Industry News - PM

Analyst notes slide in beef, chicken and pork margins


By Chris Scott on 7/22/2015

Margins on beef, chicken and pork all fell last week compared with the previous week, according to an analyst at BB&T Capital Markets.

Brett Hundley reported that U.S. spot beef packer margins moved back into the red with losses of $60 per head versus a profit of $30 per head one week before. Margins were profitable in the corresponding period one year ago at $35 per head, with beef cutout prices falling “materially” last week as live cattle costs declined slightly, Hundley said in a report to investors.

Meanwhile, U.S. spot chicken margins also declines to about 17 cents per pound, down from 19 cents in the previous week and off from the 24 cents posted in the same period in 2014. Hundley noted that chicken pricing fell while feed costs moved slightly higher last week along with lower breast meat prices and leg quarter prices. Breasts are down 30 percent from year-ago levels while leg quarters are down 45 percent year over year.

Finally, Hundley reported that U.S. spot pork packer margins also were slightly lower last week with average losses near $5 per head. The margin in the previous week was $4 per head while pork margins were positive in the same period last year at $15 per head. Pork cutout prices moved slightly higher last week although pig costs rose at a higher rate, Hundley reported.


 
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