Profit Tracker: Feeding Costs 25% Higher YOY
Profit margins are up for cattle feeders but they’re facing much higher costs compared to a year ago.
Cattle sold last week for a national average of $152.73 per cwt., the highest price in seven years, and resulted in average profits of $188 per head, according to the Sterling Beef Profit Tracker. That’s a $30 margins increase from the previous week, and $130 per head higher than last year.
Cattle placed on feed last week, however, are estimated to have a breakeven of $152.73 per cwt. That’s based on 750-800 lb. feeder steers at $176.20 per cwt., and feed costs of $597 per head. The feeder steer price is 12% higher than last year. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.
Estimated beef packer margins for the week ending Oct. 29 were $64 per head, up $46 per head from the previous week and down 91% from estimated margins a year ago of $673 per head. Last week’s Choice beef cutout averaged $256.19 per cwt., about $9 higher than the previous week and down $25 per cwt. (9%) from the same week a year ago.
The estimated total cost for finishing a steer last week was $1,946 per head, up 12% from last year’s estimate of $1,720 per head.
Cattle slaughter totaled an estimated 668,000 head, steady with the same week last year. Packing plant capacity utilization was estimated at 89.5% compared to 90.2% the previous week and 87.7% last year.
Farrow-to-finish hog producers found profits of $18 per head last week, steady with the previous week but up $41 per head from last year’s $23 per head losses. Lean carcass prices averaged $99.22 per cwt., steady with the previous week up $33.18 from last year (33%).
Pork packers saw losses of an estimated $6 per head compared to just breakeven the previous week and $58 lower than the $51 profits found last year. Hog slaughter was estimated at 2.557 million head, down 14,000 head from the previous week and up 6,000 head from last year.
Pork packer capacity utilization was estimated at 95.0% compared to 95.5% the previous week and 95.0% 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.)
