This market update is a PorkNetwork weekly column reporting trends in weaner pig prices and swine facility availability.  All information contained in this update is for the week ended December 12, 2016.

Looking at hog sales in June 2017 using July 2017 futures the weaner breakeven was $66.94, up $5.48 for the week. Feed costs were up $0.05 per head. July futures increased $1.05 compared to last week’s July futures used for the crush and the basis decreased from ($2.05) to ($.40). Breakeven prices are based on closing futures prices on December 12, 2016. The breakeven price is the estimated maximum you could pay for a weaner pig and breakeven when selling the finished hog.

For the Week Ended

12/16/2016

Weekly Change

Weaner pig breakeven

$66.94

$5.48

Margin over variable costs

$86.22

$5.48

Pig purchase month

Dec, 2016

 

Live hog sale month

June, 2017

 

Lean hog futures

$77.63

$1.05

Lean hog basis/cwt

($0.40)

$1.65

Weighted average sbm futures

$323.45

$0.54

Weighted average sbm basis

($9.40)

$0.00

Weighted average corn futures

$3.64

$0.00

Weighted average corn basis

($0.24)

$0.00

Nursery cost/space/yr

$35.00

$0.00

Finisher cost/space/yr

$40.00

$0.00

Feed costs per head

$68.40

$0.05

Assumed carcass weight

205

0

Note that the weaner pig profitability calculations provide weekly insight into the relative value of pigs based on assumptions that may not be reflective of your individual situation. In addition, these calculations don’t take into account market supply and demand dynamics for weaner pigs and space availability.

From the National Direct Delivered Feeder Pig Report

Cash traded weaner pig volume was above average this week with 34,700 head being reported which is 102 percent of the 52-week average. Cash prices were $47.26, up $4.67 from a week ago. The low to high range was $42.00 to $52.00. Formula priced weaners were up $0.61 this week at $40.13.

Cash traded feeder pig reported volume was below average with 6,550 head reported. Cash feeder pig reported prices were $47.38, down $0.59 per head from last week.

Graph 1 shows the seasonal trends of the cash weaner pig market.

Graph 2 shows the cash weaner price and cash feeder price on a weekly basis through December 12, 2016.

Graph 3 shows the estimated weaner pig profit by comparing the weaner pig cash price to the weaner breakeven. The profit potential increased $0.81 this week to $19.68 per head.

Editor's Note: Casey Westphalen is General Manager of NutriQuest Business Solutions, a division of NutriQuest. NutriQuest Business Solutions is a team of business and financial experts that bring years of experience in the livestock, row-crop and financial industries. For more information, please visit www.nutriquest.com or email casey@nutriquest.com.