Feeder pig prices have started to move seasonally lower during the summer months, says the Daily Livestock Report. Meanwhile, higher total costs are expected to remain a headwind for producers’ profitability in the near term.
A Look at the Numbers
Early weaned pig prices (10- 12 lbs.) spiked in February to $83.29 per head, the highest reported for the series going back to 2012. Since the peak, prices have dropped 50% or $41.64 per head to $41.65 last week.
“Compared to last year, last week’s early weaned pig price was 6% lower but compared to the five-year average the price was 38% higher. Typically, early weaned prices will bottom in July or August which means prices could still move lower before starting the seasonal move higher going into the second half of the year,” says the Daily Livestock Report.
A similar seasonal pattern is taking place in 40-pound feeder pig prices. During the last week of February, the 40-pound feeder pig price jumped to $122.28 per head which was the highest price since April and May of 2014 when prices ranged from about $126 to $139 per head for eight weeks.
“Since the peak price earlier this year, prices have fallen 44.7% or $54.61 per head. Year-to-date, last week’s price of $67.67 per head was the lowest reported which was 4.2% below the same week last year but compared to the five-year average the price was 41% higher. Seasonally, prices are expected to continue moving lower as they typically bottom in August,” says the Daily Livestock Report.
Estimated Returns for Wean-to-Finish Operations
In the May 2022 Iowa State University report on estimated returns for a wean-to-finish operation, the total profit for the month was $5.81 per head. Although profits were positive in May, compared to the prior month, profits fell $6.11 per head (51.2%) and from a year ago, profits have fallen 87% or $39.39 per head, the Daily Livestock Report says.
“The decline in profits is partly due to higher prices for feeder pigs which rose 32% or $12.31 from last year. In recent months, higher feed costs have been a leading cause to reduced profit levels. In May, total feed costs were $114.36 per head which is 17% or $16.97 per head higher than a year earlier. The higher feeder pig prices and feed costs pushed total costs to $209.71 per head in May,” says the Daily Livestock Report.
Iowa State University reports dating back to 2002 show that total costs for a wean-to-finish operation have only been above $200 per head four times: May 2022 ($209.71), June 2013 ($202.48), April 2022 ($200.97), and August 2021 ($200.12).
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