Now you can estimate the profitability of your hog operation by month with a new hog crush tool developed by NutriQuest, Mason City, Iowa. The idea of a hog crush is derived from a profitability calculation that has been used for decades in soybean processing.
Several risk-management consultants have deployed this approach in the swine sector and other areas of agriculture for some time.
Using futures prices for the major pork production outputs and inputs offers producers the ability to project estimated profitability over several future months and represents a useful planning and risk-management tool, according to NutriQuest officials.
The NutriQuest Hog Crush incorporates futures prices for lean hogs, corn and soybean meal, coupled with the various cost assumptions for a producer (quantities of corn, corn equivalents and soybean meal; other feed costs; the various elements of fixed costs; hog market weight and basis) to compute a 12-month-forward estimated per-head profit, by month.
You can find more in the NutriQuest newsletter, at http://bit.ly/IoANHo.