It appears that this summer we are heading towards tight soybean meal supplies, similar to the situation last summer. Every time USDA estimates year end carry-out, the number seems to get lower. Of course this potential tightening of supply is showing up in the market already with an almost $2.50/bu drop in price between current bids and new crop bids. Soybean meal for the summer months is trading at $420-450 per ton while October meal is at $350 per ton.
At the same time, DDGS prices are extremely erratic on a local market basis because of the many rail problems this winter has brought on. There have been reports of local ethanol plants having to slow production due to the inability to receive rail cars in a timely manner for shipment of DDGS and/or ethanol. In the case of DDGS, this has meant some spot prices that can be quite attractive versus expected prices.
While this year looks to be profitable for most, if not all pork producers (unless you experience a dramatic loss of production due to PED virus) there are still quite a few opportunities to further reduce cost of production by managing your diets tighter. Swine nutritionists are working hard to stay ahead of all of the pricing opportunities and concerns that this year is bringing.