Pork producers have been using profit projection spreadsheets and the futures markets for many years to determine the profitability of raising pigs. Over the last decade, commodity markets have become increasingly more volatile and the dollars required to bring a pig to market have increased. These two developments have created a need for increasingly accurate margin management tools that reflect real time information and have the ability to uncover margin capturing opportunities far into the future. In addition, commodity usage such as corn, soybean meal, and DDGS has become harder to predict because diet changes are happening at a faster rate to improve cost per pound of gain based on changing commodity and amino acid prices.
A new tool available to Hubbard Feeds customers that will address these issues is the “Crush” application or Crush App. The Crush App uses real time information from the Chicago Mercantile Exchange (CME) to utilize corn and soybean meal costs along with lean hog futures for up to 12 months in the future. Combining this accurate futures pricing along with the producers own production costs will give a more accurate picture of profitability. The Crush also allows its users to either use a standard feeding program or the producer’s own feeding program to more accurately project feed needs along with performance results such as ADG and FC. This allows the Crush to more accurately predict when pigs will be marketed, which of course affects the futures month used in the projection.
Jamie Pietig, nutritionist with Hubbard Feeds, was instrumental in the development of the Crush App. “Our primary job at Hubbard Feeds is to increase our customer’s profitability and competitive advantage in the market place. We do this by providing best cost feeding programs and enhancing our producers’ ability to make good business and production decisions. The biggest requests we receive from our customers is how can I reduce risk and accurately project and protect future profits”, says Pietig. “We developed the Crush App because we needed to answer these questions and provide accurate, reliable, and real-time information so producers can make marketing decisions based on sound information.” When field testing this program, producers commented to Hubbard on how impressed they were with the accuracy of feed cost and usage projections.
In addition, the testing group was amazed at how easy the program could be operated once the basic production costs and commodity basis information was entered into the program.
Results from the Crush App are easily viewed on a variety of graphs.
An example of the Return Over Costs
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The Crush app screenshot below shows average ingredient pricing along with estimated commodity usage per pig.
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The Crush app has been programed to use on smart phones so producers can easily access their account and get the latest projections from their phone.
The Crush app is just one more example of tools that Hubbard Feeds has created to help producers analyze various feeding programs and marketing options. “I have customers that will use the Smart Choices Feed Management Dashboard to determine the optimal selling weight and packer for their pigs and then use those values in the Crush app”, says Pietig. “Having these tools at our fingertips allows my customers access to more information which allows them to make better decisions regarding their farms. When margins are tight, this type of information can make the difference between profit and loss.”
“It’s all part of 'Products and Answers That Work' philosophy that we have at Hubbard,” states Pietig. “Pork producers are looking for an edge and using today’s technology is just one way to help.”