This market update is a PorkBusiness.com weekly column reporting trends in weaner pigs. All information contained in this update is for the week ended Dec. 16.
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 Dec. 16 and assumes CME Lean Hog Index cost and historical basis assumptions.
When you consider that today’s purchased weaner would be sold in June 2023 using July 2023 futures, the weaner breakeven was $86.50, up $10.84 for the week. Feed costs were up $0.37 per head, and July futures increased $2.43 compared to last week’s futures, while historical basis is improved from last week by $2.91 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 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 $108.12.
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