Hi,

Feed cost (corn and meal) have gained roughly 20%, while February 2027 hog futures are down nearly 5%.

The two major feed ingredients are becoming considerably more expensive while the expected value of hogs is moving in the opposite direction. That is exactly the divergence producers do not want to see…. higher production costs on one side, with no corresponding improvement in revenue on the other. This is still a simplified market proxy rather than an exact feed ration or margin calculation. Actual costs will vary based on the ration, basis, currency, freight and other inputs. Nevertheless, the direction is unmistakable, and the gap has widened sharply since August.

Hogs are becoming more expensive to feed, but the market is not willing to pay more for them.

Feed mills and producers are already feeling the pressure

Simon Briere | Stratège Principal

Office: +1 514-218-6888
R.J. O'Brien & Associates Canada Inc | sbriere@rjobrien.com
1250 Boul René Lévesque Ouest | Bureau 4120 | Montréal | Québec H3B 4W8
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