A slowdown in the feed-grain price rally kept pork producer profit margins close to the previous week’s mark. Packer margins actually strengthened for the week ending Aug. 17.
Margins for farrow-to-finish producers averaged $14.76 per head at the close of last week compared with $15.09 on Aug. 10, according to Sterling Marketing, Vale, Ore. However, for the same period one year-ago pork producers were facing much brighter prospects with margins averaging $32.53 per head.
The hog price for the week, based on Western Corn Belt quotes on a carcass-weight basis, was $88.80 per hundredweight. That compares to the previous week’s price at $92.38, and in 2011 when the price was $103.19 per hundredweight.
Producer breakeven costs for pigs placed in barns last week was $198.25 versus $172.49 in 2011.
Packer margins had just barely turned positive as of Aug. 10, but gained a bit more strength last week. Packers averaged a $4.94-per-head profit margin as of Aug. 17, compared to $0.33 per head the week before and $7.48 for the same week one year ago.
The Sterling Pork Profit Tracker for the week ending Aug. 17:
- Average farrow-to-finish margins: $14.76 per head
- Average pork packer margins: $4.94 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 feeding losses slipped a bit last week, dropping to $198.16 per head versus $185.58 the week before. Losses in 2011 were just $4 per head for the same timeframe, according to the Sterling Beef Profit Tracker.
Packer margins made a dramatic turnaround, moving from a loss of $45.28 per head to a profit of $8.67. For the same week a year ago, packer profits were $35.78 per head. The industry profitability index was reported at -595.2.
The Sterling Beef Profit Tracker for the week ending Aug. 18.
- Average feedyard margins: -$198.16 per head.
- Average packer margins: $8.67 per head.
- Sterling Profit Quotient: -595.2.
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.