Farm Journal recently released a market update based off the PorkBusiness.com weekly column reporting trends in weaner pigs.
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 Aug. 20 and assumes Iowa-southern Minnesota cost and historical basis assumptions.
When you consider that today’s purchased weaner would be sold in February 2022, using April 2022 futures the weaner breakeven was $42.54, down $4.27 for the week. Feed costs were down $2.76 per head, and April futures increased $2.75 compared to last week, while historical basis declined from last week by $6.20 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 $61.81.