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 30, 2014.

Looking at November sales of hogs shows a weaner breakeven of $68.41, an increase of $0.44 per head. December lean hog futures were down $0.72 and feed costs were down $1.89 per head. The spread between the August and December futures contract narrowed by $1.63 to $30.20. Breakeven prices are based on closing futures prices on May 30, 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 $90.25 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

5/30/2014

Weekly Change

Weaner pig breakeven

$68.41

$0.44

Margin over variable costs

$90.25

$0.44

Pig purchase month

June, 2014

June, 2014

Live hog sale month

Nov, 2014

Nov, 2014

Lean hog futures

$94.40

($0.72)

Lean hog basis/cwt

($3.97)

$0.00

Weighted average sbm futures

$456.61

($3.46)

Weighted average sbm basis

($1.89)

$0.00

Weighted average corn futures

$4.58

($0.18)

Weighted average corn basis

($0.26)

$0.01

Nursery cost/space/yr

$35.00

$0.00

Finisher cost/space/yr

$40.00

$0.00

Feed costs per head

$89.63

($1.89)

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 10,091 head reported which is 34 percent of the 52 week average. Cash prices were $70.77 per head, down $1.72 from the previous week.


Reported

Weekly change

Cash sale weaner pig volume

10,091

(16,883)

Weighted average cash price/head

$70.77

($1.72)

Cash low price/head

$60.00

$0.00

Cash high price/head

$76.00

($2.00)

 

 

 

 

Graph 1 shows the seasonal trends of cash weaner pig prices. Although the 2014 trend is showing some similarities to the previous three years the decrease has been minimal in comparison. Comparing average January prices to average May prices the previous three years decreased 53 to 63 percent and $30 to $37 per head. In comparison the 2014 average January to May price has decreased only 12 percent and $10 per head.

The number of reported weaner pigs sold on a formula basis was 33,010 head at an average price of $45.45. That’s up $0.58 per head from the previous week.

Graph 2 shows the cash weaner price and cash feeder price on a weekly basis through May 30.

 

Graph 3 shows the 52 week average number of pigs sold for cash feeders, cash weaners and formula weaners. Each week reported on the graph represents the average number of pigs sold over the previous 52 weeks so it shows a picture of longer term changes in volume. Cash feeder volume is relatively stable while cash and formula weaner pig volume continue to decline.

 

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