Current cash, strong lean hog futures and a Bank of Canada noon rate not seen since early 2020 (graph shown below) have combined to provide a significant opportunity for hog producers looking to reduce risk for the coming production year as indicated by the attached forward margin graphs.
For calculation purposes using an average farrow to finish feed cost of $141.00 (sow $15.00, wean to finsih $126.00) and all other fixed and variable costs at $70.00 for a total COP of $211.00, margins for the next 52 weeks are averaging near or above $30 CAD per head depending on contract arragements.
Of course for producers who have a COP different then $211.00, margin will be relatively higher or lowed however considering the current landscape and production expectations, the markets have aligned to provide opportunity for the remainder of 2024 and much of 2025. The combination of strong lean hog futures, a weak Loonie and relatively lower feed costs is a combination not seen at these levels for several years.
