Profit Tracker: Solid Margins For Cattle, Hogs

Cattle and hog feeding operations both recorded solid average profits for the week ending April 2, 2021, boosted by higher average farmgate prices. Cattle closeouts were positive for the second consecutive week, while positive hog margins entered a third consecutive month, according to the Sterling Profit Tracker.

Feedlots found average profits of $133 per head last week, fully $67 per head higher than the previous week. The week ending March 19 saw feedyard margins at negative $1 per head. A year ago feedyards lost an average of $80 per head.

Cash cattle prices posted an average $2.60 per cwt. advance to $118.41, the highest weekly average since May of last year, according to the Sterling Beef Profit Tracker. Average closeouts saw total costs for finishing a steer about $31 per head lower than the previous week at $1,478, most of that due to lower feeder cattle prices factored into the analysis.

Packer margins gained $80 per head to an average of $449.  The result was a packer/feeder margin spread of $316 per head, up $14 per head from the previous week’s $307.

Beef packer capacity utilization was estimated at 84.8%, down 5.1% from the previous week, with an estimated 609,000 head slaughtered. A year ago packer capacity was estimated at 88.5% with a weekly kill of 631,299 head. Carcass weights this year are running 1 pound heavier at 831 pounds.

Beef packer margins gained based on a $12.36 per cwt. advance in the beef cutout to $246.01. A year ago the cutout averaged $236.90. A year ago packer profits were estimated at $338 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 $9 per head with positive margins for the ninth consecutive week and total profits of $75 per head. Hog profit margins have increased $27 per head over the past month.

Lean carcass prices traded at $100.55 per cwt., an increase $3.94 per cwt. from the previous week, and $14 per cwt. higher than a month ago. A year ago pork producers lost an average of $13 per hog.

Pork packer margins averaged a profit of $8 per head, down $6 per head from the previous week and $2 per head lower than last year. Pork packer capacity utilization was estimated at 87.6% compared to 91.3% 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.


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