Profit Tracker: Rallies Boost Cattle, Hog Margins
Cattle and hog feeding operations are in the midst of their most profitable time since before the pandemic began more than a year ago. Hog margins were positive for the 10th consecutive week, according to the Sterling Profit Tracker.
A year ago feedyards lost an average of $142 per head.
Cash cattle prices posted an average $4 per cwt. advance to $122.81, the highest weekly average since early last year, according to the Sterling Beef Profit Tracker. Average closeouts saw total costs for finishing a steer about $33 per head lower than the previous week at $1,445, most of that due to lower feeder cattle prices factored into the analysis. Total finishing costs were $125 per head lower than last year.
Packer margins gained $117 per head to an average of $563. The result was a packer/feeder margin spread of $318 per head, up $22 per head from the previous week’s $316.
Beef packer capacity utilization was estimated at 88.3%, up 4.4% from the previous week, with an estimated 641,000 head slaughtered. A year ago packer capacity was estimated at 71.7% with a weekly kill of 528,808 head. Carcass weights this year are running 12 pounds heavier at 830 pounds.
Beef packer margins gained based on a $19 per cwt. advance in the beef cutout to $264.97. A year ago the cutout averaged $223.64. A year ago packer profits were estimated at $326 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 $5 per head with positive margins for the 10th consecutive week and total profits of $80 per head. Hog profit margins have increased $26 per head over the past month.
Lean carcass prices traded at $102.43 per cwt., an increase $1.88 per cwt. from the previous week, and $13 per cwt. higher than a month ago. A year ago pork producers lost an average of $38 per hog.
Pork packer margins averaged a profit of $8.70 per head, up $1 per head from the previous week and $3 per head lower than last year. Pork packer capacity utilization was estimated at 88.4% compared to 85% 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 profits of $22 per head. Pork packers are projected to earn $20 per head in 2021.
