Profit Tracker: Hog Rally Continues, Beef Declines
Cattle prices declined more than $1 per cwt. last week, but the hog market rally continued. Hog margins were positive for the 12th consecutive week, according to the Sterling Profit Tracker.
Cattle feeders saw average profits of $227 per head last week, according to calculations by Sterling Marketing. Average closeouts saw total costs for finishing a steer about $52 per head lower than the previous week at $1,467, most of that due to lower feeder cattle prices factored into the analysis. Total finishing costs were $131 per head lower than last year.
Packer margins gained $67 per head to an average of $673. Beef packer capacity utilization was estimated at 92.9%, up 3.5% from the previous week, with an estimated 665,000 head slaughtered. A year ago packer capacity was estimated at 61.9% with a weekly kill of 470,129 head. Carcass weights this year are running 16 pounds heavier at 829 pounds.
Beef packer margins gained based on a $6.42 per cwt. advance in the beef cutout to $279.13. A year ago the cutout averaged $270.72. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Farrow-to-finish pork producers saw their margins gain $11 per head with positive margins for the 11th consecutive week and total profits of $98 per head. Hog profit margins have increased $32 per head over the past month.
Lean carcass prices traded at $111.48 per cwt., an increase $5.95 per cwt. from the previous week, and $15 per cwt. higher than a month ago. A year ago pork producers lost an average of $49 per hog.
Pork packers lost an average of $4 per head, down from a profit of $4 per head from the previous week and $67 per head lower than last year. Pork packer capacity utilization was estimated at 87.8% compared to 70.1% 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 $13 per head in 2021, and packer margins are projected to average $365 per head.
For farrow-to-finish pork producers, Nalivka projects 2021 will produces profits of $35 per head. Pork packers are projected to earn $23 per head in 2021.
