Westphalen: Weaner breakevens slip below $60

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 22, 2016.

Looking at hog sales in July 2016 using August 2016 futures, the weaner breakeven was $59.08, down $1.42 for the week. Feed costs were up $0.62 per head.

August futures decreased $0.17 compared to last week's July futures used for the crush and historical basis is less favorable compared to last week by $0.21. Breakeven prices are based on closing futures prices on January 22, 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


Weekly Change

Weaner pig breakeven



Margin over variable costs



Pig purchase month

Jan, 2016

Live hog sale month

July, 2016

Lean hog futures



Lean hog basis/cwt



Weighted average sbm futures



Weighted average sbm basis



Weighted average corn futures



Weighted average corn basis



Nursery cost/space/yr



Finisher cost/space/yr



Feed costs per head



Assumed carcass weight



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 49.225 head being reported which is 153 percent of the 52-week average. Cash prices were $60.20 up $2.78 from a week ago. The low to high range was $47.00 to $67.00. Formula priced weaners were down $1.00 this week at $42.73.

Cash traded feeder pig reported volume was below average with 7,350 head reported. Cash feeder pig reported prices were $71.30 up $2.73 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 January 22nd.

Graph 3 shows the estimated weaner pig profit by comparing the weaner pig cash price to the weaner breakeven. The profit potential decreased $4.20 this week to ($3.12) 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, grain, poultry 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.