Profit Tracker: Cattle Feeding Margins At Breakeven
Cattle feeding margins narrowed significantly the week ended Jan. 28, with average profits at $15 per head, a decline of $45 from the previous week. The decline was the result of average cash prices of $154.86 per cwt., down $0.57 per cwt., and feed costs that increased $36 per head, according to the Sterling Beef Profit Tracker.
Beef packers found estimated profits of $84 per head last week, down $24 per head from the previous week, and down $471 per head from the same week a year ago.
Costs associated with finishing cattle have increased dramatically since April. Cattle sold last week carried a total feed cost of $572 per head, which is 23% higher than the $442 feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $153.75 per cwt., while cattle placed on feed last week have a breakeven of $152.47 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $176.77 per cwt., and feed costs of $581 per head. The feeder steer price is 13% higher than last year.
The estimated total cost for finishing a steer last week was $2,152 per head, up 18% from last year’s estimate of $1,774 per head.
Fed cattle slaughter totaled an estimated 500,840 head, about 10,000 head more than the previous week and 3,000 head less than the same week last year. Packing plant capacity utilization was estimated at 94.5% compared to 90.6% last year.
Farrow-to-finish hog producers saw losses of $31 per head last week, about steady with losses the previous week. Pork producers saw positive margins of about $19 per head the same week a year ago. Lean carcass prices averaged $73.53 per cwt., up $0.47 per cwt. from the previous week but down $6.29 from last year.
Pork packers saw profits of about $7 per head, or $2 per head more than the previous week. Last year pork packers saw profits of $25 per head. Hog slaughter was estimated at 2.536 million head, up 5,000 head from the previous week and up 7,000 head from last year.
Pork packer capacity utilization was estimated at 94.3% compared to 94.0% 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.)
