Pork producer margins are headed in the wrong direction; meanwhile packers are gaining ground. Losses for farrow-to-finish producers more than doubled in a week, according to Sterling Marketing, Vale, Ore.

For the week ending Sept. 7, producers lost an average $29.01 per head. That’s down more than $15 from the week before when margins averaged a $13.25-per-head loss. For the same period last year, producers were losing $1.64 per head.  It was just one-short month ago that pork producers were pocketing $15.09 per head.

Hog prices continue to erode, quoted last week averaging $69.85 per hundredweight for Western Corn Belt, lean-carcass bids. That’s down from $76.56 per hundredweight the week before, $92.38 one month ago and $85.17 one year ago.

 While feed prices turned a bit lower, they are still the force driving producer margins lower.  Feed costs for pigs placed into the finishing unit as of Sept. 7 is estimated at $139.69, according to Sterling Marketing. One year ago, that cost was $116.63.

Packer margins continued their upward trend, coming in at a $17.03-per-head profit on the week. That’s $5.75 per head better than the week before, and exactly matches packer margins of one year ago. One month ago, packers were recording a 3 cents-per-head loss.

The Sterling Pork Profit Tracker for the week ending Sept. 7:

  • Average farrow-to-finish margins: -$29.01 per head
  • Average pork packer margins: $17.03 per head

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.

Cattle feedlot margins remained in the red, but showed improvement on the week ending Sept. 8, gaining $31 per head. Losses averaged $78.46 per head, but that compares to losses of $109.48 the week before and $109.43 one year ago. In fact, last week was the first time in two months that losses dropped below the $100 mark.

Packer margins slipped further, reporting an average loss of $33.34 per head, compared to $8.66 the week before. For the same week in 2011, packers lost an average of $8.27 per head.

The Sterling Beef Profit Tracker for the week ending Sept. 8:

  • Average feedyard margins: -$78.46 per head
  • Average packer margins: -$33.34 per head
  • Sterling Profit Quotient: -245.2

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.