Last Updated On: October 23, 2024

Profit Margins Shift: Beef Packers Face Losses While Pork Packers Stay Profitable

The latest Sterling Profit Tracker has revealed a sharp contrast in the performance of beef and pork packers.

While pork packers have maintained profitable margins, beef packers have seen their profits fall into negative territory, signaling a significant shift in the meatpacking industry.

Beef Packers Face Declining Profits

For the week ending September 21, beef packers saw a $54 per head drop in profits, leading to a loss of $18 per head. This downturn occurred despite an increase in cash cattle prices, which averaged $184.25 per cwt.

The primary reason for the decline in profitability is the decreasing composite wholesale beef prices, which fell by $4 per cwt, settling at $303.96 per cwt.

However, the cost of feeding cattle has dropped to $417.05 per head, which is about $33 lower than the same period last year.

Pork Packers Maintain Profitability Despite Slight Decline

In contrast, farrow-to-finish hog producers continued to experience positive margins, although slightly reduced from the previous week. Pork packers reported an average profit of $20 per head, down $2 from the prior week.

Despite the slight decline, pork packers remain profitable compared to their beef counterparts. Lean carcass prices for pork held steady at $79.04 per cwt.

Strong Capacity Utilization Keeps Pork Packers Profitable

One factor contributing to the pork sector’s continued profitability is strong capacity utilization, which was estimated at 93.3% for pork packers, slightly down from last year’s 94.3%.

Hog slaughter numbers were also lower, estimated at 2.446 million head, down nearly 27,000 from the same week in 2023.

Despite this reduction, pork packers have managed to maintain profitability by efficiently navigating pricing and operational challenges.

Volatility in the Meatpacking Industry

The contrasting fortunes of beef and pork packers underscore the ongoing volatility in the meatpacking industry.

Beef producers are under increasing pressure from fluctuating wholesale prices and input costs, while pork packers continue to sustain positive returns despite facing minor setbacks.

The Sterling Profit Tracker will keep monitoring these trends as both industries adapt to the unpredictable nature of meat production.

Stay updated on the shifting dynamics in beef and pork profitability. Visit our homepage for more in-depth industry reports

About the author

Timothy Woods
CEO / Co-Founder
Timothy Woods holds a Kinesiology and Exercise Science degree from Jacksonville University and is CCC & GMU Certified. He's also the main man behind Carnivore Style. This food aficionado combines science and experience to spread the word about the carnivore lifestyle.
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