Weanling prices rebound as feed price dips

Anyone expecting to find depressed farmers and a morose outlook at Manitoba Hog and Poultry Days would have been surprised.

The show wasn’t deserted and lots of farmers wandered the aisles of the trade show, looking to spend money on their recently money-losing operations.

“If there’s an economic benefit at the end of the day, and a quick return on investment, people are definitely willing to consider it,” said Rick Bergmann of Paradigm Agri-Solutions, who brought several U.S. representatives for products he supplies to Manitoba hog farms.

Bergmann said weanling and forward hog prices are back to profitable levels, so the farmers who are still in business have probably survived the recent calamitous financial downturn.

“The ones who are in it today are the ones who are going to be here tomorrow,” said Bergmann.

Spring and summer Chicago lean hog futures don’t offer big profits, but they offer acceptable returns for farmers to restock their barns with feeder pigs when combined with feed prices that are much lower than in July and August.

That has caused weanling prices to skyrocket, with prices surging to $50 to $65 per weanling from a low of less than $10.

Most producers can make a profit with a mid-$30s price.

Weanling hog producers suffered the most when the downturn hit. The first response of many U.S. hog producers to the Midwest drought was to empty their barns so that they didn’t have to feed pigs.

That pushed prices down for slaughter animals, but the lack of demand for weanlings caused prices in that sector to crash.

However, Chicago hog futures now look profitable, and there’s a scramble to fill barns. There are fewer weanlings for feeder barn operators to buy because some producers have liquidated their sows and some have gone bankrupt.

Eric Aubin, who oversees breeding stock sales for DanBred North America’s Quebec and Manitoba markets, said many farmers have faced grave financial challenges in Quebec and Manitoba, but Manitoba’s weanling producers seemed to have suffered most. Quebec’s operations are mainly farrow-to-finish, so they didn’t face the same collapse.

Demand for breeding stock there has continued, although there was a weak period in the midst of the drought-induced crop price rally.

“Our company is doing quite well,” said Aubin.

“We have seen some reduction, and we sold less breeding stock for awhile, but each producer has his own set of concerns and his own way of getting through the bad times.

Darin Kuhlow of Continental Plastics, a Wisconsin company that provides boar semen extender, said farmers won’t back away from products like his, even if they are having money trouble.

He shared Bergmann’s view that the farmers who have survived to this point will carry on.

“I think the ones that are still in the business are used to these wild fluctuations in economic cycles and some are still hanging on by their fingernails, but they find strategies to survive.”

Bergmann said it may seem odd that farmers who have so recently survived a historical downturn would consider reinvesting in their farms, but farmers want to farm for as long as they can, regardless of profitability.

“All they want to do is make a living, and they hope to find a way to do that,” he said.

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