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.
Not every price combination is there but it gives you a little something to play with as the New Year approaches. Today, the closing futures prices for 2008 for corn and soybean meal indicate an expected average COP for hogs to be $68.61/cwt carcass or $52.15/cwt live using the formulas which underlie this approach in the table.
Happy New Year!
