Every Friday afternoon the USDA releases its weekly National Feeder Pig price report (http://www.ams.usda/gov/NW_LS255.txt). I’ve been tracking this report for many years now.
In today’s report, the composite formula base delivered price for weaned pigs was $39.60 per pig (up $1.12/pig from the previous week) while the composite spot market price quote was $49.35 per pig (down $6.24 per pig). For 40 pound feeder pigs the composite formula price was $72.34 (down $3.30) while the composite spot price was $76.54 (down $2.79).
The sharp down turn in the cash price for weaned pigs (it peaked at $52.97 2 weeks ago) and feeder pigs (it peaked at $81.88 2 weeks ago also) suggests that spot market buyers of pigs destined for sale this fall are carefully watching the futures market for their price signals. They apparently believe the futures market has seen a relative top and is headed towards a seasonal decline.
The formula prices don’t react as fast, and hence continue to be very favorable for sellers of weaned and feeder pigs. It is interesting to note that the reported formula price received for weaned pigs since January 1 has remained between $38.06 (week ending April 2) and $39.93 (week ending February 19) and averaged $39.05.
At the same time, the spot composite cash price has ranged from $44.17 (week ending February 26) to $52.97 (week ending April 30) with an average price of $47.25. The last time cash prices for weaned pigs were this high was the week ending December 16, 2005 when the composite cash price was $61.57 per pig.
For those selling weaned pigs on the spot market, it’s been a tough 4.5 years.