Adjust Weights to Accommodate Feed Price
AMES - As lower hog prices and higher feed costs continue to pressure pork producer margins, Iowa State University Extension livestock economist John Lawrence says it’s time for producers to take a new look at their market weight strategies.
15 January 2008
2 minute read
“While there often is a call for all producers to reduce weight to reduce supply, the real issue is what works for the individual. If you are still marketing at the same weight that you did when corn was $2 a bushel and live hogs were near $60, it’s time to re-evaluate your decision," he advises.
The most profitable weight at which to sell is when the additional cost of the next pound is equal to the revenue of that pound, and prices of feed and hogs have changed. The concept is simple, but it’s more complicated in practice, says Lawrence. The cost of adding weight changes with feed prices, and additional weight can impact the lean premium and sort loss.
"We’ve developed some examples for producers to look at and also offer a spreadsheet calculator to help people work out what’s best for their operation," he said.
More information and two versions of a spreadsheet calculator are available to download www.Iowa Pork Industry Centre by following the links.
The most profitable weight at which to sell is when the additional cost of the next pound is equal to the revenue of that pound, and prices of feed and hogs have changed. The concept is simple, but it’s more complicated in practice, says Lawrence. The cost of adding weight changes with feed prices, and additional weight can impact the lean premium and sort loss.
"We’ve developed some examples for producers to look at and also offer a spreadsheet calculator to help people work out what’s best for their operation," he said.
More information and two versions of a spreadsheet calculator are available to download www.Iowa Pork Industry Centre by following the links.
