Case 3: Bill Thurmond Pig Farm

1012 WordsNov 14, 20105 Pages
Case 3 Bill Thurmond Pig Farm Problem: The pig farm that has been doing well for years is now incurring losses with low prices at market. What needs to be done to keep cash flowing so that the farm can keep open until market prices get better? Situation: Strengths- * From 1995 – current 1998 expenses have gone down drastically giving them less overhead. * Generations of farming experience * They are in a cooperative that pays them to farm. * They have timber and real estate they can sell to get cash if necessary. * They are on high ground and with Hurricane Floyd coming September of 1999 this could be a big deal. * They have a good quantity of pigs ready for market Weaknesses: * Dwindling pig sales from…show more content…
He would need to get a price that is decent because the price will go back up. Setting up a two year contract for 30₵ per pound would be attractive but I am not sure that would be possible. At 30₵ per pound less 5₵ transportation fee he would need to sell around 2,135 additional pigs to breakeven for the year. At this price with the efficiencies he has put in place he should be able to use this to help breakeven again next year. This is unlikely but what would be a good scenario for the farm. The biggest problem that he is encountering is that he is not selling enough pigs. He needs to get the volume of sales up and try to sell when the market is at its best. In September 1999 hurricane Floyd rocked the North Carolina coast and flooding ensued for 2 months after the hurricane hit. If Thurmond Pig Farm is on high land and still has a decent bit of pigs it will be able to sell those pigs for top dollar. It would also be able to sell live pigs to help replenish other farms stock and perhaps be able to keep other farmer’s pigs while damage control is being done after the storm. This is a family business and they don’t want to sell but it would be a good idea with the very lean past few years and competition and regulatory changes to look at establishing an exit strategy of selling the farm and making top dollar so that they can start another

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