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 Feb. 2, 2024, and assumes CME Lean Hog Index cost and historical basis assumptions.
When you consider that today’s purchased weaner would be sold in August 2024 using August 2024 futures, the weaner breakeven was $87.39, up $9.63 for the week. Feed costs were down $0.01 per head, and August futures increased $1.77 compared to last week’s futures, while historical basis is improved from last week by $2.80 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 the buildings are stocked with weaners. For those producers with empty space, the maximum price a buyer could pay for a weaner and breakeven is the “margin over variable costs”, which is $113.01.
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 above average this week with 66,465 head being reported which is 107 percent of the 52-week average. Cash prices were $43.52, up $3.10 from a week ago. The low to high range was $30 to $55. Formula priced weaners were down $0.14 this week at $47.94.
Cash-traded feeder pig reported volume was below average with 7,835 head reported. Cash feeder pig reported prices were $57.32, up $9.47 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 Feb. 2, 2024.
Graph 3 shows the estimated weaner pig profit by comparing the weaner pig cash price to the weaner breakeven. The profit potential increased $6.53 this week to a projected gain of $43.87 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. 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 jenniferbrown@nutriquest.com.
