Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
“Opening the Throttle and Applying the
Brakes: The Disconnected Policy to Support
(Stifle) the Canadian Pork Sector”: a Re...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 2 victor.aideyan@hisgraiincommodities.com
Table...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 3 victor.aideyan@hisgraiincommodities.com
Intro...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 4 victor.aideyan@hisgraiincommodities.com
Concl...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 5 victor.aideyan@hisgraiincommodities.com
http:...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 6 victor.aideyan@hisgraiincommodities.com
Note:...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 7 victor.aideyan@hisgraiincommodities.com
Concl...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 8 victor.aideyan@hisgraiincommodities.com
Furth...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 9 victor.aideyan@hisgraiincommodities.com
hog i...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 10 victor.aideyan@hisgraiincommodities.com
Appe...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 11 victor.aideyan@hisgraiincommodities.com
Appe...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 12 victor.aideyan@hisgraiincommodities.com
Appe...
Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities
P a g e | 13 victor.aideyan@hisgraiincommodities.com
Appe...
Upcoming SlideShare
Loading in …5
×

0

Share

Download to read offline

George_Morris_Review_Open_Throttle_November-2009_MASTER

Download to read offline

Related Audiobooks

Free with a 30 day trial from Scribd

See all
  • Be the first to like this

George_Morris_Review_Open_Throttle_November-2009_MASTER

  1. 1. “Opening the Throttle and Applying the Brakes: The Disconnected Policy to Support (Stifle) the Canadian Pork Sector”: a Review for Internal Discussion Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities Inc. November 2009
  2. 2. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 2 victor.aideyan@hisgraiincommodities.com Table of Contents Introduction.......................................................................................................................................... 3 Conclusion “1” Response..................................................................................................................... 4 Historical and Current COP Estimates for the Ontario Hog Sector.................................................... 4 Conclusion “2” Response..................................................................................................................... 7 Conclusion “3” Response..................................................................................................................... 8 Summary ............................................................................................................................................. 8 Appendix.......................................................................................................................................... 10
  3. 3. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 3 victor.aideyan@hisgraiincommodities.com Introduction In August 2009 Senior Research Associate Al Mussel, and Research Fellow Ted Bilyea of the George Morris Centre (GMC) authored a paper titled “Opening the Throttle and Applying the Brakes: The Disconnected Policy to Support (Stifle) the Canadian Pork Sector”. This is a review of that paper. As in previous reviews, I will assess the validity of business impact statements and conclusions reached by that GMC report. Major conclusions extracted from paper titled “Opening the Throttle and Applying the Brakes: The Disconnected Policy to Support (Stifle) the Canadian Pork Sector” by Al Mussell and Ted Bilyea – August 2009. 