Profit Tracker: Cattle Margins Slim, Hogs Gain
Market hogs sold last week found twice the profit margin of fed steers. That’s mainly due to a rally that has added nearly $22 per cwt. to lean hog carcass prices over the past month, while cash cattle prices have been stuck in neutral.
Margins for cattle sold last week average $25 per head, up from the previous week’s $13 profits, and significantly better that the $22 per head loss recorded the first week of March last year, according to the Sterling Beef Profit Tracker. Cash fed cattle prices averaged $113.51 per cwt., steady to 50 cents lower than the previous week.
Average closeouts saw total costs for finishing a steer about $21 per head lower than the previous week at $1,517, including about $8 less per head for feed and $12 less for feeder cattle.
Packer margins declined $51 per head to an average of $372. The result was a packer/feeder margin spread of $346 per head, down $62 from the previous week’s $408.
Beef packer capacity utilization was estimated at 93.7%, down 0.2% from the previous week, with an estimated 665,000 head slaughtered. A year ago packer capacity was estimated at 87.8% with a weekly kill of 637,597 head. Carcass weights this year are running 9 pounds heavier at 843 pounds.
Beef packer margins declined based on a $$6 per cwt. decline in the beef cutout to $233.28. A year ago the cutout averaged $205.48. A year ago packer profits were $84 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 $18 per head with positive margins for the fifth consecutive week and total profits of $480 per head. Lean carcass prices traded at $86.12 per cwt., an increase of $7.22 from the previous week, and $22 per cwt. higher than a month ago. A year ago pork producers lost an average of $14 per head.
Pork packer margins averaged a profit of $6 per head, down $15 per head from the previous week and $10 per head lower than last year. Pork packer capacity utilization was estimated at 91.2% compared to 96% 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 losses of $12 per head. Pork packers are projected to earn $49 per head in 2021.
