Profit margins for cattle and hog producers continue drifting further apart. Feedlot managers are experiencing a spring rally of historic proportions while hog producers are mired in red ink just a year after enjoying good profits.
Cash cattle prices were lower for the first time in a month, but wholesale beef prices moved higher for the fifth consecutive week. Average profit margins for cattle feeders were estimated at $387 per head, according to the Sterling Beef Profit Tracker.
Beef packers, meanwhile, found average profits of about $11 per head, up from losses of about $2 per head the week before. Packer margins a year ago were estimated at $256 per head.
Wholesale beef prices improved $8.45 per cwt. to $304.40 per cwt., which is a two-week gain of $17.46 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.
Cattle sold last week carried a total feed cost of $582 per head, down $15 per head from the previous week, but 20% higher than the $463 feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $151.75 per cwt., while cattle placed on feed last week have a breakeven of $162.55 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $200.19 per cwt., and feed costs of $530 per head. The feeder steer price is 20% higher than last year.
The estimated total cost for finishing a steer last week was $2,124 per head, up 13% from last year’s estimate of $1,778 per head.
Fed cattle slaughter totaled an estimated 487,648 head, about 7,000 head more than the previous week but 31,600 head fewer than the same week last year. Packing plant capacity utilization was estimated at 79.3% compared to 84.7% last year.
Farrow-to-finish hog producers saw losses of $32 per head last week, about $7 per head more than the previous week. Pork producers saw profits of $72 per head the same week a year ago. Lean carcass prices averaged $70.25 per cwt., a decline of $3.56 per cwt. from the previous week.
Pork packers found profits of about $8 per head last week, up from just under breakeven last week. Last year pork packers were losing about $8 per head. Hog slaughter was estimated at 2.368 million head, down 9,000 head from the previous week and up 54,000 head from last year.
Pork packer capacity utilization was estimated at 89.7% compared to 86.1% 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.)
