livestock market trends - farmsmart · data source: daily livestock report, january 16, 2014...

Livestock Market Trends Farm$mart Agricultural Conference

January 18, 2014

John Bancroft Market Strategies Program Lead

[email protected] 519-271-6974

mailto:[email protected]

Today’s Discussion

• 2014 FCC Market Drivers (5) • Other Items to Watch • Cattle & Hog Price Market Trends • Manage the Margin$

• Farmland market slowing down – Crop prices retreating, may be less aggressive – Past rates above rate of inflation and productivity gains – Factors to consider are crop supply and value and long term

interest rates

• Trade – Comprehensive Economic Trade Agreement (CETA) – Trans-Pacific Partnership (TPP) – U.S. Country of Origin Labeling (COOL) – Free Trade talks with South Korea

FCC Top Five Economic Drivers for 2014 (Source: www.fcc-fac.ca )

http://www.fcc-fac.ca/



Expectation that 43% will be exported

Source: Beef Supply at a Glance, January 4, 2014

Value Up 8%

71% U.S.

79% beef imports from the U.S.

Source: Beef Supply at a Glance, December 28, 2013

Canada – Pork Exports & Imports

31% to U.S.

Source: Hog Statistics at a Glance, January 4, 2014

Export Value down

1.6 %

Imports down 1.5 % with 93% from U.S.

21% of Production Exported

0

1,000

2,000

3,000

4,000

5,000

6,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Data Source: Monthly U.S. Livestock and Meat Trade Data, http://www.ers.usda.gov/Data/MeatTrade/

U.S. Pork Exports (millions of lbs) USDA ForecastsJan 2014

• U.S. Economy Improves – Remains divisive – Consumer debt declining since 2008 – Labour market showing some signs of improvement – U.S. Dollar showing some strengthening

• Agricultural Equipment Sales Retreat – 2006 to 2012 – 2,100 tractors/month – 2001 to 2005 – 1,540 tractors/month – Lower crop returns and Value of Canadian Dollar





• Strength in Red Meat – Expectation of healthy returns over the next 2 years – Declining versus Stabilized versus Growth – Canadian red meat consumption stabilizing and growing

meat demand in emerging markets


Demand for Meat

x Consumer Tastes & Preferences x Consumer Disposable Income x Prices of Competing Meats x General Economic Conditions (Domestic & Foreign)




• 2014 Crop – 2013 crop size reduced the cost pressure – Increased world crop production over time – Weather – Demand - Comfortable versus tight ending stocks

Other Items to Watch in 2014

$125

$150

$175

$200

$225

$250

$275

$300

$325

*

2007 2008 2009 2010 2011 2012 2013 2014Data Source: Actual Data from Daily Ontario Commodity Report and Estimated Data based on basis

adjusted closing futures

Avg. Huron Corn FOB Farm & Western Ontario Feed Corn ($/tonne)Actual Data Estimated

Moving from Tight Supply to Surplus

$150

$160

$170

$180

$190

$200

$210

$220

$230

$240

$250

$260

$270

$280

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2013 2014

Corn Average Monthly Value ($/tonne) Average of Huron FOB Farm & Western Ontario Feed Corn

Actual Estimated

Supply - Basis

$3.50

$3.75

$4.00

$4.25

$4.50

$4.75

$5.00

$5.25

$5.50

$5.75

$6.00

40 1 26 1 26 39

O N D J F M A M J J A S O N D J F M A M J J A S

Pre Plant Growing Season Harvest Storage PhaseData Source: Daily Ontario Commodity Report

Corn -Weekly Average Huron FOB Farm ($/bu)Old Crop Corn (2013-2014) New Crop Corn (2014-2015)

Supply - Basis

$250

$300

$350

$400

$450

$500

$550

$600

$650

$700

- -

2007 2008 2009 2010 2011 2012 2013 2014

Soybean Meal Weekly Avg. Prices (C$/tonne, Hamilton + $20)

Tight Supply – Exports – South America

$400

$420

$440

$460

$480

$500

$520

$540

$560

$580

$600

$620

$640


2013 2014

Soybean Meal Values ($/tonne) Hamilton + $20/tonne

Actual Estimated

2014 – 2015?

Impact on Feed Costs

$40

$45

$50

$55

$60

$65

$70

$75

$80

$85

$90

$95

$100

$105

$110

$115

- -

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Based on Feed Costs used in Hog Finishing Margin Tracker

Grow-Finish Feed Cost ($/pig)Actual Estimated

Data Source: Daily Livestock Report, January 16, 2014

• Meat Demand – U.S. pork consumption outpacing the sales of all meat

products – Spending more $ on meat even with per capita income

remaining level – Modest population growth and export growth – Food safety and farm practice issues tend to impact the

demand of middle income countries


Pork @$3.81 in Oct. – Beef @ $5.41 in Nov.

