This has been a tough year for meat-packer margins, especially in the pork sector, according to the Livestock Marketing Information Center. LMIC notes that packer margins have suffered dramatically this year, averaging less than half of those posted in 2008. Pork packer margins may continue to struggle for the balance of 2009.
Margins have been dismal this year, according to LMIC. The live to cutout spread began to narrow last October when the deterioration in overall economic conditions accelerated and has continued in 2009. In January, pork packer margins fell below $10 per head and by February the spread narrowed even further to $5 per head, a value not seen since the mid-1990’s.
Packer margins did improve some in the spring months due to slightly better wholesale and byproduct values, but any additional strength was derailed by the impacts of the H1N1 situation on the pork market as packer margins dropped below $7 per head in May.