Question:
I would like to understand how the National Negotiated barrow and gilt price relate to Peoria and interior Missouri live hogs price, futures hog contracts and profit for the farmer, and if possible have a margin profit table from 2013 up to date.Answer:
To explore the relationship between the Peoria live hog price, Interior Missouri live hog price, National negotiated prior day purchase base price, National negotiated slaughter base price, CME lean hog futures price, and farrow to finish profit, a correlation matrix of these series can be computed. The hog price series are highly correlated over the January 2002 – December 2015 period. The correlation between the price series’ and the farrow to finish profit series is weaker but still relatively strong. Farrow to finish profits responded predictably to hog prices, increasing as hog prices increase.
A 10-year (2006-2015) summary of estimated monthly returns to farrow to finish pig production in Iowa ($/head) are available on the Ag Decision Maker website, information file Monthly Swine Feeding Returns -- B1-31. The process of estimating returns reflects a cash market situation without price risk management strategies being implemented. Each month updates are made to reflect the most recent closeout estimates and to reflect current market conditions and are available at the Iowa State University Estimated Livestock Returns website.
