Carcass Buying Program

 

Under normal conditions, the following rules apply:

 

1. All hogs are purchased subject to government (USDA) inspection. All trim loss and USDA condemnations (total and partial) will be considered producer losses.

2. Any hog diagnosed by the USDA with tuberculosis will be considered condemned and of no value.

3. Hogs are adjusted for lean premiums or discounts and sort discounts as per published schedules.

4. We generally prefer that Carcass Merit lots are sized at quantities of twenty (20) head or greater.

5. Indiana Packers’ computer systems have various error checking and error avoidance checks built in to determine that appropriate measurements were obtained from the probe and scale systems. For more information about these systems or other details of the Indiana Packers Carcass Merit Pricing System, please contact your plant representative.

6. In the event that IPC is unable to recover carcass data from all hogs in a lot, the following procedures will be used:

 

If carcass weight data recovery is 90% or greater, any missing data will be substituted by using the average weight of the lot. If data recovery is less than 90%, all data will be discarded and the carcass price will be converted to a live settlement price, adjusted by the lean %, sort discount, and carcass yield based on the simple average of the last five (5) lots delivered by the producer (where data was successfully recovered).

 

If probe data recover is 60% or better, any missing data will be substituted by using the simple average of the back fat and loin depth of the lot. If data recovery is less than 60%, all actual recovered data will be used and the missing data will be substituted by using the simple average of the back fat and loin depth data from the last five (5) lots delivered by the producer (where data was successfully recovered).

 

At times, a carcass may lose identity due to illegible or misread tattoos. In the event that the lot is long, the carcass closest to the average carcass weight will be deleted.

 

7. Trimmed carcasses will be paid on actual weights and will be discounted according to the published carcass weight discount schedule.

8. Fat-O-Meter readings are taken midline between the third and fourth rib.

9. Standard yield is 74.50%.

10. Payment from IPC will be made by the close of the next business day following the carcass evaluation of the hogs.

11. The weight discount schedule is provided herein.

12. Transit insurance is available.

13. IPC’s Carcass Merit System is subject to periodic review and change. However, producers will be given notice prior to any changes.

 

 

The lean adjustment to the base carcass price equals the difference between the actual % lean and the standard lean (50%), multiplied by a lean factor, taken from the following schedule, and then multiplied by the base carcass price (less sort, if applicable).

Carcasses weighing less than or equal to 165 pounds and more than or equal to 255 pounds will receive no lean premiums or discounts.

For example:

Using a hypothetical price of $60.00 per cwt

54% lean - 50% lean = 4% lean

4% lean x 1.0 = 4.0%

4.0% x $60.00 (less sort if applicable) equals $2.40 per carcass cwt. lean adjustment.