Profit Tracker: Cattle Margins Slip, Hogs In The Black
Cattle traded more than $1 higher but rising feed costs erased some of the modest profits found on average feedyard closeouts last week. Cattle feeding margins declined $23 per head to an average of $25 the week ending Feb. 5, according to the Sterling Beef Profit Tracker.
Total costs for finishing a steer have climbed above year-ago for the first time since January 2020 at $1,519, about $14 higher than last year.
Despite higher bids for cash cattle, beef packers saw their margins increase $3 to $392 per head. The beef cutout price increased $4 per cwt. to $233.71. The result was a packer/feeder margin spread of $367 per head.
Beef packer capacity utilization was estimated at 89.6% with an estimated 653,000 head slaughtered. A year ago packer capacity was estimated at 86.9% with a weekly kill of 631,261 head. Carcass weights this year are running 19 pounds heavier at 846 pounds.
Beef packer leverage in the current market is evident in the fact cash cattle prices are $7 per cwt. lower than the same week a year ago, yet the beef cutout price was $23 per cwt. higher. A year ago packers saw profits of $77 per head while feeding margins were $143 per head. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Farrow-to-finish pork producers saw their margins climb out of the red for the first time in weeks, with profits of $7.37 per head. Lean carcass prices traded at $64.49 per cwt., an increase of $5.73 per cwt. from the previous week, and $10 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 $30 per head, down $12 per head from the previous week, but $13 per head higher than last year. Pork packer capacity utilization was estimated at 95.7%, compared to 95% a year ago.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2021 will average $123 per cow. For feedyards, Nalivka projects an average profit of $43 per head in 2021, and packer margins are projected to average $251 per head.
For farrow-to-finish pork producers, Nalivka projects 2021 will produces losses of $13 per head. Pork packers are projected to earn $37 per head in 2021.
