Cooney: Lower feed costs help weaner prices stay strong

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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 3, 2014.

PIgs The weaner pig breakeven price is $88.00, up $1.41 for the week due to higher hog futures and lower feed prices. The breakeven price is based on closing futures prices on January 3, 2014 and the assumptions outlined below.

Margin over variable costs was $109.83 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

1/3/2014

Weekly Change

Weaner pig breakeven

$88.00

$1.41

Margin over variable costs

$109.83

$1.41

Pig purchase month

Jan, 2014

Jan, 2014

Live hog sale month

Jul, 2014

Jul, 2014

Lean hog futures

$99.68

$0.72

Lean hog basis/cwt

($1.00)

($0.82)

Weighted average sbm futures

$412.05

($18.35)

Weighted average sbm basis

$2.01

$0.00

Weighted average corn futures

$4.32

($0.04)

Weighted average corn basis

($0.10)

($0.02)

Nursery cost/space/yr

$35.00

$0.00

Finisher cost/space/yr

$40.00

$0.00

Feed costs per head

$86.52

($1.61)

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 22,649 head reported, up 49 percent from the previous week. Cash prices were $84.09 per head, up $1.55 from the previous week. In 2013 there were 6 percent fewer weaner pigs reported sold in the spot market compared to 2012.

 

Reported

Weekly change

Cash sale weaner pig volume

22,649

7,423

Weighted average cash price/head

$84.09

$1.55

Cash low price/head

$80.00

$5.00

Cash high price/head

$88.00

$1.00

The number of reported weaner pigs sold on a formula basis was 41,347 head reported at an average price of $50.21. That’s down $1.12 per head from the previous week. In 2013 there were 18% fewer weaner pigs reported sold under formula compared to 2012.

ePigflow is collecting and reporting facility information. Below is a sample of facility contracts that have been written in the past 12 months.

  click image to zoomCooney

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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