MSU Extension Pork

Setting a price for direct-market pork can be more complicated than it first appears. Producers need to account for the cost of purchasing or raising the pig, feed, labor, facilities, transportation, processing, and other expenses. They also need to decide how much profit is necessary to make the enterprise worthwhile.

The new MSU Extension Direct-Market Pork Pricing Calculator helps producers organize these costs and confidently determine a price that works for both their farm and their customers.

It can be tempting to set prices by looking at what another producer charges or by comparing pork with grocery store prices. Those numbers can provide useful market information, but they do not tell producers what it costs to raise and market pork on their own operation. Feed prices, processing charges, labor, facilities and production practices can vary considerably from farm to farm.

The calculator walks producers through their own costs before calculating possible selling prices.

Start with the true cost of raising the pig

The Pork Pricing Calculator tab includes spaces for producers to enter common production expenses, including:

• Feeder pig or allocated weaned-pig cost
• Feed
• Bedding and utilities
• Health, medications and biosecurity
• Transportation and marketing
• Labor
• Equipment, facilities and overhead
• Other production costs
• Mortality allowance

Labor and facility costs are sometimes overlooked, especially on small farms. However, leaving them out can make an enterprise appear profitable even when the producer is not being compensated for their time or the use of their facilities.

The workbook includes a separate Production Model and Feed-Cost Planning tab. This section helps producers think through which costs and responsibilities belong to the producer under different production arrangements. It also includes a simple feed cost estimator that you can compare with the feed expense entered in the main calculator.

This section references MSU Extension Bulletin E-3506, Models for Raising Pigs for Pork, which explains the differences between contract-finishing and independent-producer models.

Understand the different pork weights

A 280-pound live pig does not produce 280 pounds of pork for the freezer. The calculator separates three commonly discussed weights:

• Live weight
• Hot carcass or hanging weight
• Packaged pork weight

Producers can enter their expected dressing percentage, packaged yield, and shrink or miscellaneous loss allowance. The spreadsheet then estimates the pounds of pork available for sale.

These estimates help with planning, but producers should replace them with actual processor weights and farm records whenever possible. Cutting instructions, trimming, bone removal, curing, and specialty processing can all affect the amount of packaged pork returned to the customer.

Account for processing expenses

Processing costs can add up quickly, particularly when a customer orders bacon, cured ham, sausage, or other specialty products. The calculator provides spaces for slaughter fees, cut-and-wrap charges, smoking and curing costs, and other processing expenses.

Producers should clearly explain whether processing is included in the quoted pork price or paid separately by the customer. A price may look very different depending on whether it represents only the producer’s charge or the customer’s estimated total cost after processing.

Compare break-even and target prices

After the producer enters production, weight, processing, and profit information, the workbook calculates several results. These include:

• Break-even and target prices based on live weight
• Break-even and target prices based on hanging weight
• Break-even and target prices based on packaged pork
• Whole- and half-hog customer totals
• Estimated customer cost after processing
• Estimated return and profit margin

Break-even means the sale replaces the costs included in the calculator. It does not necessarily compensate the producer for ownership risk or provide money for future business needs. The target price includes the producer’s selected profit goal.

Check individual-cut prices

Producers selling pork by the individual cut can use the Individual Cut Pricing and Whole-Carcass Value Check tab. This section lets users enter expected saleable pounds and prices for products such as pork chops, roasts, ham, bacon, ribs, sausage, and ground pork.

The calculator then estimates revenue from the entire carcass and compares it with the revenue needed to cover costs and meet the producer’s profit goal. This is important because premium products cannot carry the financial responsibility for the entire pig. Lower-value cuts, trim, fat, bones, and products that are difficult to sell still affect the value recovered from the carcass.

Use farm records to improve pricing decisions

The calculator is intended as a planning tool. The example numbers show how the workbook functions, but they are not recommended prices or production standards.

Producers should enter current farm and processor costs and regularly update the workbook as those costs change. Keeping records like close-out reports and feed invoices will help you stay confident in your pricing decisions over time.

Pricing direct-market pork isn't just about finding a number customers will accept. The price must also cover your costs, compensate for your work, and account for the risks involved, helping you feel prepared and secure in your pricing approach.

The MSU Extension Direct-Market Pork Pricing Calculator gives producers a practical starting point for that conversation and helps them make more informed pricing decisions.