$2.94 $2.92$3.11

$3.43 $3.47$3.64

$4.33 $4.26 $4.38

$4.81 $4.99

$5.29

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

2008 2009 2010 2011 2012 2013Data Source: : http://www.ers.usda.gov/briefing/foodpricespreads/meatpricespreads

U.S. Pork and Beef Retail Average Yearly Price (US$/pound)Pork Beef

• Codes of Practice for the Care and Handling of Beef Cattle and Pigs in Canada – National Farm Animal Care Council's Pig Code

Development Committee finalized its updated Code of Practice for the Care and Handling of Pigs in Canada

– The document has now been submitted for editing – Once the updated code has been edited and the final

version approved by the committee it will need to be translated at which point it will be ready for public release.

– Committee expects it will be released by late winter or early spring

– Code of Practice for the Care and Handling of Beef Cattle has been posted

http://www.ontariobeef.com/uploads/userfiles/files/beef_code_of_practice.pdf


http://www.ontariobeef.com/uploads/userfiles/files/beef_code_of_practice.pdf

• Canadian Dollar


Source: London Free Press, Jan. 11, 2014

$0.60

$0.65

$0.70

$0.75

$0.80

$0.85

$0.90

$0.95

$1.00

$1.05

$1.10

*

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Weekly Average Value of the Canadian Dollar ($US)Noon Hour Bank of Canada Rate CME Canadian Dollar Futures

Long Term Trend of Canadian Dollar

$0.86

$0.88

$0.90

$0.92

$0.94

$0.96

$0.98

$1.00

$1.02

$1.04

-$1.5000

-$1.2500

-$1.0000

-$0.7500

-$0.5000

-$0.2500

$0.0000

$0.2500

$0.5000

$0.7500

$1.0000

1 13 26 39 1 26 34

O N D J F M A M J J A S O N D J F M A M J J A

Growing Season Harvest Storage Phase

Adjusted Basis = Local Soybean Price ÷ Exchange Rate - Soybean Futures

Weekly Average Soybean Basis Basis Adjusted Basis Canadian Dollar

Impact on Crop Basis

Source: http://beefmagazine.com/cow-calf/industry-glance-us-cowherd-liquidation Feb. 7, 2013


http://beefmagazine.com/cow-calf/industry-glance-us-cowherd-liquidation











Stabilized?

3,000

3,500

4,000

4,500

5,000

5,500

6,000

2005 2006 2007 2008 2009 2010 2011 2012 2013Data Source: Statistics Canada

Canada - Beef Cow Herd ('000 of Head) - January 1Jan 1st July 1st

Dramatic Reduction – Stabilized?

250

275

300

325

350

375

400

425

450

475

500

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Data Source: Statistics Canada - Cattle Statistics, 23-012-X

Trends in the Ontario Beef Cow Herd (1,000 of Head) - Jul. 1Inventory on July 1, 2013 - 276,300 cows

- 30%

- 20%

+ 30%+ 7%

20

40

60

80

100

120

140

160

180

200

220

240

260

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Data Source: Statistics Canada

Ontario - Beef Heifers - July 1 ('000 of Head)

Replacement Slaughter

Slight Decline?

800

850

900

950

1,000

1,050

1,100

1,150

1,200

1,250

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Data Source: Statistics Canada - Cattle Statistics, 23-012-X

Trends in the Ontario Cattle on Feed (1,000 of Head) - July 1Cattle on Feed = Heifers for Slaughter + Steers (+ 1 yr) + Calves (< 1 yr)

Level to Down

• With little information available since the January 1, 2013 Cattle report, the state of replacement heifer retention is largely unknown ahead of the January 1, 2014 estimates.

• Heifers have constituted relatively large shares of feedlot placements and inventories in 2013.

• These high heifer proportions of cattle on feed, combined with the relatively large cow slaughter, will likely result in another year-over-year decline in total cow inventories on January 1, 2014.

Source: December 2013, USDA Livestock, Dairy, and Poultry Outlook

Will Cow Slaughter Slow?

• Some heifers that had been placed on feed and destined for slaughter could be returned to the country as replacement heifers under the right conditions.

• As mentioned last month, the anticipated inventory dynamics would push any significant increases in beef production well into the future, likely into 2017 or beyond.

