Pork producer margins continued their downward slide last week, turning negative by showing a 60-cent-per-head loss. Packer margins remain negative, but made up significant ground last week.
Waning domestic demand, slaughter runs slightly above expectations and the continuation of heavy weights of market hogs are pressuring hog prices and producer margins. For the week ending May 4, farrow-to-finish producers saw a 60-cent loss per head, down from the previous week’s $8.82-per-head profit. Profit margins for the same week in 2011 averaged $20.60 per head. Meanwhile, total costs for the week came in nearly $3 below that of a year ago, according to the Sterling Pork Profit Tracker.
Packer margins recovered significantly for the week ending May 4, with a per-head loss of $3.10 versus the previous week, which averaged a loss of $12.04 per head. For the same week in 2011, packer margins tallied a modest profit at 10 cents per head.
Western Corn Belt negotiated hog prices dropped to $79.32 per hundredweight for the week, $3.12 less than the week before and $11.14 per hundredweight below prices for the same week in 2011. Pork cutout values were $78.22 versus $90.46 for the week in 2011, 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 May 4:
• Average farrow-to-finish margins: -$0.60 per head
• Average pork packer margins: -$3.10 per head
Cattle feeding margins continue to report significant losses. For the week ending May 5, the Sterling Beef Tracker reports margins at a negative $101.95 per head, compared with $107.33 last week and breakeven for the same week in 2011.
Beef packer margins continued to improve, reporting a $27.27 per-head profit by the close of May 5. Packers had a $6.07 per-head profit the previous week, and a $25.19 per-head loss one year ago.
Cash fed cattle prices added $1.05 per hundredweight last week, which is nearly $5 than prices for the same week in 2011.
The Sterling Beef Profit Tracker for the week ending May 4:
• Average feedyard margins: -$101.95 per head
• Average packer margins: $27.27 per head
• Sterling Profit Quotient: -300.4.
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.