HOG MARGIN SHEET

Our hog margin sheet was developed for the investor type hog owner. We isolate the three biggest inputs for the producer, corn, soybean meal , and DDGS. The model calculates a crush margin using current market numbers over a 12 month period time. By doing this we are able to look out well into the coming year and see our margin opportunities, letting market volatility work for us. We account for basis in hogs, corn and soybean meal. The hog basis used is formed from past history while corn basis represents our bias on the upcoming year. Along with corn, soybean meal, and DDGs we factor in a $108 all other expense cost. This includes a $43 Isowean, $21 for Yardage, and $25 other feed cost. Our model is made to show a hog producer the current hog crush at any time using current markets. To objectively account for the seasonal trends of the hog market we have targeted margins for each delivery month for the next 12 months. Corn basis is reflective of the WCB. Annual Targeted Margin is $15 per pig.