• Of course, weather—especially drought-related—could alter any projections.

Source: December 2013, USDA Livestock, Dairy, and Poultry Outlook

Will Cow Slaughter Slow?

U.S. Beef Production & Exports - 2014

• USDA Beef Production projection for 2014 is down 5.25 %

• Current USDA Forecast for 2014 Beef & Veal Trade Exports down 8% ; Imports Up 1.4%

Relatively level – Surprises in Dec. #’s

5,600

5,800

6,000

6,200

6,400

6,600

6,800

7,000

7,200

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Data Source: USDA Hogs & Pigs Reports

U.S. Quarterly Sow Inventory (1,000 of Head)

5,963,000

+ 4.5%

6,918,000

- 14% 5,757,000

6,233,000

- 6.8%

Level

1,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350

1,400

1,450

1,500

1,550

1,600

1,650

J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Data Source: Hog Statistics, Statistics Canada

Canada - Sow Inventory ('000 of Head)

Level

280

290

300

310

320

330

340

350

360

370

380

390

400

410

420

430

440

J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju J Ju

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Data Source: Hog Statistics, Statistics Canada

Ontario Sow Inventory ('000 of Head)

Productivity

9.60

9.80

10.00

10.20

10.40

10.60

10.80

11.00

11.20

11.40

11.60

11.80

12.00

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Data Source: Hog Statistics, Statistics Canada

Ontario - Yearly Average Pigs Born per Sow Farrowed

Up – 4th Quarter up 5.7 pounds

196

198

200

202

204

206

208

210

212

214

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

Data Source: http://www.ams.usda.gov/mncs/mn_reports/SJ_LS711.txt

U.S. Barrow & Gilt Weekly Average Dressed Weight - (lbs.)

2013 2014 2012

4th Quarter up 1.71 kilograms – 99.2

83.484.0 84.1

85.686.5

87.688.4

89.2 89.690.1 90.2

91.091.7

92.4 92.7 92.993.7

96.396.9

97.9

80

82

84

86

88

90

92

94

96

98

100

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13Data Source: Ontario Pork Sales Data

Ontario Average Yearly Dressed Weight (kg)

Porcine Epidemic Diarrhea • December USDA Hogs and Pigs Report

– Impact is showing up in pigs weaned/litter, inventories, and hog marketings

Wild Card - PED

1st half of 2014 – down- even-up?

Market Price Trends

“I wish you’d wear a hat in there. I’ve

been looking all over for you!”

Calves

$95

$105

$115

$125

$135

$145

$155

$165

$175

$185

$195

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Data Source: OCA Market Information

Ontario Weekly Avg. Prices - Large & Medium Frame Steers (500-599 lbs.)

2013 2014 3 Yr Avg ('11 to '13)$/cwt.

Feeders

$80

$90

$100

$110

$120

$130

$140

$150

$160

$170

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52


Ontario Weekly Avg. Prices - Large & Medium Frame Steers (800-899 lbs.)

2013 2014 3 Yr Avg ('11 to '13)$/cwt.

$90

$95

$100

$105

$110

$115

$120

$125

$130

$135

$140

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52


Ontario Weekly Avg. Prices - Large & Medium Frame Steers (1250+lbs.)

2013 2014 3 Year Avg. ('11 to '13)$/cwt.

Market

Long Term Cattle Price Picture

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

$140

$150

* - *

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


Ontario Weekly Avg. Prices - Large & Medium Frame Steers (1250+lbs.)

$5$10$15$20$25$30$35$40$45$50$55$60$65$70$75$80$85$90$95

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Data Source: National Direct Delivered Feeder Pig Report - NW_LS255

U.S. Early Weaned Pig - Cash Values (US$/pig)2013 2014 3 Year Avg. ('10 to '12)

Up

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Data Source: National Direct Delivered Feeder Pig Report - NW_LS255

U.S. 40 Pound Feeder Pig - Cash Base Values (US$/pig)2013 2014 3 Year Avg. ('10 to '12)

Up

Long Term US Hog Prices

$40

$45

$50

$55

$60

$65

$70

$75

$80

$85

$90

$95

$100

$105

$110

* *

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Weekly Ontario U.S. Reference Price (U.S.$/cwt.)(U.S. CME Constructed Price)

2014 US Hog Prices

$50

$55

$60

$65

$70

$75

$80

$85

$90

$95

$100

$105

$110

1 13 26 39 52

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

A Snapshot of 2014 U.S. Reference Hog Prices (US$/cwt)