1. That the Canadian red meat sector in general and the pork sector in particular continue to suffer a prolonged period of financial losses. Furthermore, Mussel and Bilyea directly and indirectly indicate that such pork industry losses are due to ethanol production IN CANADA 2. That Canada’s “natural” comparative advantage is being structurally eroded by policy backing ethanol production. 3. That the Canadian pork segment is in a particularly difficult situation and that the prospects for immediate improvement are dim due to factors such as U.S. Country of Origin Labelling, a glut of pork in world markets, and a structurally stronger Canadian currency which reduces revenue. Mussel and Bilyea then go ahead and endorse the Canadian Pork Industry Recovery Plan In this paper I will address these conclusions one at a time, highlighting areas of agreement and difference. Furthermore, I will offer some observations on the viability, contributions and policy considerations concerning the hog industry in Canada and Ontario.
  4. 4. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 4 victor.aideyan@hisgraiincommodities.com Conclusion “1” Response The Canadian swine industry is indeed facing a prolonged period of financial losses. In the past year, Statistics Canada (Stats Can) Quarterly Hogs and Pigs reports have indicated a continued trend of contraction in the Canadian swine herd, and in the number of hog operations in Canada. In their October 2009 Hog Statistics report, Stats Can clearly states that as at the third quarter of 2009, Canadian hog inventories declined by about 7% compared to the same time year prior. In that quarterly report, Stats Can attributed the contraction in hog inventories mainly to low market prices, the restructuring of farms and to farm closures. We agree that it is reasonable to conclude that a profitable industry, not subject to expansion barriers, would be stable or growing and not shrinking as evidenced in the Canadian swine industry. In “Opening the Throttle and Applying the Brakes: The Disconnected Policy to Support (Stifle) the Canadian Pork Sector” the GMC authors state that “Canadian hog producers have been suffering losses said to be in the range of $40/hog”. Table 1 below is a reproduction of Al Mussell and Ted Bilyea’s own Annual Cost and Returns table for the Saskatchewan Hog Industry as illustrated in “Opening the Throttle”. Based on these GMC estimates, average losses in the hog industry since 2007 is closer to $26/hog. Table1: George Morris Centre Saskatchewan Hog Production Costs and Returns Table, August 2009 Market Hog Revenue/ Hog Feed Cost/ Hog Variable Cost/ Hog Contribution Margin Total Cost/ Hog Net Profit/ Hog 2000 $158.70 $55.57 $106.76 $51.94 $126.03 $32.67 2001 $163.47 $62.96 $114.20 $49.27 $133.48 $29.99 2002 $126.39 $72.32 $121.04 $5.35 $140.32 ($13.93) 2003 $126.14 $68.70 $117.49 $8.65 $136.77 ($10.63) 2004 $154.51 $64.69 $114.93 $39.58 $134.21 $20.30 2005 $139.57 $53.08 $102.39 $37.18 $121.66 $17.91 2006 $126.30 $54.56 $103.44 $22.86 $122.72 $3.58 2007 $121.93 $71.68 $120.67 $1.26 $139.95 ($18.02) 2008 $124.66 $93.95 $143.00 ($18.34) $162.28 ($37.62) 2009 $135.41 $88.84 $137.86 ($2.45) $157.14 ($21.73) Source: George Morris Centre Hog Costs and Returns Model GMC’s estimates show a profitable hog industry from 2004 to 2006 and losses beginning in 2007. Historical and Current COP Estimates for the Ontario Hog Sector The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) have some excellent Cost of Production estimates for Ontario hog production available at:
  5. 5. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 5 victor.aideyan@hisgraiincommodities.com http://www.omafra.gov.on.ca/english/livestock/swine/finmark.html Budget summaries for 2002 through 2009 are available as well as recent hog COP estimates for October 2009. Below are OMAFRA’s annual budget estimates for 2002-20091 Table 2: OMAFRA Farrow to Finish Swine Enterprise Budget Estimates for 2002-2009 Summary 2002 2003 2004 2005 2006 2007 2008 2009 Market HogValue $137.03 $137.17 $164.12 $149.34 $131.93 $127.08 $128.15 $124.36 FeedCost $84.93 $87.41 $86.55 $70.03 $70.91 $85.50 $104.00 $103.51 OtherVariable Costs $37.56 $37.57 $35.12 $37.47 $37.92 $42.21 $42.41 $40.35 FixedCosts $24.66 $26.42 $23.69 $27.40 $25.20 $24.88 $21.06 $20.85 Total Cost perHog $147.15 $151.40 $145.36 $134.90 $134.03 $152.59 $167.47 $164.71 Net Return ($10.13) ($14.23) $18.76 $14.44 ($2.10) ($25.51) ($39.32) ($40.35) $per pig $52.10 $49.76 $77.57 $79.31 $61.02 $41.58 $24.15 $20.85 Variable Costs $125.95 $127.80 $124.22 $108.23 $108.74 $126.64 $144.59 $141.76 Total Costs $151.31 $154.82 $148.41 $135.82 $133.91 $151.32 $165.38 $162.31 **** 100Indexmarket hogcalculated usingthe average monthlydressed weight and index CalculatedReturnOverFeedCosts(market HogValue lessFeedCosts) CalculatedBreakevenPrices($/ckg, 100index) tocover Source: OMAFRA Farrow to Finish Swine Enterprise Budget estimates for 2002-2009 OMAFRA’s Ontario variable cost estimates are well developed and do not differ markedly from GMC’s Saskatchewan based estimates or our estimates for 20092 . Our variable cost estimates for third quarter (to date) 2009 are further expanded to show estimates of hog finisher feed cost using a basic corn soybean meal based ration3 . Hog feed rations vary considerably swinging from “traditional” added fat diets to no-fat diets and diets including varying levels of DDGs and alternative energy sources (wheat, wheat shorts etc). The grower diet in appendix 4 is a relatively corn rich grower level hog diet and is therefore more influenced by the cost of corn. Appendix 2 below shows fourth quarter Ontario hog COP estimates when grower feed costs are adjusted with the cost of corn in the feed ration reduced to zero. In such a scenario the breakeven price for finished hogs is about $1.19/kg (100 Index, 90 kg carcass, grading at 108 of Index). When only variable costs are considered, the breakeven hog price falls to $1.09/kg, 100 Index. Our analysis leads us to the conclusion that as Ontario hog prices drop below $1.09/kg, with other costs held steady at current levels, even reducing corn input prices to zero would still have the Ontario hog industry suffering negative contribution margins. Similarly, hog prices below $1.19/kg are unprofitable (using TOTAL cost estimates) even with zero cost corn4 . 1 2009 estimates are for the year from January through October 2 See the Ontario COP estimates for hogs going to market in October-November 2009 in Appendix 1 below 3 See Appendix 4 below 4 Prices are 100 Index, 90 kg carcass grading at 108 of index
  6. 6. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 6 victor.aideyan@hisgraiincommodities.com Note: For maximum cost containment and profitability in the livestock industry, “cheap” corn is certainly very desirable. However, “cheap” corn alone is not enough to achieve profitability; there are other cost and profit drivers that can, singly or in combination, eliminate profitability no matter how “cheap” corn becomes e.g. Soybean meal cost, fixed costs such as infrastructure costs, labour etc and most importantly the selling price for livestock. We cannot therefore accept the conclusion reached by Al Mussell and Ted Bilyea that high corn costs (via stronger local Basis) driven by demand from the Canadian ethanol industry is responsible for the financial losses currently being suffered by the hog industry. It is important to note that the Canadian and U.S. hog industries have suffered periods of extended financial losses before: 2002-2003; fall 1998 to mid 1999 were just such periods. We should note that there was no significant ethanol industry in Canada during the 1998-1999 period. Even the U.S. ethanol industry was less than one fifth the size it is today in 1999. The 1998-1999 financial losses suffered by the hog industries in Canada and the U.S. were in fact