Compiled by OMAFRA Swine Team

Transcription

1 Farrow to Finish Return over Feed Margin Tracker - is an indicator of the margin after accounting for the variables with the greatest price risk (market hog, corn, and soybean meal). The margin is the return to cover all other variable and fixed costs Margin is simply the market hog value less feed costs. Tracking a margin provides hog producers a quick indicator of risk management opportunities or challenges. Time Periods on Graph: The green bars show the actual margins achieved as the pigs are marketed. The graph is broken down into the stages of production for Farrow to Finish as follows: Grow Finish Stage (blue) 16 weeks; Nursery Stage (orange) 7 weeks; On The Sow (purple) 3 weeks; and Gestation (red) 17 weeks. The black bars are for the Open Sows. These are estimated margins that will change each week depending of the hog and feed market future prices. $60 Margin Example of a benchmark margin value. It needs to cover all other variable and fixed costs. Margin ($/pig) = Market Hog Value ($/pig) Feed Cost ($/pig): Market Hog Value = 101% of weekly base price X 110 index X weekly avg. dressed weight + $2 premium Feed Costs for the various stage are based on using Corn (Avg. of Huron FOB Farm & Western Ontario Feed Corn), Hamilton Soybean Meal plus $20/tonne, commercial premix, and $20 per tonne (handling and mixing) Feed Budget based on 1,100 kg. of sow feed, 33.5 kg. of nursery feed, and approximately 270 kg. of grow-finish feed (based on 2.75 feed conversion and growing a 27 kg feeder pig to market weight). Projected values used for feed (corn and soybean meal) and market hogs are calculated using basis adjusted futures values at the market close on Thursdays.

2 Table 1: The table shows the monthly average data of the weekly data used to determine the weekly Farrow to Finish Margins. Data is based on the actual market information to date and values estimated with basis adjusted futures at the market close on Thursdays. Market Hog Price Weight Value Feed Cost Margin Month $/ckg, 100 index Kg $/pig Jan $ $178 $114 $64 Feb $ $191 $113 $79 Mar $ $249 $114 $135 Apr $ $281 $116 $165 May $ $253 $119 $134 Jun $ $257 $119 $138 Jul $ $286 $119 $167 Aug $ $256 $118 $139 Sep $ $230 $119 $111 Oct $ $251 $119 $132 Nov $ $210 $117 $93 Dec $ $202 $116 $86 Jan $ $191 $118 $73 Feb $ $163 $115 $48 Mar $ $158 $113 $45 Apr $ $178 $111 $67 May $ $195 $110 $85 Jun $ $200 $110 $90 Jul $ $206 $111 $96 Aug $ $208 $112 $95 Sep $ $182 $114 $68 Oct $ $183 $116 $67 Nov $ $163 $115 $48 Dec $ $168 $115 $53 M a r k e t e d E s t i m a t e d

3 Market Hog Prices ($/ckg, 100 index) Used to Calculate Market Hog Value Feeder Pig Formula Values ($/pig) The market and supply dynamics are not accounted for in the feeder pig formula value and the values are at time of placement on feed. Both graphs reflect the simple monthly averages of the weekly values. Estimates are based on basis adjusted lean hog futures and Canadian dollar futures at the market close on Thursdays.

4 Corn and Soybean Meal Values ($/tonne) Used to Calculate Feed Costs These are simple monthly averages of the weekly values. Feed costs are based on rolling average weekly values. Estimates are based on basis adjusted corn and soybean meal futures at the market close on Thursdays.

5 Hog Finishing Margin Tracker - is an indicator of the margin after accounting for the variables with the greatest price risk (market hog, feeder pig, corn, and soybean meal). The margin is the return to cover all other variable and fixed costs. Margin is simply the market hog value less the feeder pig and feed costs. Tracking a margin provides hog producers a quick indicator of risk management opportunities or challenges. Time Periods on Graph and Table 1: Actual - Market pigs have been marketed final result (figures will not change) Pigs on Feed - Feeder pigs purchased and on feed in the barn feeder pig value will not change but projected market hog values, feed costs, and margins will change weekly Looking Forward - All values are projected and will change weekly $25 Margin Example of a benchmark margin value covers all other expected costs Margin ($/pig) = Market Hog Value ($/pig) Feeder Pig Value ($/25 kg pig) Feed Cost ($/pig): Market Hog Value = 101% of weekly base price X 110 index X weekly avg. dressed weight + $2 premium Feeder Pig Value (25 kg) = 70% of the (Market Hog Value (16 weeks out) Current Weeks s Feed Cost Feed Cost is based on 16 week average using Corn (Avg. of Huron FOB Farm & Western Ontario Feed Corn), Hamilton Soybean Meal plus $20/tonne, commercial premix, and $20 per tonne (handling and mixing), 2.75 feed conversion, growing pig from 25 kg to market weight Projected values used for feed (corn and soybean meal) and market hogs are calculated using basis adjusted futures values at the market close on Thursdays.

6 Table 2: The table shows the data used to determine the weekly Hog Finishing Margins. Data is based on the actual market information to date and values estimated with basis adjusted futures at the market close on Thursdays. All figures are $/pig Actual On Feed Looking Forward Sale Week Month Jan Feb Mar Apr May June Friday Market Hog Value Feeder Pig Value Feed Cost Realized Margin Expected Margin * 2 $191 $77 $88 $26 $32 9 $194 $74 $89 $31 $34 16 $191 $79 $87 $25 $40 23 $190 $92 $87 $11 $40 30 $189 $92 $87 $9 $36 6 $181 $83 $88 $10 $34 13 $163 $80 $85 -$2 $33 20 $155 $77 $85 -$7 $35 27 $155 $81 $85 -$10 $37 6 $156 $85 $84 -$14 $37 13 $158 $87 $84 -$13 $36 20 $158 $83 $84 -$9 $35 27 $160 $81 $83 -$4 $33 3 $161 $78 $83 $1 $34 10 $184 $78 $82 $24 $34 17 $184 $79 $82 $24 $36 24 $185 $85 $81 $19 $37 1 $189 $86 $81 $23 $38 8 $193 $89 $81 $24 $37 15 $196 $87 $81 $28 $40 22 $201 $94 $80 $27 $33 29 $196 $77 $80 $39 $34 5 $196 $78 $80 $37 $35 12 $195 $81 $80 $34 $37 19 $202 $86 $80 $36 $38 26 $207 $90 $81 $37 $38 The Expected Margin (right hand column) is the estimated margin the week the feeder pig is placed on feed. This figure will not change and is a benchmark figure to compare the realized margin with. It is based on the initial calculated values for market hog, feeder pig, and feed. This calculation is done fifteen (16) weeks prior to the indicated date of the sale week.