Westphalen: Weaner and feeder pig market insights

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 October 7, 2016.

Looking at hog sales in April 2017 using April 2017 futures the weaner breakeven was $18.80, up $2.40 for the week. Feed costs were up $0.35 per head. April futures increased $1.15 compared to last week's April futures used for the crush and basis was more favorable by $0.20 compared to last week. Breakeven prices are based on closing futures prices on October 7, 2016. The breakeven price is the estimated maximum you could pay for a weaner pig and

breakeven when selling the finished hog.

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 below average this week with 20,955 head being reported which is 67 percent of the 52-week average. Cash prices were $12.72, down $2.74 from a week ago. The low to high range was $8.00 to $23.00. Formula priced weaners were down $3.17 this week at $31.93.

Cash traded feeder pig reported volume was below average with 5,535 head reported. Cash feeder pig reported prices were $21.52, down $1.70 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 October 7, 2016.

Graph 3 shows the estimated weaner pig profit by comparing the weaner pig cash price to the weaner breakeven. The profit potential increased $5.14 this week to $6.08 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.