caused by extraordinarily low hog prices, similar to those we are once again experiencing. In its own analysis in the October 2009 hogs report Stats Canada states clearly that “the main factors in the decline (in the hog industry’s inventory) were low market prices ... and farm closures” words in italics are mine. Our conclusion: Ontario hog industry losses are being driven primarily by low hog prices. A sharp weakening in Ontario corn Basis would probably reduce the level of losses in the industry for a while but sustained profitability for the Ontario hog industry can only be achieved through • Reduction of the overall cost structure of the Ontario hog industry to improve competitiveness. Here we refer to non-feed input costs • And yes, improved hog prices We can appreciate how some observers reach the conclusion that the competitiveness and profitability of the Ontario hog industry would be improved by reducing ethanol based competition for corn within Ontario. The logic is that reduced local demand for corn leads to a weaker Basis and therefore relatively cheaper corn in Ontario. There is a significant problem with this line of thought: potential expansion of the nearby U.S. ethanol industry. If Ontario corn Basis weakens and local corn prices fall relative to nearby U.S. states in an environment where U.S. ethanol plants are highly profitable (the current situation) we should expect the development of further U.S. ethanol plants close to Ontario’s borders and increased export of Ontario corn to such plants. In effect, Canadian ethanol industry jobs become U.S. ethanol industry jobs. Ethanol producers’ margins and the incentive for expansion are after all largely driven by energy prices (crude oil and gasoline). As long as such energy prices are high enough, the U.S. corn ethanol industry will be able to compete for corn supplies at home and from nearby Canadian provinces. Furthermore, within the current NAFTA and free trade framework, there is very little that Canadian government policy can do to stop the flow of corn out of Ontario, or to stop U.S. ethanol production from replacing any drop in Canadian ethanol production. Bottom line: “cheaper” Ontario corn would, at best, provide a temporary reduction in the pace of losses in the hog industry and would eventually encourage the development of nearby U.S. ethanol plants and corn exports to such plants from Ontario.
  7. 7. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 7 victor.aideyan@hisgraiincommodities.com Conclusion “2” Response Al Mussell and Ted Bilyea suggest Canada’s “natural” comparative advantage in pork production is being structurally eroded by Canadian policy backing Canadian ethanol production. Once again the implication is that Canadian ethanol production has led to higher local prices for corn through the mechanism of stronger local corn Basis, and that this stronger Basis is the cause of losses in the Canadian hog industry. The evidence over the past four years does not support this view. Chart 1 below shows the actual annual Chatham track5 average corn Basis between 2000 and 20086 . Since 2002 annualized Chatham track average corn BASIS has weakened i.e. has moved in a direction to the advantage of corn users (indicating a move towards an export BASIS). Chart 1: Chatham Ontario Average BASIS: Annual Simple Averages Source: Ontario Corn Producers Association data series. And yet actual Ontario corn prices are indeed higher in 2009 compared to 2002. Higher Ontario corn prices since 2005 have been driven almost exclusively by higher Chicago Board of Trade (CBOT) corn prices. Internationally set CBOT corn prices can only minimally (if at all) be influenced by Canadian ethanol policy or indeed by Canadian ethanol production at its present size. The Conclusion: Ontario corn prices are a function of the CBOT corn futures price plus Ontario Basis. Between 2005 and 2008 Ontario Basis has been trending lower (moving to an export Basis). Higher corn prices in Ontario during the 2005-2009 period are therefore not due to a stronger local Basis (or for that matter the Ontario ethanol industry) but rather have been due to higher CBOT commodity price. 5 Chatham is a major benchmark for corn BASIS in Ontario and is a good benchmark for corn BASIS trend in the province 6 Each “year” runs from October through September of the following calendar year e.g. the “year” 2000 runs from October 2000 through September 2001. Year 2008 is from October 2008 through September 2009
