By: Emily Miller, Ph.D.
Monogastric On-Farm Technology and Product Performance Specialist
If only we could see into the future! We would know when market hogs would be worth the most and when feed costs would be most economical. Unfortunately, I don’t think anyone has that crystal ball.
However, by considering historical and present-day markets, it is possible to make a prediction for future hog and commodity prices. Those at TrueAg, which is a Canadian company, have developed ProHog, a modelling solution for the swine industry to make those predictions. They do so by tracking data from several streams, bringing it all into one centralized place, and integrating that data. The result is a model capable of providing a well-rounded output, allowing subscribers to better understand the markets that impact swine producers.
Together with TrueAg, Fortified Nutrition is sending out reports customized for our business and those we are working with. These weekly reports estimate the future margin per pig from a farrow to finish operation each month for the coming year (Figure 1). Some of the information used:
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- Current and futures commodity (plus location) and hog prices (CME Lean Hog Market Contracts)
- Common feed rations from farrow to finish to estimate future feed costs, customized for Fortified Nutrition
- An average level of production for a farrow to finish farm
- Non-feed costs of production
- The following processors and grids: Maple Leaf Sig 4, Brandon, MB; OlyW21 R2, Red Deer AB; Maple Leaf Sig 4, Lethbridge, AB
- All data is incorporated to calculate the projected margin per pig for the coming year Margin = $/pig – (Feed COP + non-feed COP) + cull sow revenue
By gaining access to predicted hog and commodity prices, feed costs, and margin per hog, it can help with business decisions on farm. For example, how are prices of market hogs expected to change with the seasons? Where is the price of soybean meal expected to go? Should you consider buying more of a certain commodity? Should you consider a change in your premix to better accommodate the commodities that are most economical? Should you consider adding to your operation or finishing all your own hogs? The weekly Margin Updates can provide some insight into the predicted hog and commodity market situations for the coming year.
Are you interested in receiving these weekly margin Updates directly to your inbox? Scan the QR Code or email support@onfarmbi.com to subscribe.
Would you like to have a customized prediction for your operation? Fortified Nutrition can help you with that! Speak to your representative today or email: support@onfarmbi.com.
This article was also written for the Fall 2024 Western & Prairie Swine Grist. To read the whole Western Swine Grist, click the button below.