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 April 11, 2014.

The weaner pig breakeven price is $79.55 down $2.08 for the week. That is the third consecutive weekly drop with the price down $11.53 from the high on March 21. The decrease this week was driven by lower October futures which were down $1.87 for the week. 

Corn and soybean meal were lower which pushed feed costs down $1.56 per head. The spread between the August and October futures contract widened by $1.43 to $17.48. The breakeven price is based on closing futures prices on April 11, 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 $101.38 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

4/11/2014

Weekly Change

Weaner pig breakeven

$79.55

($2.08)

Margin over variable costs

$101.38

($2.08)

Pig purchase month

May, 2014

Apr, 2014

Live hog sale month

Oct, 2014

Oct, 2014

Lean hog futures

$99.28

($1.87)

Lean hog basis/cwt

($1.17)

$0.00

Weighted average sbm futures

$444.89

($16.77)

Weighted average sbm basis

($4.36)

($2.36)

Weighted average corn futures

$5.02

($0.05)

Weighted average corn basis

($0.24)

($0.01)

Nursery cost/space/yr

$35.00

$0.00

Finisher cost/space/yr

$40.00

$0.00

Feed costs per head

$93.59

($1.56)

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 28,737 head reported, which is 89 percent of the 52 week average. Cash prices were $86.34 per head, down $5.07 from the previous week.


Reported

Weekly change

Cash sale weaner pig volume

28,737

18,240

Weighted average cash price/head

$86.34

($5.07)

Cash low price/head

$78.00

($4.00)

Cash high price/head

$98.00

$3.00

Graph 1 shows the seasonality of weaner pig prices the past 3 years compared to the current year.

The number of reported weaner pigs sold on a formula basis was 24,833 head at an average price of $52.13. That’s up $4.97 per head from the previous week.

Graph 2 shows weaner and feeder pig reported cash prices over the past three years through April 11. The graph shows that feeder prices typically lag weaner price changes. Weaner pigs have been trading in a 10 dollar range the past 15 weeks.


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.