  8. 8. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 8 victor.aideyan@hisgraiincommodities.com Furthermore, from our analysis in “1” above I conclude that any erosion of Canada’s comparative advantage in pork production (compared to the U.S.) is due to the current higher overall cost structure for the Canadian hog industry compared to the U.S. industry. Conclusion “3” Response I agree that the Canadian pork segment is indeed in a particularly difficult situation. Persistent losses over the past 2-3 years has seriously eroded equity in the industry, has led to significant contraction in the sector7 , and has caused untold hardships among family run hog businesses. Mussel and Bilyea indicate that any chance of a quick return to profitability by the Canadian hog production industry is hindered by factors such as: • U.S. Country of Origin Labelling • A glut of pork in world markets • The impact of a stronger Canadian dollar exchange rate (vs. the US$) on hog prices These are indeed impediments to a quick return to profitability for the Canadian industry. Unfortunately, these are also factors that are outside the control of both the industry itself and policy makers in Ottawa. The industry is therefore faced with limiting factors beyond its control. I agree with Mussel and Bilyea and endorse the pork industries request for support through the Canadian Pork Industry Recovery Plan. I go even further and argue that the pork and beef production sectors are a critical part of the Canadian animal protein industry which is of strategic importance to the continued well being and prosperity of Canadian citizens. The industry, in our opinion, is a critical industry and a valid candidate for more public sector assistance as it restructures to weather the current challenges and position for renewed and sustained profitability. Summary From about 2006, the Ontario hog industry has had an extended period of losses due to factors beyond its control. This situation has caused contraction of production and considerable hardship in the industry. An examination of the cost and revenue sides of the business since 2005 leads inexorably to the conclusion that low sales prices caused by a stronger C$ to US$ exchange rate is the primary reason for the industry’s financial losses8 . Average Ontario corn prices between 2006- 2009 (year to date) have indeed been higher than the average price during the preceding four year period (2002-2005) but that increase is not due to stronger average Ontario corn Basis and therefore cannot be blamed on increases in local demand from industrial users. Increases in Ontario corn prices during the period have been primarily due to increases in the CBOT component of Ontario corn price. We agree with Mussel and Bilyea’s conclusion that the Ontario hog industry should receive public sector assistance as it restructures to weather the current challenges. It is evident, that the Ontario 7 Stats Can October 2009 Hog Statistics report indicates a 7% reduction in hog inventories compared to same time year prior and a drop in the number of Canadian hog farm operation from 8,500 to 7,700 8 Appendix 3 below is a matrix illustrating the impact of a sliding C$ to US$ exchange rate on various U.S. hog index prices. One of the takeaways is that at a par exchange rate and current hog COP, the U.S. hog price required to cover variable costs is more than US$78/cwt carcass.
