Profit Tracker: Beef Packer Losses Deepen
Negative margins continue growing for beef packers as tightening supplies of cattle support cash prices $17 per cwt. higher than the same week a year ago. Average cattle feeding margins were estimated at $129 per head the week ending Dec. 3, 2022, according to the Sterling Beef Profit Tracker.
Beef packer margins were estimated at a $73 per head loss, the largest per head loss for packers since Feb. 2015, according to Sterling’s database. That compares with packer profits of $378 per head the same week a year ago.
Last week’s Choice beef cutout averaged $249.35 per cwt., down $1.88 from the previous week and down $21.67 per cwt. from a year ago.
Costs associated with finishing cattle have increased dramatically since April. The cattle sold last week carried a total feed cost of $582 per head, which is 26% higher than the $433 feed costs for cattle sold the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.
Cattle marketed last week had a breakeven of $147.92 per cwt., while cattle placed on feed last week have a breakeven of $151.01 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $175.94 per cwt., and feed costs of $571 per head. The feeder steer price is 7% higher than last year.
The estimated total cost for finishing a steer last week was $2,071 per head, up 18% from last year’s estimate of $1,690 per head.
Cattle slaughter totaled an estimated 663,000 head, about 4,000 head less than the same week last year. Packing plant capacity utilization was estimated at 89.2% compared to 92.4% last year.
Farrow-to-finish hog producers saw losses of $2 per head last week, down up about $10 per head from the previous week, and up $29 per head compared to last year’s $31 per head losses. Lean carcass prices averaged $88.06 per cwt., down $0.14 per cwt. from the previous week and up $26.43 from last year (30%).
Pork packers saw losses of about $8 per head, or $5 per head more than the previous week and $49 per head lower than the same week a year ago. Hog slaughter was estimated at 2.590 million head, down 377,000 head from the previous week and down 65,000 head from last year.
Pork packer capacity utilization was estimated at 96.4% compared to 98.8% last year.
(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.)
