Profit Tracker: Packers Preserve Their Margins
Grilling season nears with packer margins firmly in the black. Cash cattle prices declined for the fourth consecutive week, but average cattle feeding margins remain above $300 per head.
Cash cattle prices averaged $175.34 per cwt, down $2.71 per cwt. Average cattle feeding margins fell $39 per head to a profit of $331, according to the Sterling Beef Profit Tracker.
Beef packers, meanwhile, found average profits of about $92 per head, a gain of $29 per head from the previous week. Packer margins a year ago were estimated at $136 per head.
Wholesale beef prices were mostly steady at $306.72 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 $591 per head, up $2 per head from the previous week, but 21% higher than the $468 feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $151.69 per cwt., while cattle placed on feed last week have a breakeven of $163.75 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $203.60 per cwt., and feed costs of $518 per head. The feeder steer price is 24% higher than last year.
The estimated total cost for finishing a steer last week was $2,123 per head, up 12% from last year’s estimate of $1,879 per head.
Fed cattle slaughter totaled an estimated 481,579 head, about 773 head fewer than the previous week and 34,866 fewer than the same week last year. Packing plant capacity utilization was estimated at 84.0% compared to 90.1% last year.
Farrow-to-finish hog producers saw losses of $20 per head last week, about $5 per head less than the previous week. Pork producers saw profits of $69 per head the same week a year ago. Lean carcass prices averaged $76.85 per cwt., an increase of $3.16 per cwt. from the previous week.
Pork packers found margins at roughly breakeven last week, which is roughly $2 better than the previous week. Last year pork packers were losing about $18 per head. Hog slaughter was estimated at 2.447 million head, up 60,000 head from the previous week and up 43,000 head from last year.
Pork packer capacity utilization was estimated at 90.3% compared to 87.1% 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.)
