Profit Tracker: Lower Beef, Pork Margins

April 7, 2014 11:00 AM
Profit Tracker: Lower Beef, Pork Margins

Profit margins for both beef and pork producers fell slightly last week, yet both sectors remain solidly profitable.

Cattle feeders recorded average profits of $223 per head last week, about $19 per head lower than the previous week, according to the Sterling Beef Profit Tracker. The margins represent a $252 per head improvement over the average losses of $29 recorded last year at this time, according to estimates developed by John Nalivka, president of Sterling Marketing, Vale, Ore.

Beef cutout values declined $8.70 per cwt. last week, and beef packer margins declined $68 per head to end the week with losses of $36 per head. A month ago packers saw profits of $8 on every animal processed, and losses totaled $49 per head at the same time last year.

Farrow-to-finish hog margins declined $5.59 per head but profits remain more than $111 per head. The previous week recorded the highest pork profit margins in the Sterling Pork Profit Tracker database. Negotiated cash hog prices declined $0.35 per cwt. to $129.38 per cwt. Pork packers were estimated to lose $2.35 for every animal processed.

The spike in both cattle feeding and farrow-to-finish profits this spring is due to significantly higher cash prices and lower overall feed prices. Cash prices for fed cattle are more than $23 per cwt. higher than last year, and negotiated hog prices are nearly $50 per cwt. higher than last year.

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