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 July 25, 2014.

Pricing off the February lean hog contract for January sales shows a weaner breakeven of $81.03 down $10.72 for the week. The big drop was driven by the February lean hog contract decreasing $5.68 for the week. Feed costs were down $0.49 per head. The spread between the August and February futures contract widened by $2.28 to $30.35. Breakeven prices are based on closing futures prices on July 25, 2014 and the assumptions outlined below. The breakeven price is the estimated maximum you could pay for a weaner pig and breakeven when selling the finished hog.

For the Week Ended

7/25/2014

Weekly Change

Weaner pig breakeven

$81.03

($10.72)

Margin over variable costs

$102.86

($10.72)

Pig purchase month

Aug, 2014

Aug, 2014

Live hog sale month

Jan, 2015

Jan, 2015

Lean hog futures

$93.45

($5.68)

Lean hog basis/cwt

($3.56)

$0.20

Weighted average sbm futures

$360.38

$2.60

Weighted average sbm basis

$6.42

$0.00

Weighted average corn futures

$3.74

($0.06)

Weighted average corn basis

($0.30)

$0.00

Nursery cost/space/yr

$35.00

$0.00

Finisher cost/space/yr

$40.00

$0.00

Feed costs per head

$76.05

($0.49)

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 above average with 52,717 head reported which is 175 percent of the 52 week average. Cash prices were $79.09 per head, up $1.32 from the previous week.


Reported

Weekly change

Cash sale weaner pig volume

52,717

29,500

Weighted average cash price/head

$79.09

$1.32

Cash low price/head

$73.00

$8.00

Cash high price/head

$84.00

$3.00

Graph 1 shows the seasonal trends of the cash weaner pig market.

The number of reported weaner pigs sold on a formula basis was 36,604 head at an average price of $51.98. That’s up $0.76 per head from the previous week.

Graph 2 shows the cash weaner price and cash feeder price on a weekly basis through July 25.

 

Graph 3 shows the estimated profit opportunity by comparing the weekly weaner cash price to the breakeven price. With the big drop in hog futures the estimated profit opportunity decreased to $1.94 per head.

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.