Pork producer margins improved last week as feed prices eased on the blistering pace at which farmers harvested the drought-reduced 2012 corn crop. For the week ending Sept. 28, producer’s margins, as calculated by Sterling Marketing, Vale, Ore., were -$15.09 per head, reducing losses by about $15.00 from the prior week’s $30.88 deficit.

One year ago, pork producer margins were $6.13 per head, according to Sterling.

Lean-carcass prices for the Western Corn Belt improved by over $6 per head to $76.21 per hundredweight on the week, compared with $69.97 as of the previous Friday.

The improvement in production margins was registered prior to the release of USDA’s corn crop report issued Friday which resulted in a sharp jump in corn futures prices due to much lower than expected inventory levels. Industry analysts believe pork production losses will persist for up to six months due to near-record corn prices and historically high hog slaughter levels.

Meanwhile, the September USDA Hogs and Pigs report, also released Friday, revealed a determined effort by pork producers at reducing the nation’s hog numbers.

Feed prices for hogs placed in finishers as of Sept. 28 decreased about $5 from the previous week to $126.59.That compares to $99.52 one year ago.

Pork packer margins improved slightly to $13.50 per head for the week ending Sept. 28, compared to $12.76 the week before and $12.22 for the same week a year ago.

The Sterling Pork Profit Tracker   for the week ending Sept. 28:

  • Average farrow-to-finish margins: ($15.09) per head
  • Average pork packer margins: $13.50 per head

Beef cattle margins also declined for the week ending Sept. 28 registering a loss of $83.47 per head. This compares to a loss of $45.15 calculated for the prior week. One year ago cattlemen were in the red by $29.90 per head.

Beef packers recorded a loss of $54.58 per head, compared to a loss of $51.58 the prior week. One year ago, packers were in the red by $36.54 per head.  

The Sterling Beef Profit Tracker for the week ending Sept. 28:

  • Average feedlot margins: ($83.47) per head
  • Average packer margins: ($54.58) per head
  • Sterling Profit Quotient: -265.8

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 and Beef Profit Trackers are produced by Sterling Marketing Inc. and John Nalivka, president, Vale, Ore., and are published weekly by Pork Network.