Cooney: Weaned breakeven drops to $88.58

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

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 March 28, 2014.

The weaner pig breakeven price is $88.58, down $2.50 for the week. October futures decreased $0.35 for the week and the spread between the August and October futures contract narrowed by $0.33 to $22.12. If you are looking to hedge September sales a straight hedge against the October contract will not be your best option. The breakeven price is based on closing futures prices on March 28, 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 $110.41 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

3/28/2014

Weekly Change

Weaner pig breakeven

$88.58

($2.50)

Margin over variable costs

$110.41

($2.50)

Pig purchase month

Apr, 2014

Apr, 2014

Live hog sale month

Sep, 2014

Sep, 2014

Lean hog futures

$103.85

($0.35)

Lean hog basis/cwt

($1.21)

$0.00

Weighted average sbm futures

$457.69

$12.47

Weighted average sbm basis

($2.00)

$0.00

Weighted average corn futures

$4.93

$0.11

Weighted average corn basis

($0.22)

$0.00

Nursery cost/space/yr

$35.00

$0.00

Finisher cost/space/yr

$40.00

$0.00

Feed costs per head

$93.69

$1.75

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 23,306 head reported, which is 70 percent of the 52 week average. Cash prices were $88.73 per head, down $2.77 from the previous week.


Reported

Weekly change

Cash sale weaner pig volume

23,306

(23,409)

Weighted average cash price/head

$88.73

($2.77)

Cash low price/head

$79.00

$5.00

Cash high price/head

$97.00

($4.50)

Graph 1 shows weaner pig volume on a four week basis. Year to date volume is 55, 63 and 65 percent of the years 2011, 2012 and 2013 respectively.

click image to zoomRyan Cooney

The number of reported weaner pigs sold on a formula basis was 34,679 head at an average price of $51.00. That’s up $1.00 per head from the previous week.

Graph 2 shows weaner and feeder pig reported cash prices over the past three years through March 28. The graph shows that feeder prices typically lag weaner price changes. Cash weaner prices have broken out of their historical seasonal pattern. Weaner pigs have been trading in a 10 dollar range the past 15 weeks while feeder prices continue to climb.

click image to zoomRyan Cooney

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.



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


SmartScan

Agrivolt has unveiled a new tool in its mission to mitigate stray voltage. They are now offering full time surveillance ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Generate Leads