Profit tracker: Pork producer margins lose ground

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Pork producer margins lost another $7.41 per head for the week ending on Nov. 2, compared to the week before. Meanwhile for the same week, packer margins improved by 57 cents per head.  

Farrow-to-finish producers averaged a $9.37-per-head loss on the week, according to Sterling Marketing, Vale, Ore. That compares to the previous week when producer margins were in the red by just $1.96 per head. One year ago, producers were making a $18.43-per-head profit on average in early November.

Feed costs have generally stabilized in the last few weeks, holding around $134 for hogs placed into finishing; a year ago, that cost was $103.14.

Hog slaughter continues its strong seasonal run, although weights continue light. Hog prices for the week of Nov. 2, were down slightly at $82.26 per hundredweight compared with the week before at $84.59 based on western Corn Belt negotiated lean-carcass bids.  

Packer profits inched up slightly, reported at $2.84 per head, compared to $2.27 the week before. Sterling Marketing reports that for early November in 2011, packers were averaging a profit of $9.27 per head.    

The Sterling Pork Profit Tracker for the week ending Nov. 2:

  • Average farrow-to-finish margins: -$9.37 per head
  • Average pork packer margins: $2.27 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 feedlot losses have been fluctuating, but showed an improvement for the week ending on Nov. 3. Average margins were reported at $32.68 per head, compared with $56.64 for the week before and a $34.82-per-head profit for the same period in 2011.

Declines in boxed beef prices and steady cash fed cattle prices last week caused packer margins dropped by more than $30 per head. Sterling Marketing reports beef packers lost $76.48 per head for the week ending Nov. 3. One week before, losses were $45.46 per head and one year ago they averaged $55.18.

The Sterling Beef Profit Tracker for the week ending Nov. 3:

  • Average feedyard margins: -$32.68 per head
  • Average packer margins: -$76.48 per head
  • Sterling Profit Quotient: -118.2

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.



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