  9. 9. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 9 victor.aideyan@hisgraiincommodities.com hog industry is facing a period when adjustments in the costs structure of the industry are needed to reposition the industry for sustainable profitability. Analysis of the changes in the comparative cost structures of the U.S. and Ontario hog industry and development of a strategy for improving the Ontario hog industry’s cost competitiveness is outside the scope of this current report but certainly needs to be examined by stakeholders in the industry.
  10. 10. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 10 victor.aideyan@hisgraiincommodities.com Appendix Appendix 1 Estimated Cost of Production and Profitability for Hogs going to Market in November, 2009 Finbyte$ - Finishing Enterprise Budget Based on Cash Income $/ckg1 3059 Market Pigs @ 104 per ckg, 108 index, 90 kg………………………… 104.00$ Other Income - ……………………………..………….……………………… - Total Cash Income…………………………………...………… 104.00$ Variable Cash Expenses $/ckg 793.7 tonnes of Grower-Finisher Feed @$261.951555772994 per tonne… 69.92$ 3154 Feeder Pigs @ $2.2 per kg @ 24.5 kg with a 3% Death Loss…….. 57.17 Health (Vet & Medicine)…………………...……………..…………………… 2.57 Marketing & Trucking (In and Out)…………………………………………… 3.09 Barn Supplies………………………………..……………….………………… 0.40 Custom Work (ie. Manure Handling)………...………………………………… 1.21 Labour (Wages, Benefits, Salaries)………………..………………………… 4.04 Building & Equipment Repair………………………………….…..…………. 0.94 Fuel (Vehicle)……………………………………….………………...………… 0.20 Telephone………………………………..………………...…………………… 0.20 Utilities (Hydro & Gas)…………………….……..……………………………… 1.13 Vehicle (Repairs, Licence, etc.)……………..…………...…………………… 0.67 Acounting/Legal/Office……………………..………………..………………… 0.34 Other (Miscellaneous)……………………..………………...………………… 0.20 Operating Loan Interest @ 7.25%……………………………………………… 2.68 Total Variable Cash Expenses……………………………… 144.77$ Fixed Cash Expenses $/ckg Term Loan Principal Payments……………….……...…………………. 4.15$ Term Loan Interest Payments…………………………..…………………… 7.63 Insurance (Buildings, Equipment, Livestock, Liability)………………..…… 0.50 Property Taxes………………………….……………………………...……… 0.27 Leases (Buildings, Equipment or Land)……………………………..……… - Total Fixed Cash Expenses……………………………..…… 12.55$ Total Variable & Fixed Cash Expenses……………..……… 157.33$ Net Cash Return Before Taxes……………………………… (53.33)$ Breakeven Cash Price ($/ckg @ 100 Index)……………… 157.33$ Finbyte$ is an OMAFRA Hog Finish Enterprise Budgetary Tool
  11. 11. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 11 victor.aideyan@hisgraiincommodities.com Appendix 2 Estimated COP and Profitability for Hogs going to Market in November, 2009 WITH ZERO CORN COST IN GROWER RATION Finbyte$ - Finishing Enterprise Budget Based on Cash Income $/ckg1 3059 Market Pigs @ 104 per ckg, 108 index, 90 kg………………………… 104.00$ Other Income - ……………………………..………….……………………… - Total Cash Income…………………………………...………… 104.00$ Variable Cash Expenses $/ckg 793.7 tonnes of Grower-Finisher Feed @$129.5 per tonne………………. 34.57$ 3154 Feeder Pigs @ $2.2 per kg @ 24.5 kg with a 3% Death Loss…….. 57.17 Health (Vet & Medicine)…………………...……………..…………………… 2.57 Marketing & Trucking (In and Out)…………………………………………… 3.09 Barn Supplies………………………………..……………….………………… 0.40 Custom Work (ie. Manure Handling)………...………………………………… 1.21 Labour (Wages, Benefits, Salaries)………………..………………………… 4.04 Building & Equipment Repair………………………………….…..…………. 0.94 Fuel (Vehicle)……………………………………….………………...………… 0.20 Telephone………………………………..………………...…………………… 0.20 Utilities (Hydro & Gas)…………………….……..……………………………… 1.13 Vehicle (Repairs, Licence, etc.)……………..…………...…………………… 0.67 Acounting/Legal/Office……………………..………………..………………… 0.34 Other (Miscellaneous)……………………..………………...………………… 0.20 Operating Loan Interest @ 7.25%……………………………………………… 1.93 Total Variable Cash Expenses……………………………… 108.67$ Fixed Cash Expenses $/ckg Term Loan Principal Payments……………….