I missed last week's blog due to a family emergency. Since writing two weeks ago, the whole dynamics of the U.S. industry have changed. June hogs closed above $1.20 Friday on the Chicago Mercantile. The average price paid yesterday (including carcass merit premiums) for all barrows and gilts slaughtered in the United States (as reported by USDA) was $100.41/cwt. With an average barrow and gilt carcass weight of 214.18 lb, this translates into an average of $215.06 for every pig slaughtered yesterday (383,765 barrows and gilts under USDA inspection).
Cull sows are selling for $70/cwt, which means you get $280 for every 400-lb cull. WOW is the only polite word to describe the past two weeks of price increases!
Even though corn and soybean meal prices continue to rise, feed prices haven’t risen as fast as cash and futures prices for slaughter animals. What looked to be a good summer of prices has turned into a windfall of profit – assuming you don’t have a production system plagued with PEDv and have pigs in inventory that are available for sale and delivery at these elevated prices.