Profit Tracker – Packer Margins Down 87% YOY
Beef packer margins are down 87% from the same week a year ago, according to the Sterling Beef Profit tracker. Feedyard margins moved higher with last week’s rally in cash prices.
Cattle feeders saw average profits of $197 per head the week ending August 20, as the 5-area fed steer price averaged $147.77 per cwt. That price was $2.70 higher than the precious week and 17% higher than the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.
Estimated beef packer margins for the week ending August 20 were $150 per head, down $32 per head from the previous week and down 87% from estimated margins a year ago that exceeded $1,100 per head. Last week’s Choice beef cutout averaged $260.43 per cwt., about steady with the previous week but down $74 per cwt. (22%) from the same week a year ago.
Feed costs for the cattle marketed last week averaged $572 per head, down $13 from the previous week but up $130 per head from last year. The estimated total cost for finishing a steer last week was $2,153 per head, up 21% from last year’s estimate of $1,775 per head.
Cattle slaughter totaled an estimated 661,000 head, down 5,443 head (1%) from the same week last year. Packing plant capacity utilization was estimated at 90.1% compared to 88.2% the previous week and 82.4% last year.
Farrow-to-finish hog producers found profits of $85 per head last week, down $10 per head from the previous week but up $23 per head (36%) from last year. Lean carcass prices averaged $130.64 per cwt., down $10 per cwt. from the previous week but up $25.23 from last year (24%).
Pork packer saw losses of an estimated $29 per head, which is steady with the previous week but $50 per head less than the $21 profit per head from last year. Hog slaughter was estimated at 2.395 million head, down 70,000 head from the previous week and down 36,000 head (2%) from last year.
Pork packer capacity utilization was estimated at 89.0% compared to 86.43% the previous week and 90.4% 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.)