……...…………………. 4.15$ Term Loan Interest Payments…………………………..…………………… 7.63 Insurance (Buildings, Equipment, Livestock, Liability)………………..…… 0.50 Property Taxes………………………….……………………………...……… 0.27 Leases (Buildings, Equipment or Land)……………………………..……… - Total Fixed Cash Expenses……………………………..…… 12.55$ Total Variable & Fixed Cash Expenses……………..……… 121.23$ Net Cash Return Before Taxes……………………………… (17.23)$ Breakeven Cash Price ($/ckg @ 100 Index)……………… 121.23$ Finbyte$ is an OMAFRA Hog Finish Enterprise Budgetary Tool
  12. 12. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 12 victor.aideyan@hisgraiincommodities.com Appendix 3 HISGRAIIN Commodities Live and Lean Hog Contract Prices to Ontario 100 Index Matrix Live Hog equivalent (US$/cwt) CME Constructed price (US$/cwt) Exch Rate => 0.84 0.86 0.88 0.90 0.92 0.94 0.96 0.98 1.00 20 27.03 $57.39 $56.06 $54.79 $53.57 $52.40 $51.29 $50.22 $49.20 $48.21 22 29.73 $63.26 $61.78 $60.38 $59.04 $57.76 $56.53 $55.35 $54.22 $53.13 24 32.43 $69.12 $67.51 $65.98 $64.51 $63.11 $61.76 $60.48 $59.24 $58.06 26 35.14 $74.98 $73.23 $71.57 $69.98 $68.46 $67.00 $65.61 $64.27 $62.98 28 37.84 $80.84 $78.96 $77.16 $75.45 $73.81 $72.24 $70.73 $69.29 $67.90 30 40.54 $86.70 $84.68 $82.76 $80.92 $79.16 $77.48 $75.86 $74.31 $72.83 32 43.24 $92.56 $90.41 $88.35 $86.39 $84.51 $82.71 $80.99 $79.34 $77.75 34 45.95 $98.42 $96.13 $93.95 $91.86 $89.86 $87.95 $86.12 $84.36 $82.67 36 48.65 $104.28 $101.86 $99.54 $97.33 $95.21 $93.19 $91.25 $89.38 $87.60 38 51.35 $110.14 $107.58 $105.14 $102.80 $100.57 $98.43 $96.38 $94.41 $92.52 40 54.05 $116.00 $113.31 $110.73 $108.27 $105.92 $103.66 $101.50 $99.43 $97.44 42 56.76 $121.87 $119.03 $116.33 $113.74 $111.27 $108.90 $106.63 $104.46 $102.37 44 59.46 $127.73 $124.76 $121.92 $119.21 $116.62 $114.14 $111.76 $109.48 $107.29 46 62.16 $133.59 $130.48 $127.51 $124.68 $121.97 $119.38 $116.89 $114.50 $112.21 48 64.86 $139.45 $136.20 $133.11 $130.15 $127.32 $124.61 $122.02 $119.53 $117.14 50 67.57 $145.31 $141.93 $138.70 $135.62 $132.67 $129.85 $127.15 $124.55 $122.06 52 70.27 $151.17 $147.65 $144.30 $141.09 $138.02 $135.09 $132.27 $129.57 $126.98 54 72.97 $157.03 $153.38 $149.89 $146.56 $143.38 $140.33 $137.40 $134.60 $131.91 56 75.68 $162.89 $159.10 $155.49 $152.03 $148.73 $145.56 $142.53 $139.62 $136.83 58 78.38 $168.75 $164.83 $161.08 $157.50 $154.08 $150.80 $147.66 $144.65 $141.75 60 81.08 $174.61 $170.55 $166.68 $162.97 $159.43 $156.04 $152.79 $149.67 $146.68 62 83.78 $180.47 $176.28 $172.27 $168.44 $164.78 $161.27 $157.92 $154.69 $151.60 64 86.49 $186.34 $182.00 $177.87 $173.91 $170.13 $166.51 $163.04 $159.72 $156.52 Ontario Equivalent in CDN$ per 100Kg Current Ontario Pool Formula used: (CME Constructed Price – $0.56/cwt) x 0.74 x 2.2046 x C$ to US$ Exchange Rate / 0.80 / 1.1195 = Ontario 100 Index hog price
  13. 13. Author: Victor Aideyan, Senior Consultant, HISGRAIIN Commodities P a g e | 13 victor.aideyan@hisgraiincommodities.com Appendix 4 Finbyte$ - Finishing Enterprise Budget - Feeding Program Assumptions Input $/tonne 1 2 3 4 5 Corn $165.00 749 780 Soybean Meal $420.00 220 190 Premix 1 $990.00 31 Premix 5 $990.00 30 Other $0.00 Other $0.00 Other $0.00 Other $0.00 Mixing $20.00 Totalkg 1,000 0 0 0 1,000 $/tonne $266.68 $0.00 $0.00 $0.00 $258.20 Performance 1 2 3 4 5 Overall Start Wt (kg) 24.5 68 68 68 68 24.5 End Wt (kg) 68 68 68 68 112.5 112.5 Feed Conversion 2.60 0.00 0.00 0.00 3.20 2.90 Days on Feed 57 0 0 0 49 106 Average Daily Gain 763 0 0 0 908 830 Kg of Feed 113 0 0 0 142 256 $/tonne $266.68 $0.00 $0.00 $0.00 $258.20 $261.95 $/pig $30.16 $0.00 $0.00 $0.00 $36.77 $66.93 November 17, 2009 Feed Rations - Kg per Tonne Finbyte$ is an OMAFRA Hog Finish Enterprise Budgetary Tool

Views

Total views

151

On Slideshare

0

From embeds

0

Number of embeds

7

Actions

Downloads

2

Shares

0

Comments

0

Likes

0

×