Pork producers' hopes rise on profitability potential

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Although still recording losses, pork producer margins improved for the week ending Jan. 25, buoying producers' hopes for a much-anticipated return to profitability. According to calculations by Sterling Marketing, Vale, Ore., farrow-to-finish producers lost an average $13.01 per head for the week, compared to losses of $20.85 recorded the week before. One month ago producers were losing $40.38 per head, according to Sterling estimates.

December was the fifth consecutive month with red ink for pork producers, according to Ron Plain, University of Missouri Extension agricultural economist. For all of last year, the average market hog lost $12.47 per head making 2012 the worst year financially since 2009.

Meanwhile, pork packer margins slid deeper into negative territory for the week ending Jan. 25 registering a loss of $8.40 per head, after recording a loss of $6.84 per head the previous week.  One month ago, pork packer margins were $2.25 per head on the negative side.

Feed costs for the week ending Jan. 25 were estimated at $124.94 for hogs placed into finishing as of that date.  

The Sterling Pork Profit Tracker for the week ending Jan. 25:

  • Average farrow-to-finish margins: -$13.01 per head
  • Average pork packer margins: -$8.40 per head

Cattle feedlot losses grew last week. Losses averaged $141.99 per head for the week ending Jan.26. That compares to losses of $99.46 per head the previous and a $67.07 per head loss for the week one month ago.

Beef packer losses eased for the week ending Jan.26. Packers lost an average of $44.92 per head for the week compared to losses of $49.62 recorded the prior week.

The Sterling Beef Profit Tracker for the week ending Jan.26:

  • Average feedlot margins: -$141.99 per head
  • Average packer margins: -$44.92 per head
  • Sterling Profit Quotient: -439.8

Sterling Marketing provides the Pork and Beef Profit Trackers, which are calculated using actual weekly prices for hogs and cattle, feed costs, pork and beef cutout prices and other factors that influence profit margins.The Sterling Pork and Beef Profit Trackers are produced by Sterling Marketing Inc. and John Nalivka, president, Vale, Ore., and are published weekly by PorkNetwork.



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