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PRICE CALCULATION

Understanding the New Mandatory Price Reporting System


Average Price:
The average value of the middle 90% of hogs delivered to each plant.

Low Price: The average value of the bottom 5% of hogs from each plant.

High Price: The average value of the top 5% of hogs from each plant.

Each of these prices exclude organic hogs and futures based hogs. Price are reported as $/ckg Total Value DW F.O.B. Yard.  (Dollars per hundred kilograms Dressed Weight Total Value Freight on Board Yard)

These prices differ from traditional 100 index base prices such as the 100% formula price or the Pool and Pool Plus prices. The total value prices include all index premiums and other premiums (such as delivery, loin depth, feeding program etc.)

For Example:

(1) A 95kg hog with a $125/ckg base price, a 110 index, and no other premiums would be reported as $137.50/ckg DW Total Value. (125 * 1.10 = 137.50)

(2) A 95kg hog with a $125/ckg base price, a 110 index, and a $2/hog Sunday night premium would be reported as $139.60/ckg DW Total Vale. (((125 * 1.10 * .95)+$2)/.95))


Total Volume of Ontario Hogs Sold:
The total number of hogs sold by Ontario producers, this includes all hogs including hogs sold in province and out of province. Organic and futures based hogs are included in the total.

Volume of Hogs Included in Price Calculations: The total number of hogs included in price calculations. Organic and futures based hogs are excluded from this number. Direct sale hogs to the US and non reported hogs may also be excluded from this total.


Price Update for the preceding week, the week of: Nov 28, 2010 

Description

Value

Average price /ckg DW total value

$140.08

Low price /ckg DW total value

$114.12

High price/ ckg DW total value

$151.35

Total volume of Ontario hogs sold was

88,005

Weekly average weight of Ontario hogs was (/ kg DW)

95.46

Weekly average fat measurement of Ontario hogs (mm)

19.09

Weekly average muscle measurement of Ontario hogs (mm)

62.71


Revised Data
On January 19, 2011, Ontario Pork revised mandatory price reports to reflect a change in methodology of categorizing hogs included in the average, low, and high prices. The original method categorized hogs based on animal value ($/head) and then calculated the value of each category of animals and reported the prices in dollars per hundred kilograms dressed weight total value ($/ckg DW Total Value). The new method categorizes animals based on the $/ckg DW Total Value price before calculating average values. The new logic is internally consistent, and revising the data to the start of the data series will allow producers to compare prices from week to week.   

 

 

 

 

 

 

Go to Price Reporting 

Price Calculation Information

In 2003, Ontario Pork began using the National Daily Direct Hog Prior Day Report - Slaughtered Swine (201) price report in its formula calculations.
Both Ontario Pork and Ontario processors use the National Daily Direct Hog Prior Day Report - Slaughtered Swine price minus 56 cents US for price calucation purposes.    

Base Price calculations using the National Daily Direct Hog Prior Day Report - Slaughtered Swine



CME Constructed Price = (Producer Sold Negotiated Hogs (Head Count * Average Net Price * Average Carcass Weight) + Producer Sold Swine or Pork Market Formula hogs (Head Count * Average Net Price * Average Carcass Weight)) divided by (Producer Sold Negotiated Hogs (Head Count * Average Carcass Weight) + Producer Sold Swine or Pork Market Formula hogs (Head Count * Average Carcass Weight))

For example, on May 5, 2003:

 CME Constructed Price= (( 46,478 * 54.49 * 194.96) + ( 129,395 * 56.03 * 199.11)) / (( 46,478 * 194.96) + ( 129,395 * 199.11)) = $55.63 (US/cwt)

This will be substituted into Ontario Pork’s Standard Formula

- US $0.56/cwt

x  U.S dressing percentage 0.74
x  Metric conversion 2.2046
x  Exchange rate (Bank of Canada Noon Rate)
divided by Ontario dressing percentage 0.80
divided by 1.1195 divisor

= 100% Ontario Base Formula Price 100 Index

EXAMPLE: If 201 Constructed = $55.63/cwt and Exchange Rate = 1.4223, then

(55.63 – 0.56) X 0.74 X 2.2046 X 1.4223 / 0.80 / 1.1195 = $142.68 per ckg 100 index

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