Pork producer losses ease

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While still facing significant red ink, pork producer losses eased for the week ending Jan. 4, according to calculations by Sterling Marketing, Vale, Ore. Farrow-to-finish producers lost an average $35.89 per head for the week, compared to losses of $40.38 recorded the week before. One year ago producers were losing $9.83 per head, according to Sterling Marketing estimates.

However, a return to profitability is expected in late-April or early-May when the spring hog price rally is underway, according to Chris Hurt, agricultural Extension economist, Purdue University.

Meanwhile, pork packer margins slipped further into negative territory for the week ending Jan. 4 registering a loss of $3.10 per head, after recording a loss of $2.25 per head the previous week.  One year ago, pork packer margins were $1.10 per head on the plus side.

Hog slaughter for the week ending Jan. 4 totaled 1.975 million head, up 12.5 percent from the week before, but down 4.3 percent compared to the same week last year, according to Ron Plain and Scott Brown, University of Missouri.

Western Corn Belt negotiated hog prices were little changed for the week ending Jan. 4 at $83.87 per hundredweight compared to $82.50 the week before.

Feed costs for the week ending Jan. 4 were estimated at $121.35 for hogs placed into finishing as of that date.  

The Sterling Pork Profit Tracker for the week ending Jan. 4:

  • Average farrow-to-finish margins: -$35.89 per head
  • Average pork packer margins: -$3.10 per head

Cattle feedlot losses also eased last week. Losses averaged $28.47 per head for the week ending Jan. 5. That compares to losses of $42.18 per head the week before and a $64.08 per head loss for the same week in 2011.

Beef packer losses grew for the week ending Jan. 5. Packers lost an average of $66.68 per head for the week compared to adjusted losses of $64.39 recorded the prior week.

The Sterling Beef Profit Tracker for the week ending Jan. 5.

  • Average feedlot margins: -$28.47 per head
  • Average packer margins: -$66.68 per head
  • Sterling Profit Quotient: -103.0

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., John Nalivka, president, Vale, Ore., and are published weekly by Pork Network.



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