The agricultural industry anticipates the consequences of decreased corn prices on swine feed costs. Historical data reveals that corn prices have averaged $4.70 per bushel, while soybean meal prices averaged $361 per ton. However, projections indicate a promising decline in corn prices by approximately $2 per bushel in the fourth quarter of 2023, accompanied by a decrease of about $75 per ton in soybean meal prices. If these reducions materialize, they could hold significant implications for feed costs in the swine industry.
In the farrow-to-finish sector, the feed cost index is expected to decline from 104.8 in the second quarter to 101.1 and 91.2 in the third and fourth quarters, respectively. This suggests a downward trend in feed costs, although the full benefits of lower corn prices may not be realized until the fall harvest. Similarly, the swine finishing sector projects a gradual decrease in feed costs throughout 2023, with a feed cost index of 100.1 and 90.7 projected for the third and fourth quarters, respectively.
The analysis highlights the sensitivity of feed costs to changes in corn and soybean meal prices. A $0.10 per bushel increase in corn prices results in a $0.43 increase in feed cost per cwt., while a $10 per ton increase in soybean meal prices corresponds to a $0.36 increase in feed cost per cwt. These findings emphasize the impact that even small price fluctuations can have on feed costs in the swine industry.
In conclusion, the projected decline in corn prices brings hope for reducing swine feed costs in the latter part of 2023. Both the farrow-to-finish and swine finishing sectors are expected to witness a downward trend in feed costs, although the full benefits of lower corn prices may take time to materialize. Monitoring market trends and their impact on the swine industry is crucial due to the sensitivity of feed costs to variations in corn and soybean meal prices.Source : Indiana Agconnections