Beef packers saw significant margin improvement the week ending August 30, while pork packer margins, though down from the previous week, were sharply higher than a year ago, says John Nalivka, president of Sterling Marketing Inc.
Negotiated cash cattle retreated an average of $2.14 per cwt. the week ending Aug. 31 and profit margins dropped by $57 per head to an industry average of $38 per head, according to the Sterling Beef Profit Tracker. Meanwhile, beef packers saw losses improve $14 per head to a gain of $10 per head. That puts the packer/feeder margin spread at $28 per head in favor of the feeder.
Cash cattle averaged $184.03 per cwt. the week ending Aug. 31, while composite wholesale beef prices posted a $4.06 per cwt. loss to close at $313.57 per cwt.
Cattle marketed last week carried a total feed cost of $344.10 per head, up $1.66 per head from the previous week, and about $204 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $181.28 per cwt., while cattle placed on feed last week have a breakeven of $179.38 per cwt., which is about $1.90 per cwt. higher than the previous week and $25.79 per cwt. higher than the same week a year ago. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $245 per cwt., or $18 per cwt. less than a month ago.
The estimated total cost for finishing a steer (including the first cost of the feeder steer) last week was $2,538 per head, up 14% from last year’s estimate of $2,177 per head.
Fed cattle slaughter totaled an estimated 498,576 up 6,072 head from the same week last year. Packing plant capacity utilization was estimated at 85.1% compared to 84.1% last year.
View the full Sterling Beef Profit Tracker for the week ending Aug. 31.
Farrow-to-finish hog producers found positive margins of $21 per head last week, down $10 from the previous week, according to the Sterling Pork Profit Tracker Lean carcass prices averaged $81.11 per cwt., up $7.35 per cwt. from the previous week.
Hogs placed for finishing last week had a breakeven at $65.41 per head.
Pork packers saw average profits of $21 per head, down $3.37 from the previous week. Last year pork packer margins were $9.04. Hog slaughter was estimated at 2.371 million head, down 51,295 head from the same week last year.
Pork packer capacity utilization was estimated at 90.5% compared to 92.4% last year.
View the full Sterling Pork Profit Tracker for the week ending Aug. 31.
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.)
