Profit tracker: Producer and packer losses continue

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Both pork producer and packer margins remain in the red for the week ending Nov. 16. But packer margins gained back $1.71 per head, while producers gave up $1.44.

Farrow-to-finish producers moved from a $23.33-per-head loss for the week ending Nov. 9, to $24.77 per head as of Nov. 16. That compares to the same week a year earlier when margins averaged a $9.58-per-head loss, according to Sterling Marketing, Vale, Ore.  

Feed costs improved marginally again on the week, reported at $126.97 for pigs placed into the finisher as of Nov. 16. One week before, feed costs averaged $130.81. For the same week in 2011, feed costs were $103.10.

 “With the sharply higher feed costs that producers have had to bear in recent months, it is imperative that consumers be able and willing to pay more for pork in the months to come if hog prices are to rise to a profitable level,” points out Ron Plain, University of Missouri agriculture economist. Over all, retail prices have moved in a sideways pattern since May 2011.

Hog slaughter last week came in at 2.366 million head, up 0.2 percent from the week before, but down 0.1 percent compared to the same week last year. So far, hog slaughter is exceeding 2011 levels by 2 percent. Average barrow and gilt market weights at 272.6 pounds (live) crept up a bit, adding 0.5 pounds from the week before, but down 1.9 pounds from a year ago.

Packers are still recording profits, but margins moved from $8.99 per head for the week ending Nov. 9, to $7.18 last week. Sterling Marketing reports that for the same period in November 2011, packers were averaging a profit of $11.87 per head.    

The Sterling Pork Profit Tracker for the week ending Nov. 16:

  • Average farrow-to-finish margins: -$24.77 per head
  • Average pork packer margins: $7.18 per head

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.

Cattle feedlot losses move higher, averaging $93.58 per head for the week ending Nov. 17, compared to $87.97 for the week before. Looking back a year ago, feedlot margins were averaging a $39.14-per-head profit.

Beef packer margins improved by nearly $5 per head, reported at $83.31 last week, which compares to $88.59 for the week before. Sterling marketing reports beef packers lost $49.01 per head for the comparable week in 2011.

The Sterling Beef Profit Tracker for the week ending Nov. 17:

  • Average feedyard margins: -$83.59 per head
  • Average packer margins: -$87.97 per head
  • Sterling Profit Quotient: -303.7

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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