Profit Tracker
Cattle feeders and pork producers continue to experience significant per head losses as market prices trend lower following slaughter and processing challenges from the COVID-19 pandemic.
Based on cash sales of $108.77, cattle closeouts lost an average of $90 per head the week ending March 15.
Sharply higher beef cutout values produced windfall profits for beef packers last week while cattle feeders saw closeouts with average losses about steady, according to the Sterling Beef Profit Tracker.
Cattle and hog feeding operations saw their margins remain modestly profitable last week with little movement in cash prices. Both cattle and hog feeding margins are higher than last year at the same time.
Cattle and hog finishing margins are both modestly positive for the seventh consecutive week, though hog margins saw a slight decline with lower lean carcass prices.
Cattle and hog finishing margins remain positive for the sixth consecutive week, but cash prices for both declined modesty last week and margins eroded.
Closeouts on cattle and hogs marketed last week remain modestly profitable for the sixth consecutive week, according to calculations by Sterling Marketing.
Cattle and hog finishing margins were modestly positive the first week of December, marking the 11th consecutive week of profitability. Packer margins remain historically high.
Cattle and hog feeding margins were little changed last week, with both recording modest losses. Beef packers saw improved margins on significant gains in wholesale beef prices.
On a percentage basis, beef packer margins declined significantly last week. It’s all relative, of course, since the starting point from the previous week was stunning.
Cash fed cattle prices ended last week $10 per cwt. lower than last year while the beef cutout closed $16 higher than the same week a year ago. The result? Packer margins $314 per head more than last year.
There are few losers in the cattle market right now. From packers all the way down to cow-calf producers, current prices this summer are turning profits far into what is typically a seasonal lull.
America’s cattle feeders earned an average of $323 on a cash basis for every steer and heifer they sent to market during the first eight months of 2017.
Cattle feeding profits improved with $1 per cwt. higher cash prices and lower feeder cattle prices calculated against last week’s closeouts.
A $1 per cwt rally helped boost cattle feeding profits marginally last week while packers lost a little off their large margins.
Packer margins improved $55 per head last week as Choice beef cutout values gained nearly $4 per cwt and cash cattle prices declined $1 per cwt.
Cattle feeding losses averaged $83 per head last week, while packers recorded $168 per head profits, according to the Sterling Beef Profit Tracker.
While cash cattle prices slipped only modestly, cattle feeders saw margins erode by $86 per head, falling from an average profit of $38 two weeks ago to an average loss of $49 per head last week.
The cash market for fed cattle last week gave some relief to feeders and overall market sentiment in the wake of the prior week’s $5/cwt. decline.
Losses continued to grow for feedyards and the spread between feeder losses and packer profits only widened with a $1.50 per cwt. decline in cash cattle prices last week.
Beef packer continued with a stranglehold on cattle markets last week, buying a few cattle to fill their needs at lower money and keeping operating margins historically high.
Dr. Pat Westhoff joins AgriTalk’s Chip Flory to share his spin on the latest trends in crop markets, livestock outlooks and projections for net farm income.
Cattle and hog margins are headed south as supplies build and packers run near capacity.