Optimism is returning to the hog market. For the week ending September 28, 2012 the average spot market price as quoted by USDA for weaned pigs was $15.14 per pig delivered. This week’s average price was $43.76 per pig delivered. In 5 weeks the spot market value of weaned pigs increased $28.62 per pig. The lowest reported price paid per pig went from $9 per pig to $27 per pig.
Forty (40) pound feed pig spot prices increased from $20.20 per pig to $42.93 per pig for the same period.
All of this suggests that producers have lost the urge to sell sows. The spot market price is high enough now that sale of weaned pigs will generate enough income to cover most if not all of a units cash costs and in most instances even fixed costs. The spot feeder pig price isn’t high enough to cover all costs yet, but the $22.73 per head increase in price sure makes a difference in outlook for those producing pigs for this market.
Because of producers efforts this fall to aggressively sell slaughter pigs lighter, there are plenty of facilities being offered for contract production. Some of the systems that I work with say they are getting calls daily offering them wean-finish, nursery and/or grow-finish facilities. In many cases the systems have sufficient facilities since they also lowered their target sales weights in response to high feed prices.
With the luxury of extra space, new crop corn and cool weather, pig performance this fall has been tremendous in healthy flows. In think in the next few months we will see a lot of grow-finish closeouts above 2.0 lb/d daily gain and some of you may have wean-finish closeouts above 1.8 lb/d. Performance like this makes for a juggling act as the marketing people continue to try and sell pigs lighter. My best guess is that weights will continue to climb like they do every fall in spite of everyones best attempts to sell lighter. We just won’t go as heavy as would have been expected.