This market update is a PorkNetwork weekly column reporting trends in weaner pig prices and swine facility availability. All information contained in this update is for the week ended December 4, 2015.
Looking at hog sales in June 2016 using June 2016 futures, the weaner breakeven was $49.55, up $4.92 for the week. Feed costs were up $1.53 per head. June futures decreased $4.92 compared to last week’s June futures used for the crush calculation and historical basis is more favorable compared to last week by $1.39. Breakeven prices are based on closing futures prices on December 4, 2015. The breakeven price is the estimated maximum you could pay for a weaner pig and breakeven when selling the finished hog.
|For the Week Ended||12/4/2015||Weekly Change|
|Weaner pig breakeven||$49.55||$4.92|
|Margin over variable costs||$71.38||$4.92|
|Pig purchase month||Dec, 2015|
|Live hog sale month||June, 2016|
|Lean hog futures||$74.38||$1.78|
|Lean hog basis/cwt||($1.92)||$1.39|
|Weighted average sbm futures||$287.44||$1.28|
|Weighted average sbm basis||($2.68)||$0.00|
|Weighted average corn futures||$3.85||$0.14|
|Weighted average corn basis||($0.26)||$0.00|
|Feed costs per head||$73.25||$1.53|
|Assumed carcass weight||205||0|
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. In addition, these calculations don’t take into account market supply and demand dynamics for weaner pigs and space availability.
From the National Direct Delivered Feeder Pig Report
Cash traded weaner pig volume was below average this week with 26,282 head being reported which is 86 percent of the 52-week average. Cash prices were $38.60 up $1.45 from a week ago. The low to high range was $27.00 to $44.00. Formula priced weaners were up $3.39 this week at $40.54.
Cash traded feeder pig reported volume was below average with 2,200 head reported. Cash feeder pig reported prices were $43.82 up $1.13 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 December 4th.
Graph 3 shows the estimated weaner pig profit by comparing the weaner pig cash price to the weaner breakeven. The profit potential increased $11.21 this week to $10.95 per head.