Weaner breakevens holding steady around $35

Looking at hog sales in February 2017 using April 2017 futures, the weaner breakeven was $34.83, up $0.09 for the week. Feed costs were down $2.35 per head. April futures decreased $1.13 compared to last week's April futures used for the crush. Breakeven prices are based on closing futures prices on August 26, 2016. 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

8/26/2016

Weekly Change

Weaner pig breakeven

$34.83

$0.09

Margin over variable costs

$54.10

$0.09

Pig purchase month

Aug, 2016

Live hog sale month

Feb, 2017

Lean hog futures

$65.98

($1.13)

Lean hog basis/cwt

($5.42)

$0.00

Weighted average sbm futures

$314.93

($9.55)

Weighted average sbm basis

($3.00)

$0.00

Weighted average corn futures

$3.30

($0.19)

Weighted average corn basis

($0.24)

$0.00

Nursery cost/space/yr

$35.00

$0.00

Finisher cost/space/yr

$40.00

$0.00

Feed costs per head

$66.39

($2.35)

Assumed carcass weight

205

0

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.

From the National Direct Delivered Feeder Pig Report

Cash traded weaner pig volume was above average this week with 31,742 head being reported which is 105 percent of the 52-week average. Cash prices were $19.52, down $1.24 from a week ago. The low to high range was $13.00 to $26.00. Formula priced weaners were up $1.28 this week at $35.22.

Cash traded feeder pig reported volume was below average with 6,124 head reported. Cash feeder pig reported prices were $29.71, up $1.98 per head from last week.

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

Graph 2 shows the cash weaner price and cash feeder price on a weekly basis through August 26, 2016.

Graph 3 shows the estimated weaner pig profit by comparing the weaner pig cash price to the weaner breakeven. The profit potential increased $1.33 this week to $15.31 per head.

Casey Westphalen is General Manager of NutriQuest Business Solutions, a division of NutriQuest.

NutriQuest Business Solutions is a team of leading business and financial experts that bring years of unparalleled experience in the livestock, row-crop and financial industries. At NutriQuest our success comes from helping producers realize improved profitability and sustainability through innovation driven by a relentless focus on helping producers succeed. For more information, please visit our website at www.nutriquest.com or email casey@nutriquest.com.

 
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