Profit Tracker: Cattle, Hog Profits Trend Higher
Cattle and hog feeding margins posted identical $66 per head profits last week, according to the Sterling Profit Tracker. Cattle rebounded out of the red on the strength of a nearly $2 per cwt. advance in cash prices while pork margins gained $10 per head following a $5 per cwt. price advance.
Cash cattle prices averaged $115.81 per cwt. last week, the highest weekly average since May of 2020. A year ago feedyard margins were $25 per head with a cash price of $119.25, according to the Sterling Beef Profit Tracker.
Average closeouts saw total costs for finishing a steer about $88 per head lower than the previous week at $1,509, most of that due to lower feeder cattle prices factored into the analysis.
Packer margins gained $50 per head to an average of $370. The result was a packer/feeder margin spread of $304 per head, down $17 from the previous week’s $321.
Beef packer capacity utilization was estimated at 88.3%, down 1.9% from the previous week, with an estimated 639,523 head slaughtered. A year ago packer capacity was estimated at 90.9% with a weekly kill of 650,009 head. Carcass weights this year are running 4 pounds lighter at 830 pounds.
Beef packer margins gained based on a $7 per cwt. advance in the beef cutout to $233.65. A year ago the cutout averaged $253.61. A year ago packer profits were estimated at $529 per head. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Farrow-to-finish pork producers saw their margins gain $10 per head with positive margins for the eighth consecutive week and total profits of $66 per head. Hog profit margins have increased $36 per head over the past month.
Lean carcass prices traded at $96.61 per cwt., an increase of $4.93 from the previous week, and $17 per cwt. higher than a month ago. A year ago pork producers saw average profits of $5 per head.
Pork packer margins averaged a profit of $14 per head, down $1 per head from the previous week and $12 per head lower than last year. Pork packer capacity utilization was estimated at 95.8% compared to 94.2% a year ago.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2021 will average $125 per cow. For feedyards, Nalivka projects an average profit of $1 per head in 2021, and packer margins are projected to average $304 per head.
For farrow-to-finish pork producers, Nalivka projects 2021 will produces profits of $22 per head. Pork packers are projected to earn $20 per head in 2021.