Estimated hog returns have improved significantly compared to a year ago, which were a loss of $13.50 per head. In Iowa State University’s estimated returns for a wean-to-finish hog operation, a profit of $13.83 per head was noted for July, according to authors of the latest Daily Livestock Report.
Estimated returns over the last six months have ranged from a profit of $5.49 per head in February to $21.95 per head in May with an average of $14.99 per head. Over the last 12 months, estimated returns have averaged a profit of $0.97 per head, but the range has been wider from a loss of -$21.38 per head to a profit of $21.95 per head, the report noted.
Feed costs have moved much lower over the last 12 months, providing needed relief for producers.
- In July 2023, total feed costs were $108.70 per head, one year later total feed costs fell -24.2% ($26.28 per head) to $82.42 per head, which is the lowest since January 2021 ($78.47 per head).
- A -31.5% ($16.81 per head) decline in corn feed costs from last year to $36.63 per head in July has been a contributing factor to lower total feed costs.
- Soybean meal feed costs were $15.67 per head in July, down -17.3% ($3.29 per head). In July, dried distillers grains were $9.77 per head, a decrease of -28.2% ($3.84 per head) from last year.
“The cost of a 12-lb. weaned feeder pig is one variable cost that is a factor into estimated returns for a wean-to-finish hog operation. Based on Iowa State University’s estimated returns, a market ready hog sold in July would have been purchased in January. At that time, a weaned feeder pig cost $39.64 per head, which was a decline of -37.3% ($23.62 per head) from the prior year,” the authors of the report wrote.
During February and March, weekly feeder pig prices increased to the mid-$50 per head range. Since the peak feeder pig price in March, prices have dropped seasonally lower with the most recent price in early August at $29.78 per head.
“The breakeven selling price in July was calculated to be $91.10 per cwt; this is down -10.6% ($10.80 per cwt) from a year ago. Last week, the slaughter hog price (national, weighted average carcass price) was $88.32 per cwt, which was below the breakeven price of $91.10 per cwt in July,” the authors of the report said. “Last week’s slaughter hog price falling below the July breakeven selling price signals that profitability may be limited for a wean-to-finish hog operation in August.”
