Cattle feeding margins grew significantly last week as the cash market saw an average $3 rally. Beef and pork packers both saw their margins improve with higher cutout values, but beef packer losses remain near $100 per head.
Negotiated cash cattle sold at $189.43 per cwt. the week ending May 18, boosting feedyard margins gained $83 per head for an industry average profit of $375. Meanwhile, beef packers found a $40 per head improvement that left their average losses at $98 per head, according to the Sterling Beef Profit Tracker. That puts the margin spread at $473 per head in favor of the feeder, an increase of $34.
Composite wholesale beef prices posted $4.70 per cwt. gains to close at $302.13 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
Cattle sold last week carried a total feed cost of $378.08 per head, down $6.13 per head from the previous week, and about $188 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $162.68 per cwt., while cattle placed on feed last week have a breakeven of $184.61 per cwt., which is about $5 per cwt. higher than the previous week. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $258.62 per cwt., or $9.62 per cwt. higher than a month ago. The feeder steer price is 21% higher than last year.
The estimated total cost for finishing a steer last week was $2,277 per head, down $41 per head from the previous week and up 7% from last year’s estimate of $2,123 per head.
Fed cattle slaughter totaled an estimated 487,370, down 19,560 head from the same week last year. Packing plant capacity utilization was estimated at 83.2% compared to 86.5% last year.
Farrow-to-finish hog producers found positive margins at $46 per head last week, down $3 from the previous week. Lean carcass prices averaged $91.48 per cwt., down $2.28 per cwt. from the previous week and $2.80 per cwt. higher than last year.
Pork packers saw average profits of $9 per head, or $10 per head better than the previous week. Last year pork packer margins were $19 in the red. Hog slaughter was estimated at 2.404 million head, up 25,000 head from the previous week and down 3,000 head from last year.
Pork packer capacity utilization was estimated at 89.2% compared to 89.2% 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.)
