Pork producer profit margins nearly doubled in a week to $14.63 per head, while packers gave back more than $7 per head following a short recovery period.
For farrow-to-finish producers, the average margin reported as of the week ending May 25 was $14.63 per head, compared to $7.49 the week before, according to Sterling Marketing, Vale, Ore. For that same week in 2011, producer margins averaged $18.88 per head.
Hog slaughter lightened up a bit even though it continued to exceed year-ago levels by 1.2 percent. That’s a far cry from the previous run of several weeks with hog slaughter surpassing 2011 levels by more than 5 percent. Market weights also beat the trend, averaging 206.7 pounds versus 208 pounds the week before.
Feed costs for the week ahead of the Memorial Day weekend averaged $109.88, down $3.35 from the week before and $8.25 less than in 2011.
Packer margins gave back they’re recent recovery trend and more, averaging a per-head loss of $12.55 for the week ending May 25 versus a $5.05 loss the week before and a $0.97 profit for the same week in 2011. Packer margins will need to improve in order to sustain a higher hog-price trend.
Western Corn Belt negotiated hog prices improved on lighter hog runs, reported at $85.13 per hundredweight for the week of May 25. That compares to $84.27 for the previous week and $90.89 last year. Pork cutout values turned down, at $79.22 versus $84.27 a week earlier.
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 May 25:
• Average farrow-to-finish margins: $14.63 per head
• Average pork packer margins: -$12.55 per head
Cattle feeding margins gave back $46.99 per head from the previous week, the Sterling Beef Tracker reports. Feeder margins for the week ending May 26 averaged a loss of $64.39 per head, compared with $17.40 the week before, and $43.82 for the same week a year ago.
Meanwhile, beef packer margins continued to improve, reporting a $9.41-per-head profit by the close of the week, versus $5.47 the week before. That compares to a per head profit of $80.96 for the same week last year.
Cash fed cattle prices slipped just more than $2 to $120.45 per head. The week before prices averaged $122.72 per head and one year ago they were $104.04.
The Sterling Beef Profit Tracker for the week ending May 26:
• Average feedyard margins: -$64.39 per head
• Average packer margins: $9.41 per head
• Sterling Profit Quotient: -191.7
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.