Pork producer losses ease

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Although U.S. pork producer margins remain mired in red ink, the losses eased for the week ending Jan. 11, according to calculations by Sterling Marketing, Vale, Ore. Farrow-to-finish producers lost an average $28.36 per head for the week, a $7 improvement compared to losses of $35.89 reported the week before. One month ago producers were losing $38.53 per head, according to Sterling Marketing estimates.

The February lean hog futures contract for the week ending Jan. 11 was $84.20 per hundredweight, down $2.02 from the previous Friday, according to Ron Plain and Scott Brown, University of Missouri. April hog futures ended the week $2.73 lower at $87.12 per hundredweight. However, producers remain hopeful for a return to profitability later this spring. May hogs for the week settled at $94.80 per hundredweight; June hogs at $96.50 per hundredweight.

Hog slaughter for the week ending Jan. 11 totaled 2.284 million head, up 16.0 percent from New Year's week and up 3.0 percent compared to the same week last year, according to Plain and Brown.

Pork packer margins also remained under pressure for the week ending Jan. 11, registering a loss of $3.39 per head, after recording a loss of $3.10 per head the previous week.  One month ago, pork packer margins were $4.27 per head on the plus side.

Feed costs for the week ending Jan. 11 were estimated at $122.24 for hogs placed into finishing as of that date.  

The Sterling Pork Profit Tracker for the week ending Jan. 11:

  • Average farrow-to-finish margins: -$28.36 per head
  • Average pork packer margins: -$3.39 per head

Meanwhile, cattle feedlot losses grew by $20 last week. Losses averaged $48.68 per head for the week ending Jan. 11. That compares to losses of $28.47 per head the week before and a $254.50 per head loss one month ago.

Beef packer losses for the week ending Jan. 11 also remained under pressure. Packers lost an average of $66.36 per head for the week, nearly unchanged from losses recorded the prior week.

The Sterling Beef Profit Tracker for the week ending Jan. 11:

  • Average feedlot margins: -$48.68 per head
  • Average packer margins: -$66.36 per head
  • Sterling Profit Quotient: -163.9

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



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