2014 Actual Prices Estimated Prices 2014 3 Year Avg ('11 to '13)

$146.01

$151.59

$189.38$187.03

$121.42

$124.19

$163.22$174.62

$136.55 $137.02

$167.73

$149.56

$131.99$125.38 $125.79

$117.16

$139.88

$161.29

$154.64

$167.16

$100

$110

$120

$130

$140

$150

$160

$170

$180

$190

$200

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Ontario 100% Formula Base Yearly Average Prices ($/ckg, 100 index)

Long Term Ontario Hog Prices

$100

$110

$120

$130

$140

$150

$160

$170

$180

$190

$200

* *


Base Formula Price =(U.S. Reference Price - $0.56) x 0.74 x 2.2046 ÷ CME Canadian Dollar Closing Value ÷ 0.80 ÷ 1.1195

Ontario Weekly 100% Base Formula Price ($/ckg, 100 index)2013 2014 3 Year Average ('10 to '12)

2014

$100

$110

$120

$130

$140

$150

$160

$170

$180

$190

$200

$210

$220

1 13 26 39 52


A Snapshot of 2014 Ontario Hog Prices (C$/ckg, 100 index)

2014 Actual Prices Estimated Prices 2014 3 Year Avg. Prices ('11 to '13)

2014

Long Term Ontario Hog Prices

$80

$90

$100

$110

$120

$130

$140

$150

$160

$170

$180

$190

$200

$210

$220

* *

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Weekly Ontario Hog Price (C$/ckg, 100 index)(CME Constructed Price - $0.56) x 0.74 x 2.2026 x Exchange Rate ÷ 0.80 ÷ 1.1195)

Market Decision$ Challenge

• Use market information and intelligence to make informed decisions to achieve your goals!

• “Which is greater – the factors that could cause the markets to fall or the factors that could make the markets rise over the next few months”

• Beware of market seasonality • What is the potential impact on your risks?

i.e. price, margin, cash flow, and financial risks

Key Performance Indicator (KPI)

Managing Your Margin$


• Margin is the revenue left after pig and feed costs or after cattle and feed

• Quick indicator of return after accounting for the variables with the greatest risk

• Monitor hog/cattle and feed markets for current and future sales (forward looking)

• What is a reasonable margin for your farm • Focus on the margin versus the price and cost

(trying to take control of some of the marketing emotion)

Cost of Production Item Weight (lbs) $/cwt. $/Head $/cwt.Market Steer 1,450 $133 $1,929 $133Yearling steer 850 $154 $1,307 $90Feed Tonnes $/tonneCorn Silage 1.21 $40 $49Corn 1.79 $171 $307Supplement 0.13 $407 $53Total Feed Cost $408 $28Yardage (health, interest, marketing, etc.) $153 $11Total Costs $1,869 $129Net Return $59 $4

Data Source: Ontario Beef Producers – Weekly Breakeven for Yearly Steers

Cattle Margin Tracker$

-$20

-$15

-$10

-$5

$0

$5

$10

$15

$20

$25

$30


2013 2014Margin ($/cwt.) = (Market Steer Value - Yearling Steer Value - Feed Cost of Gain Value) ÷ 14.50 cwt.

Cattle Finishing Margin Trend ($/cwt.)Marketed On Feed Estimated

The Ingredient$

$150

$160

$170

$180

$190

$200

$210

$220

$230

$240

$250

$260

$270

$280


2013 2014


Actual Estimated

$90

$95

$100

$105

$110

$115

$120

$125

$130

$135

$140

$145


2013 2014

2013 & 2014 Ontario Fed Cattle Prices ($/cwt)Actual 1250+ Steer Price Estimated Prices 5 Year Average Prices

$100

$105

$110

$115

$120

$125

$130

$135

$140

$145

$150

$155

$160

$165

$170

$175

$180


2013 2014

Feeder Cattle Price Trend - 800 to 900 Pound ($/cwt.)Actual Prices Estimated Prices 3 Year Average

$30

$32

$34

$36

$38

$40

$42

$44

$46

$48

$50

$52

$54

$56

$58

$60


2013 2014

Corn Silage Calculated Monthly Value ($/tonne) Corn Value Divided by 8.5

Based on Actual Corn Values Based on Estimated Corn Values

Thank You! Market Yearling Feed Margin Corn ($/bu) Silage ($/tonne)

Jan $117 $139 $113 -$11 $6.75 $57

Feb $118 $130 $120 -$8 $6.79 $58Mar $117 $140 $115 -$13 $6.90 $59Apr $114 $134 $108 -$9 $6.13 $52May $121 $128 $105 $2 $6.34 $54Jun $125 $134 $103 $3 $6.54 $56Jul $124 $134 $97 $5 $6.33 $54

