Pork producer profit margins have been volatile in recent weeks, most recently they have dropped $6.35 per head for the week ending June 1, from a profit of $14.63 per head the week before. Meanwhile, packer margins continue to run in the red, but have improved by $3.67 per head for the same week.
For farrow-to-finish producers, the average profit margin reported for the week ending June 1 was $8.28 per head, according to Sterling Marketing, Vale, Ore. That compares to a $17.51-per-head profit for the same week in 2011.
Feed costs are providing the relief. As of June 1, those prices averaged nearly $10 from 2011’s levels.
Packer margins improved on the week, but are still running at a deficit. The per-head loss was $8.88 as of June 1, down from the previous week’s loss at $12.55 per head. That compares with the same period one year ago, reporting a $4.36-per-head loss.
Western Corn Belt negotiated hog prices held steady at $85.14 per hundredweight for the week, up a penny from the week before. In 2011, the price averaged $90.80 for the equivalent week.
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 June 1:
• Average farrow-to-finish margins: $8.28 per head
• Average pork packer margins: -$8.88 per head
Cattle feeding margins dropped another $10 per head from the previous week, the Sterling Beef Tracker reports. Feeder margins for the week ending June 2 averaged a loss of $74.02 per head, compared with $64.39 the week before, and $53.42 for the same week a year ago.
Meanwhile, beef packer margins continued to gain ground impressively, by the close of the week, packers reported a $37.47-per-head profit. That compares with $9.41 per head the week before and a whopping $107.85-per-head-profit the same week in 2011.
Cash fed cattle prices essentially held steady at $120.92 per head. The week before prices averaged $120.45 per head and one year ago they were $104.
The Sterling Beef Profit Tracker for the week ending June 2:
• Average feedyard margins: -$74.02 per head
• Average packer margins: $35.47 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.