Negotiated cash cattle sold $1.30 per cwt. lower last week and feedyard margins were reduced by $75 per head for an industry average profit of $327. Meanwhile, beef packers saw their margins slip another $2 with losses of $86 per head the industry average, according to the Sterling Beef Profit Tracker. That puts the packer/feeder margin spread at $413 per head in favor of the feeder.
Cash cattle averaged $189.82 per cwt. the week ending June 1, while composite wholesale beef prices posted $2.57 per cwt. gains to close at $310.69 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 $376.42 per head, up $2.98 per head from the previous week, and about $204 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $166.46 per cwt., while cattle placed on feed last week have a breakeven of $179.77 per cwt., which is about $5 per cwt. lower than the previous week. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $251.86 per cwt., or $5 per cwt. less than a month ago. The feeder steer price is 13% higher than last year.
The estimated total cost for finishing a steer last week was $2,330 per head, up $57 per head from the previous week and up 8% from last year’s estimate of $2,137 per head.
Fed cattle slaughter totaled an estimated 439,000, down 13,000 head from the same week last year. Packing plant capacity utilization was estimated at 75.0% compared to 77.3% last year.
Farrow-to-finish hog producers found positive margins of $45 per head last week, up $1 from the previous week. Lean carcass prices averaged $90.16 per cwt., up $0.74 per cwt. from the previous week and $2.48 per cwt. higher than last year.
Pork packers saw average profits of $15 per head, or $4 per head better than the previous week. Last year pork packer margins were $15 in the red. Hog slaughter was estimated at 2.155 million head, down 207,000 head from the previous week and up 131,000 head from last year.
Pork packer capacity utilization was estimated at 79.8% compared to 74.9% 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.)
