Cash Feeder Pig Prices Average $63, Up $2.10 Last Week
By Jennifer Brown
This market update is a PorkBusiness.com weekly column reporting trends in weaner pigs. All information contained in this update is for the week ended July 16.
NutriQuest Business Solutions publishes weekly weaner pig profitability calculations which uses industry representative production costs and futures pricing for lean hogs, corn and soybean meal, using historical basis assumptions, to establish approximate profitability and break-even pricing for the current sale or purchase of weaner pigs. Prices are based on closing futures prices on July 16 and assumes Iowa-southern Minnesota cost and historical basis assumptions.
When you consider that today’s purchased weaner would be sold in January 2022, using February 2022 futures the weaner pig breakeven would be $51.01, up $12.65 for the week. Feed costs were up $2.92 per head, and February futures increased $3.80 compared to last week, while historical basis is improved from last week by $3.79 per cwt.
The “weaner pig breakeven” is an all-in break-even considering fixed costs (e.g., housing and labor) that would be incurred by the buyer. However, many buyers of weaners have empty space and therefore will incur these fixed costs whether or not the buildings are stocked with weaners. For those producers with empty space, the maximum price a buyer could pay for a weaner pig and breakeven is the “margin over variable costs”, which is $70.29.
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. If you are interested in establishing a tool for estimating weaner profitability for your own situation, please visit our website at www.nutriquest.com or email jenniferbrown@nutriquest.com.
From the National Direct Delivered Feeder Pig Report
Cash-traded weaner pig volume was below average this week with 36,725 head being reported which is 77% of the 52-week average. Cash prices were $38.99, down $1.81 from a week ago. The low to high range was $32-$48. Formula-priced weaners were up $1.24 this week at $42.03.
Cash-traded feeder pig reported volume was below average with 2,750 head reported. Cash feeder pig reported prices were $63.00, up $2.10 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 July 16.
Graph 3 shows the estimated weaner pig profit by comparing the weaner pig cash price to the weaner breakeven. The profit potential increased $14.46 this week to a projected gain of $12.02 per head.
Jennifer Brown is Director 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. For more information, please visit our website at http://www.nutriquest.com or email jenniferbrown@nutriquest.com.
More from Farm Journal's PORK:
Pork Industry Loses Appeal on Line Speeds
How Will the Economic Boom Impact U.S. Agricultural Businesses?
Germany Discovers First Cases of African Swine Fever in Farm Pigs
