Pork producer margins decline, packer profits improve

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Pork producer margins declined $4.91 per head last week, with margins now a positive $12.68 per hog marketed, according to the Sterling Pork Profit Tracker. Negotiated cash hog prices declined $1.91 per hundredweight last week to $99.17. Pork packer margins improved $8.61 per head for the week, leaving losses at $1.75 per head.

Closeouts were a little easier for cattle feedyard managers to digest last week, but it wasn’t due to higher cattle prices. The improvement to cattle feeding margins was attributable to lower costs – primarily grain costs. Cattle feeding margins improved $23 per head for the week. Still, feedyards lost an average of $124 per head on cattle marketed last week, according to the Sterling Beef Profit Tracker.

Beef packer margins have been declining for several weeks. Last week packing margins declined $9 per head leaving margins at about $15, according to estimates by Sterling Marketing, Vale, Ore.

A year ago cattle feeders sold cash cattle at $118 per hundredweight, resulting in losses of $220 per head. Last year cash hogs fetched $93.50 per hundredweight, resulting in profits of $23 per head.

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

The Sterling Beef Profit Tracker for the week ending August 3:

  • Average feedyard margins: -$124.83 per head.
  • Average packer margins: $14.96 per head.

The Sterling Pork Profit Tracker for the week ending August 2:

  • Average farrow-to-finish margins: $12.68 per head.
  • Average pork packer margins: -$1.75 per head.

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



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