U.S. commercial operation, using the risk-differentiated discount rate framework of 7% for established CAI, 8% for PCAI, and 10% for DIUI. Results demonstrate substantial positive incremental NPV across the industry chain when PCAI or DIUI is paired with semen from genetically superior boars. Over a five-year horizon, PCAI with higher-index boars (Scenario C) generates approximately $4.97 million of incremental NPV versus the CAI baseline, equivalent to $995 per sow. DIUI with elite boars (Scenario D) generates approximately $5.99 million, or $1,197 per sow. By contrast, PCAI implemented with the same boar genetic level as CAI (Scenario B) destroys approximately $1.47 million of value, or −$295 per sow, because the modest labor and dose-yield savings do not compensate for the catheter cost premium and the implementation risk premium embedded in the discount rate. The full economic benefit of PCAI is therefore only realized when the GTC and Sow Farm adopt the technology concurrently, with reduced dose concentration at the GTC level enabling more aggressive boar selection. Half-implementation captures a fraction of the available value, and these findings carry direct implications for the commercial deployment of emerging biotechnologies including PRRS-resistant genetics, where semen supply constraints make reduced-dose PCAI not an option but a necessity.