# A new financial settlement approach to stabilize profitability of pig production

## TL;DR

This paper introduces a new financial tool to help pig farmers manage risks and stabilize their profits.

## Contribution

A novel financial settlement approach is proposed to reduce profit variability for pig producers.

## Key findings

- The tool reduces profit variability for finishers by 45%.
- Profit variability for piglet producers is reduced by 30%.
- Long-term average profits remain unchanged.

## Abstract

This article proposes and evaluates a new solution that ensures the profitability in short and medium terms and stability of the operations of pork livestock producers through improved risk management An innovative tool for distributing the surplus between producers of piglets and finishers is presented. Manuals on pig farming and data combined from multiple sources were used to assess the current market situation, design a profit stabilization tool for pig producers, and evaluate the performance of this solution. We found that implementing the tool reduces the profits variability of finishers and piglets producers by 45% and 30%, respectively, while keeping the long-term average of profits constant.