Cooney: Weaner breakeven slightly higher

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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 January 24, 2014.

click image to zoomRyan Cooney, pork The weaner pig breakeven price is $81.59, up $0.68 for the week. Hog futures were higher for the week and feed prices were mostly unchanged. The breakeven price is based on closing futures prices on January 24, 2014 and the assumptions outlined below.

Margin over variable costs was $103.42 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

1/24/2014

Weekly Change

Weaner pig breakeven

$81.59

$0.68

Margin over variable costs

$103.42

$0.68

Pig purchase month

Feb, 2014

Feb, 2014

Live hog sale month

Jul, 2014

Jul, 2014

Lean hog futures

$98.25

$0.33

Lean hog basis/cwt

($1.99)

$0.00

Weighted average sbm futures

$419.68

($9.39)

Weighted average sbm basis

$4.95

$0.00

Weighted average corn futures

$4.38

$0.03

Weighted average corn basis

($0.08)

$0.01

Nursery cost/space/yr

$35.00

$0.00

Finisher cost/space/yr

$40.00

$0.00

Feed costs per head

$87.88

($0.01)

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.

The graph below shows the estimated weaner pig breakeven price by week starting in 2011. It shows the last quarter of the year 2013 had breakeven prices roughly 12 percent higher than 2011 and 46 percent higher than 2012. The breakeven price has plateaued and been between $80 and $87 for the past 13 weeks.

click image to zoomRyan Cooney, pork

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.



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