Pork producer margins move higher, packers slip

Pork producer margins continued their upward trend having gained $3.44 per head on the week ending April 20. Packer margins, having shown improvement the previous week, fell $2.58 per head and continue to run in the red.  

Profit margins for farrow-to-finish producers closed the week of April 20 at $14.29 per head, which compares with $10.85 per head the week before. For the same week in 2011, producers were looking at profits averaging $33.42 per head, according to the Sterling Pork Profit Tracker. Overall, costs ran nearly $10 lower than one year ago.

In recent weeks, packer margins had recovered some ground, although still running at a loss. For the week ending April 13, margins reported a loss of $9.09 per head; by the close on April 20, packer margins were down $11.67 per head. That compares with a $2.13 per head profit for the same week in 2011.

Western Corn Belt negotiated hog prices last week held nearly steady from the week before at $82.43 per. In 2011, hog prices were nearly $12 higher at $94.28 per hundredweight, according to Sterling Marketing, Vale, Ore.

Sterling Marketing provides the Sterling Pork and Beef Profit Trackers, which are calculated using actual weekly prices for hogs and cattle, feed costs, pork and beef cutout prices, drop credits and other factors that influence profit margins.

The Sterling Pork Profit Tracker for the week ending April 20:

• Average farrow-to-finish margins: $14.29 per head
• Average pork packer margins: -$11.67 per head

Cattle feeding margins continue to suffer under demand challenges. The Sterling Beef Tracker reports margins for the week ending April 20, falling another $11.45 per head, with losses at $90.07 per head versus $78.62 the week before. For the same period in 2011, feeder profits were $240.65 per head.  

Packer margins recovered significantly by the close of last week, but still reported a loss of $45.74 per head. The previous week, margins were running at a $106.57 per-head loss. For the week comparable to April 20 in 2011, packers were losing $1.78 per head.

Cash fed cattle prices held nearly steady at $121.15 hundredweight last week, versus $121.47 the week before. A year ago, cattle feeders sold cash cattle for $119 per hundredweight.

The Sterling Beef Profit Tracker for the week ending April 20:

• Average feedyard margins: -$90.07 per head
• Average packer margins: -$45.74 per head
• Sterling Profit Quotient: -283.4.

The Sterling Pork and Beef Profit Trackers are produced by Sterling Marketing Inc. and John Nalivka, president, Vale, Ore., and are published weekly by Pork Network.



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