Pork producer profit margins gained more than $8 per head on the week ending June 8. A decline in market hog slaughter has supported the price and profit advance. The timing is good as U.S. consumers embrace grilling season and meat options are tight. Meanwhile, packer margins moved $7 per head deeper into the red for the same week.
For farrow-to-finish producers, the average profit margin reported for the week ending June 8 was $19.76 per head, according to Sterling Marketing, Vale, Ore. That compares to a $8.28-per-head profit for the previous week and $13.95 during the comparable week in 2011.
Feed costs continue to offer relief, down more than $12 per head versus year-ago levels. Market hog weights are starting to suggest that hogs gained well and have moved to market a bit early, which would support prices.
Packer margins lost ground, with losses dropping back to $15.79 per head from the previous week’s deficit of $8.90 per head. That compares to $2.93 per head for the same week in 2011.
Western Corn Belt negotiated hog prices rose to average $91.36 per hundredweight for the week, down $6.22 per head from the week before. For the equivalent week in 2011, hog prices averaged $90.24 per hundredweight.
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 8:
- Average farrow-to-finish margins: $19.76 per head
- Average pork packer margins: -$15.79 per head
Cattle feeding margins improved by $7.38 per head from the week before, reports the Sterling Beef Tracker. Feeder margins for the week ending June 9 averaged a loss of $66.64 per head, compared with $74.02 the week before, and a $62.62-per-head loss for the same week in 2011.
For the week, beef packer margins slipped $14.75 per head. By close of the week on June 9, packers reported a $22.72-per-head profit. That compares with $37.47 per head the week before and $74.16-per-head-profit for the same week in 2011.
Cash fed cattle prices improved by just more than $1 per head at $122. The week before prices averaged $120.92 per head and one year ago they were $104.94.
The Sterling Beef Profit Tracker for the week ending June 9:
- Average feedyard margins: -$66.64 per head
- Average packer margins: $22.72 per head
- Sterling Profit Quotient: -195.1
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.