With high corn and soybean meal prices, you can cut your losses $4 to $5 per head by selling market hogs at the packer’s minimum acceptable weights, says Allan Schinckel, Purdue University swine specialist.
Feed prices have more than doubled from a year ago, but market hog prices haven’t gone up equally to compensate. This, of course, has put producers in a money-losing proposition.
“They can minimize those losses by taking pigs to the packer on the lower end of the acceptable weight range,” Schinckel says. “If there’s no discount for pigs at 250 pounds and above, you would market pigs semi-load by semi-load at just above the 250-pound mark.”
Packers tend to pay the most for pigs weighing 250 to 280 pounds. When corn was $2.50 per bushel and soybean meal $180 per ton, you could maximize profits with pigs weighing at least 271 pounds, he acknowledges.
Research by Schinckel and fellow Purdue animal scientists and agricultural economists Paul Preckel, Mark Einstein, Todd Hobbs and Brian Richert, shows that meeting the lower acceptable market weight is a producer’s best strategy during high-feed-cost cycles. They based their findings on the percent-lean requirements of Tyson Foods, Indiana Packers Corp. and Farmland Foods.
Of course, marketing lighter pigs is more labor-intensive. “A producer will have to sort pigs closely. They’ll have to separate the heavier animals two additional times per finishing unit. That comes out to another six to 10 man-hours of labor per thousand-head finisher barn,” he adds. It will require more frequent trips to the packer, which is another scheduling issue to address.
The Purdue researchers also found that you can save on feed costs with pigs that maintain a higher lean growth rate and better feed conversion at heavier weights. “Each producer needs to know the marginal feed conversion of their pigs between 230 pounds and 280 pounds,” Schinckel says. “They also need to know if their pigs are dropping in percent lean enough that the percent-lean discount is changing as the pigs go to the heavier weights.”
In general, low- to average-percent-lean pigs require more feed per pound of liveweight gain and drop in percent lean, he points out. Those pigs should go to market at lower weights. “So, pigs that stay lean to heavier weights and have a higher lean gain are a little bit less sensitive to high feed prices than pigs which are fatter and less efficient,” Schinckel says.
Eventually, prices that producers receive are going to have to catch up with feed costs for the industry to remain viable, he concludes.