Profit Tracker: Cattle, Hog Feeding Margins Advance
Profit margins for both cattle and hog finishing operations saw modest gains last week but also carry significantly higher feed costs than a year ago.
Cattle feeders saw average profits of $222 per head the week ending Nov. 12 as the 5-area direst cash price advanced to $153.35 per cwt., according to the Sterling Beef Profit Tracker. Average cattle profit margins were the highest since the $252 per head profits estimated the week ending April 29 or this year.
Costs associated with finishing cattle, however, have increased dramatically since April. The cattle sold last week carried a total feed cost of $581 per head, which is 21% higher than the $458 feed cost for cattle sold the last week of April. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.
Cattle marketed last week had a breakeven of $137.50 per cwt., while cattle placed on feed last week have a breakeven of $$151.75 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $175.83 per cwt., and feed costs of $582 per head. The feeder steer price is 10% higher than last year.
Estimated beef packer margins for the week ending Nov. 12 were $66 per head, down $4 per head from the previous week and down 90% from estimated margins a year ago of $633 per head. Last week’s Choice beef cutout averaged $258.96 per cwt., steady with 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 $1,925 per head, up 8% from last year’s estimate of $1,778 per head.
Cattle slaughter totaled an estimated 671,000 head, about 4,000 head more than the same week last year. Packing plant capacity utilization was estimated at 89.9% compared to 89.4% the previous week and 89.0% last year.
Farrow-to-finish hog producers found profits of $5 per head last week, up about $4 per head from the previous week, and up $39 per head compared to last year’s $34 per head losses. Lean carcass prices averaged $88.96 per cwt., down $3.05 per cwt. from the previous week but up $28.38 from last year (32%).
Pork packers saw profits of about $8 per head, or $4 per more than the previous week and $54 lower than the same week a year ago. Hog slaughter was estimated at 2.492 million head, down 85,000 head from the previous week and down 128,000 head from last year.
Pork packer capacity utilization was estimated at 92.7% compared to 95.8% the previous week and 97.4% 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.)
