Released Jan. 14, 2008
AMES, Iowa -- As lower hog prices and higher feed costs continue to pressure pork producer margins, Iowa State University Extension livestock economist John Lawrence said it’s time for producers to take a new look at their market weight strategies.
“While there often is a call for all producers to reduce weight to reduce supply, the real issue is what works for the individual,” Lawrence said. “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.”
Lawrence said 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. 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 at no charge through a link on the Iowa Pork Industry Center Web site at http://www.ipic.iastate.edu/. The spreadsheets can be downloaded to individual computers for continued use.
IPIC was established in 1994 as a coordinated effort of the colleges of Agriculture and Veterinary Medicine at Iowa State University. Its mission is to promote efficient pork production technologies in Iowa, maintain Iowa's pork industry leadership and strengthen rural development efforts. IPIC focuses its efforts in programs that are integral and complementary to work by ISU Extension. Through IPIC, Iowa producers receive accurate and timely information to aid in making their operations more efficient and profitable.
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http://www.extension.iastate.edu/news/2008/jan/151402.htm
Contacts: John Lawrence, (515) 294-6290, jdlaw@iastate.edu
Sherry Hoyer, (515) 294-4496, shoyer@iastate.edu
