Profit Tracker
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.
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.
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.
Cattle feeding profits improved with $1 per cwt. higher cash prices and lower feeder cattle prices calculated against last week’s closeouts.
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.