corn price

Dr. Steve Meyer - Meat/Poultry Economic Update & Outlook


Meat/Poultry Economic Update & Outlook - Dr. Steve Meyer, Paragon Economics, Inc., from the 2014 Missouri Pork Expo , February 11 - 12, 2014, Columbia, MO, USA.

Dr. Steve Meyer - Market Outlook for 2013 and Beyond


Market Outlook for 2013 and Beyond - Dr. Steve Meyer, President of Paragon Economics, from the 2013 Minnesota Pork Congress, January 16-17, Minneapolis, MN, USA.

June 2009 Lean Hog Futures Hits $100

After nearly getting there on June 24 of this year, the June 2009 Lean Hog Futures contract on the CME closed above $100 today.  It opened trading in mid April of this year in the high $80s.  If that price holds, it represents a near doubling of the carcass price for hogs since January of this year.

Don't worry though, we are constantly reminded that such a small percentage of commodity costs roll into the final retail price that you will probably not even notice this impact for the summer barbeque season next year. 

As for me, I'm still on the "buy the biggest freezer you can afford and fill it now" kick but you can wait if you like.  Try to get the cryovac type packaging if you take my strategy, it freezes well for a lot longer than the typical cellophane wrapped cuts. 

Increasing Profits in 2008: The Series Begins

Everyone is pretty much convinced that 2008 will be a year filled with red ink for those who only produce and market pigs. The bulk of the problem of course is the unfolding and misguided government policy which is supporting the doubling and maybe tripling of average corn prices with little or no impact on the goal the policy is supposed to address, namely: more freedom from foreign oil.

The cost of this miniscule increase in "freedom" will go far beyond the increased prices users of corn are paying world-wide as a result. I am going to take another stab at those costs soon since more and more is becoming known about the unintended and collateral consequences of all of this. But since we find ourselves here, with legislators of every political stripe in agreement that it is a very wonderful thing, we have to think again about how to reorganize the operation to keep from getting sunk financially.

Seeing Red in October

Mark Greenwood
November 2007

Seeing Red in October
This month will not be a good month for pork producer’s balance sheets. In a cost vs. revenue comparison, most systems will lose $10-$15/head during October. Some producers locked in some margins back in August, but most producers did not lock up a large percentage of their hogs with those margin opportunities.

Perhaps the reason more producers didn’t lock in more profits can be explained by reviewing the following December futures chart. You can see the volatility in this month. Many clients that I work with started to hedge for the fourth quarter right around the end of July. As you can see by the chart, it spiked up to $74 in early December. We had a massive amount of margin call money that went out and people stopped hedging because producers struggle with paying margin calls. The market went down and some people hedged a little more. Then the market bounced back up to nearly $70 again in early- to mid-September. Since, it has been a free-fall spiral downward.

Pick Your Prices and Forecast Your COP

     Here is a handy little abbreviated table to guesstimate your cost of production for a 270lb live weight animal.  Glenn Grimes at the University of Missouri has just indicated that there is a 100% probability that the average COP for pork producers in 2008 will start with a "5" on a liveweight basis.

     Within the table below, you pick a combination of corn price and soybean meal price.  If you pick the combinations in the top part of the table as your guess for the average 2008 feed ingredient prices, use the COP forecasts with a "1" label.  If you pick the corn price/bean meal price combination in the lower part of the table, choose the COP forecast with a "2" label.  I have provided them in both carcass and liveweight amounts to cover everybody's favorite way of thinking.

The Elephant in the Room Demands Some Time

One of the most revealing quotes I heard recently was “What would we be talking about if we didn’t talk about ethanol?” No doubt it is the elephant in the room for most livestock producers so it is important to spend some time on it but there are so many other interesting and important topics flying under the radar of the ethanol intoxication. We need to and will break out of this fixation and take a wider view soon. Regardless, here are some thoughts about the ethanol situation as it impacts corn prices and cost of production for pigs just to make sure the groundwork is set for future comments.

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