1 Market versus formula - derived prices for SEW pigs
نویسنده
چکیده
A formula for deriving the price of SEW pigs using grain, soybean meal, and market hog prices was estimated based on return on investment being equal for all three phases of production – farrow, nursery, and finish. USDA reported SEW pig prices were compared with formula-derived prices. The level of correlation between these two series was sensitive to how grain, soybean meal, and market hog prices were chosen. Using expected prices in the formula resulted in SEW prices that were strongly correlated with reported market prices. Using hindsight cash prices in the formula resulted in SEW formula prices that were weakly correlated with reported prices. This approach may be appropriate with contractual relationships where the goal is to share profits and losses proportionately. Thus, the manner in which the formula is used (i.e., method of choosing prices) will depend on the risk attitudes of the buyer and seller as well as the nature of their business relationship.
منابع مشابه
Segregated Early Weaning (SEW) of Pasture-farrowed Pigs
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