Profit Tracker: Cattle Slaughter Declines
Beef packers continue experiencing negative margins as showlists shrink and cattle slaughter declines. Packers lost an average $49 per head the week ending Dec. 17, according to the Sterling Beef Profit Tracker. That was a $92 per head improvement on the previous week as wholesale beef prices gained $9 per cwt.
Average feeding margins were estimated at $110 per head, about $70 per head less than the previous week, and $98 per head less than the same week a year ago. The 5-area price for fed cattle averaged $155.87 per cwt., or about 50-cents per cwt. lower than the previous week.
Last week’s Choice beef cutout averaged $251.75 per cwt., $9.25 higher than the previous week and $8.43 lower than last year’s price.
Costs associated with finishing cattle have increased dramatically since April. The cattle sold last week carried a total feed cost of $575 per head, which is 15% higher than the $432 feed costs for cattle sold the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.
Cattle marketed last week had a breakeven of $147.98 per cwt., while cattle placed on feed last week have a breakeven of $152.01 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $177.15 per cwt., and feed costs of $572 per head. The feeder steer price is 10% higher than last year.
The estimated total cost for finishing a steer last week was $2,071 per head, up 17% from last year’s estimate of $1,764 per head.
Cattle slaughter totaled an estimated 629,000 head, about 23,000 head less than the previous week and 28,000 head fewer than the same week last year. Packing plant capacity utilization was estimated at 85.8% compared to 90.1% last year.
Farrow-to-finish hog producers saw losses of $10 per head last week, or about $9 per head more than the previous week. Pork producers lost an average of $27 per head the same week a year ago. Lean carcass prices averaged $84.09 per cwt., down $2.04 per cwt. from the previous week and up $19.88 from last year (23%).
Pork packers saw losses of about $1 per head, or $5 per head less than the previous week. Last year pork packers saw profits of $41 per head. Hog slaughter was estimated at 2.596 million head, up 26,000 head from the previous week and down 59,000 head from last year.
Pork packer capacity utilization was estimated at 96.4% compared to 98.7% 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.)
