Recent jump in hog prices benefits Kansas producers
After a rough spell of negative margins through the fall and winter, a recent jump in cash hog prices--as high as $50 per hundredweight [cwt] in some areas--spelled "modest profits" for pork producers, a Kansas State University agricultural economist said.
Hog prices have been bounding higher since February, jumping as high as $50 per cwt on hogs in benchmark Iowa-southern Minnesota direct trade by mid-March.
"Break-even prices to cover all costs for farrow-to-finish producers will likely average around $42 per cwt on a live basis for first quarter 2001 production," said K-State Research and Extension livestock marketing specialist Rodney Jones. "At current prices, average Kansas producers are enjoying modest profits."
Longer term, Jones expects 10-pound hogs started on feed in February, and expected to finish in August, to continue to yield small profits.
"The projected sale price needed to cover all costs associated with finishing formula-priced early weaned pigs started on feed in February is $43.12 per cwt on a live weight basis. Pricing the weaned pig into the nursery-finish program at the mid-point of the recent Iowa-reported cash transfer price of $36.65, results in a projected break-even to cover all costs of $44.45 per cwt," he said.
"As has been the case in recent months, both the formula price and the traded market weaned pig price are yielding modest profits for farrowing operators."
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