“The key is demand and managing feedlot break-evens as cattle numbers continue to decline,” says John Nalivka, president of Sterling Marketing Inc.
Negotiated cash cattle retreated an average of $2.76 per cwt. the week ending Sept. 7 and profit margins dropped by $23 per head to an industry average of $15.52 per head, according to the Sterling Beef Profit Tracker. Meanwhile, beef packers saw profits increase $18 per head to a gain of $27 per head. That puts the packer/feeder margin spread at $12 per head in favor of the packer.
Cash cattle averaged $181.27 per cwt. the week ending Sept. 7, while composite wholesale beef prices posted a $1.45 per cwt. loss to close at $312.12 per cwt.
Cattle marketed last week carried a total feed cost of $345.92 per head, up $1.82 per head from the previous week, and about $214 less than feed costs for cattle sold the same week a year ago.
The estimated total cost for finishing a steer last week was $2,522 per head, up 11.5% from last year’s estimate of $2,232 per head.
Fed cattle slaughter totaled an estimated 469,142 up 29,830 head from the same week last year. Packing plant capacity utilization was estimated at 80% compared to 75% last year.
View the full Sterling Beef Profit Tracker for the week ending Sept. 7.
Farrow-to-finish hog producers found positive margins of $19 per head last week, down $2 from the previous week, according to the Sterling Pork Profit Tracker Lean carcass prices averaged $80.16 per cwt., up $0.05 per cwt. from the previous week.
Hogs placed for finishing last week had a breakeven at $67.53 per head.
Pork packers saw average profits of $22 per head, up $0.75 from the previous week. Last year pork packer margins were $23.44. Hog slaughter was estimated at 2.309 million head, up 120,225 head from the same week last year.
Pork packer capacity utilization was estimated at 88.1% compared to 83.5% last year.
View the full Sterling Pork Profit Tracker for the week ending Sept. 7.
The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)
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