Pork producer margins in the black, packer margins in the red

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Pork producer margins improved again last week, put margins into the black while pork packer margins declined.

Pork producer margins improved more than $8 per head, with margins now a positive $3.55 per hog marketed, according to the Sterling Pork Profit Tracker. Negotiated cash hog prices improved $2.97 per hundredweight last week to $91.41. Pork packer margins declined $4.49 per head for the week, resulting in losses of $14.55 per head, according to estimates developed by Sterling Marketing Inc., Vale, Ore.

Profit margins for cattle feeders and beef packers also moved in opposite directions last week, thanks to lower cash fed cattle prices and a rising wholesale beef market.

Cattle feeding margins declined $12 per head for the week, leaving per head losses at $103 per head, according to the Sterling Beef Profit Tracker. Beef packers saw their margins move onto the positive side of ledger sheet with a per head improvement of $37. Average packer profits are now $19 per head. The Sterling Beef Profit Quotient declined 28 points for the week and the industry profitability index is now negative 308.

A year ago cattle feeders sold cash cattle at $119.90 per hundredweight, resulting in losses of $61.89 per head. Last year cash hogs fetched $78.96 per hundredweight, resulting in losses of $4.02 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 Pork Profit Tracker for the week ending May 10:

  • Average farrow-to-finish margins: $3.55 per head.
  • Average pork packer margins: -$14.55 per head.

The Sterling Beef Profit Tracker for the week ending May 11:

  • Average feedyard margins: -$103.80 per head.
  • Average packer margins: $19.55 per head.
  • Sterling Profit Quotient: -308.0.

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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michael    
kansas  |  May, 14, 2013 at 04:48 PM

Perhaps it's just me, but I wonder how these determinations are made for packers. Do they just open their books to companies like Sterling and reveal all their costs/overhead? The farmer/feedlot end is pretty transparent, with selling prices and input costs being easily acquired from open, public market sources. However, packers inputs - including contract purchase prices - are not public information. I would like to see someone explain how they're determined, and how accurate these statements are. It would also be interesting to see the packers' stock price peformance graphed against these public statements of profits and losses, to see how the market and shareholders react to such "news" reporting.


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