Aug $124 $126 $95 $11 $5.93 $50

Sep $119 $130 $93 $5 $5.53 $47Oct $120 $124 $90 $10 $4.49 $38Nov $123 $127 $86 $13 $4.13 $35Dec $121 $132 $80 $11 $4.26 $36Jan $138 $137 $75 $27 $4.30 $37

Feb $140 $144 $71 $26 $4.38 $37Mar $138 $147 $68 $23 $4.44 $38Apr $130 $154 $67 $12 $4.48 $38

May $138 $149 $67 $22 $4.53 $38Jun $136 $156 $68 $16 $4.58 $39

Jul $133 $153 $69 $15 $4.63 $39Aug $134 $160 $70 $12 $4.69 $40Sep $129 $163 $70 $4 $4.74 $40Oct $129 $164 $71 $4 $4.52 $38Nov $129 $162 $71 $5 $4.52 $38Dec $130 $162 $71 $6 $4.62 $39

Feed Inputs Production Stage

Fed Cattle Margin Calculator

2013

2014

$/cwt.

Looking Forward

On-Feed

Marketed

Thank You! Cattle Margin Tracker$

Market Yearling Feed Margin Corn ($/bu) Silage ($/tonne)

Jan $138 $137 $75 $27 $4.30 $37

Feb $140 $144 $71 $26 $4.38 $37

Mar $138 $147 $68 $23 $4.44 $38

Apr $130 $154 $67 $12 $4.48 $38

May $138 $149 $67 $22 $4.53 $38Jun $136 $156 $68 $16 $4.58 $39

Jul $133 $153 $69 $15 $4.63 $39

Aug $134 $160 $70 $12 $4.69 $40

Sep $129 $163 $70 $4 $4.74 $40

Oct $129 $164 $71 $4 $4.52 $38

Nov $129 $162 $71 $5 $4.52 $38Dec $130 $162 $71 $6 $4.62 $39

2014

$/cwt.

Looking Forward

On-Feed

Feed Inputs Production Stage

Fed Cattle Margin Calculator

Farrow to Finish Margin Tracker$

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

1 13 26 43 52Jan Feb Mar Apr May June Jul Aug Sept Oct Nov Dec

Return over Feed Margin = Market Hog Income - Feed Cost (Farrow to Finish)

2014 Farrow to Finish Return over Feed ($/market pig)Marketed Grow Finish Nursery On Sow Gestation Open Sows

Hog Finishing Margin Tracker$

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Jan Feb Mar Apr May June Jul Aug Sept Oct Nov Dec

Actual Pigs on Feed Looking Forward

2014 Hog Finishing (C$ per Market Pig) Margin = Market Hog Value - Feeder Pig Value - Feed Cost

Actual Pigs on Feed with Est. Feed & Market Pig Values Est. Feeder Pig, Feed & Market Pig Value

The Ingredient$

$100

$110

$120

$130

$140

$150

$160

$170

$180

$190

$200

$210


2013 2014

Ontario Market Hog Price ($/ckg, 100 index)Actual Estimated

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110


2013 2014Feeder Pig Value = 70% of (Market Hog Value 15 weeks out - Current Week's Feed Cost)

Feeder Pig Formula Value (C$/pig)Actual Estimated

$400

$420

$440

$460

$480

$500

$520

$540

$560

$580

$600

$620

$640


2013 2014

Soybean Meal Values ($/tonne) Hamilton + $20/tonne

Actual Estimated

$150

$160

$170

$180

$190

$200

$210

$220

$230

$240

$250

$260

$270

$280


2013 2014


Actual Estimated


• Provides an insight relative to assumptions • Feeder pig formula does not account for

market supply and demand dynamics • Remember futures are a moving target and

assumed basis will vary from current basis • Remember why you made the decision …managing your risk (price, cost, production, cash flow, financial, margin, etc.)

Access OMAF and MRA • Website www.ontario.ca/omafra

• Agricultural Information Contact Centre – Tel: 1-877-424-1300 – Email: [email protected]

• Agricultural Business Management –Website www.ontario.ca/agbusiness

• Livestock – Website www.ontario.ca/livestock

Thank You!

http://www.ontario.ca/omafra

mailto:[email protected]

http://www.ontario.ca/agbusiness

http://www.ontario.ca/livestock

livestock market trends - farmsmart · data source: daily livestock report, january 16, 2014...

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