Profit Tracker: Cattle in the Red, Hog Rally Continues
Average feedyard margins slipped below breakeven for the first time this year, with calculated losses of about $1 per head. Hog producers found average profits of $56 per head as the rally in hog prices continued.
Feedyard margins declined $16 per head last week despite cash cattle prices that were slightly higher than the previous week at $114.28 per cwt. A year ago cattle feeders lost an average of $90 per head the third week of March, according to the Sterling Beef Profit Tracker.
Average closeouts saw total costs for finishing a steer about $26 per head higher than the previous week at $1,555, including about $10 more per head for feed and $16 more for feeder cattle.
Packer margins declined $5 per head to an average of $320. The result was a packer/feeder margin spread of $321 per head, up $12 from the previous week’s $309.
Beef packer capacity utilization was estimated at 90.2%, down 0.7% from the previous week, with an estimated 655,603 head slaughtered. A year ago packer capacity was estimated at 65.3% with a weekly kill of 474,585 head. Carcass weights this year are running 4 pounds heavier at 834 pounds.
Beef packer margins declined based on a $1 per cwt. decline in the beef cutout to $226.63. A year ago the cutout averaged $241.73. A year ago packer profits were estimated at $490 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 $2 per head with positive margins for the seventh consecutive week and total profits of $56 per head. Hog profit margins have increased $36 per head over the past month.
Lean carcass prices traded at $91.68 per cwt., an increase of $2.25 from the previous week, and $20 per cwt. higher than a month ago. A year ago pork producers lost an average of $15 per head.
Pork packer margins averaged a profit of $15 per head, up $8 per head from the previous week and $25 per head lower than last year. Pork packer capacity utilization was estimated at 94.6% compared to 73% 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 $1 per head. Pork packers are projected to earn $41 per head in 2021.
