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Research: Prospects for swine feed costs in 2024

Indiana corn prices during the first three quarters of this year averaged $6.31 per bushel, with a September average of $5.36 per bushel.  Since September prices have dropped sharply.  The most recent WASDE report indicates that corn prices could remain low for the foreseeable future.  Using the farmdoc Price Distribution Tool in late November, corn prices for the July 2024 futures contract at the 25^th percentile, the 50^th percentile, and the 75^th percentile were $4.41, $4.89, and $5.42, respectively.  The $4.41 price ($5.42 price) indicates that there is a 25 percent chance that the corn price will be below $4.41 (above $5.42) per bushel at the expiration of the July contract.  Obviously, lower expected corn prices will translate into lower expected feed costs during the first part of next year.  This article examines trends in feed costs as well as the impact of corn and soybean meal prices on feed costs for farrow-to-finish and swine finishing operations.

It is important to note that the swine finishing enterprise represented in this article assumes the finishing of an early-weaned pig.  The rations for the farrow-to-finish and swine finishing enterprises consist of corn, soybean meal, dry distillers’ grain, and supplements.  Corn prices represent averages for Indiana as reported by USDA-NASS.  Soybean meal and distillers’ grain prices are obtained from Feed Outlook, published monthly by USDA-ERS.  Information from Agricultural Prices, a monthly USDA-NASS publication, was used to compute supplement prices.  Late November futures prices for corn and soybean meal were used to project feed indices for 2024.  Feed cost indices are reported on a closeout month rather than a placement month basis.

Corn and Soybean Meal Prices

Figures 1 and 2 report monthly corn and soybean meal prices from January 2007 to September 2023.  Corn price averaged $4.75 per bushel from 2007 to the current month.  Soybean meal price averaged $363 per ton from 2007 to the current month.  Current corn price is below the long-run average, but current soybean meal prices are above the long-run average.  Futures prices suggest that corn prices are likely to remain below their long-run average well into next year.  Soybean meal prices, on the other hand, are likely to remain above their long-run average.  The impact of these corn and soybean meal projections on feed costs are discussed. | READ MORE