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 May 23, 2014.

Looking at November sales of hogs shows a weaner breakeven of $67.97, an increase of $1.30 per head. December lean hog futures were up $0.97 and feed costs were up $0.58 per head. The spread between the August and December futures contract was basically unchanged this week at $31.83. Breakeven prices are based on closing futures prices on May 23, 2014 and the assumptions outlined below. The breakeven price is the estimated maximum price you could pay for a weaner pig and breakeven when selling the finished hog.

Margin over variable costs was $89.81 and refers to the revenue generated from raising a weaner pig that contribute to fixed costs and pig purchase costs. In other words, if the alternative is to idle facilities every dollar between the purchase price and margin over variable costs contributes toward covering those fixed costs such as facility, labor, utilities, property taxes and insurance.

For the Week Ended

5/23/2014

Weekly Change

Weaner pig breakeven

$67.97

$1.30

Margin over variable costs

$89.81

$1.30

Pig purchase month

June, 2014

June, 2014

Live hog sale month

Nov, 2014

Nov, 2014

Lean hog futures

$95.13

$0.97

Lean hog basis/cwt

($3.97)

($0.05)

Weighted average sbm futures

$460.06

$21.16

Weighted average sbm basis

($1.89)

$0.00

Weighted average corn futures

$4.75

($0.06)

Weighted average corn basis

($0.27)

$0.00

Nursery cost/space/yr

$35.00

$0.00

Finisher cost/space/yr

$40.00

$0.00

Feed costs per head

$91.52

$0.58

Assumed carcass weight

205

0.00

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.

National Direct Delivered Feeder Pig Report

Cash traded weaner pig volume was below average with 26,974 head reported which is 88 percent of the 52 week average. Cash prices were $72.49 per head, up $0.47 from the previous week.


Reported

Weekly change

Cash sale weaner pig volume

26,974

15,874

Weighted average cash price/head

$72.49

$0.47

Cash low price/head

$60.00

($1.00)

Cash high price/head

$78.00

$0.00

 

 

 

 

Graph 1 shows weaner pig volume on a four week basis going back to the start of 2011. Year to date weaner pig volume is just 53, 63 and 62 percent of 2011, 2012 and 2013 respectively.

The number of reported weaner pigs sold on a formula basis was 28,767 head at an average price of $44.87. That’s down $0.78 per head from the previous week.

Graph 2 takes a look at estimated profit opportunity by comparing the USDA reported cash price to the estimated breakeven price. Although the spread has narrowed the estimated profit opportunity is still negative $4.52.

Graph 3 shows the cash weaner price and cash feeder price on a weekly basis. Both weaner and feeder prices have come down off of their highs of early April. The spread between the two prices narrowed by $12.00 from last week.

Ryan Cooney is general manager of ePigflow, an online market for weaner pigs, feeder pigs and facility spaces. You can find available pigs and facilities by visiting www.epigflow.com.