Profit Tracker: Profits Improve for Feeders and Packers

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(Lindsey Benne)

Cash cattle and wholesale beef prices moved higher last week, increasing profit margins for both cattle feeders and beef packers.

Cattle feeders saw average profits of $165 per head last week as cash prices gained $2.72 per cwt. to $163.69, according to the Sterling Beef Profit Tracker. Beef packers found margins at an average of $124 per head, a gain of about $70 per head from the previous week. Packer margins a year ago were estimated at $201 per head.

Wholesale beef prices improved $11.12 per cwt. to $285.02 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.

Cattle sold last week carried a total feed cost of $588 per head, which is 25% higher than the $439 feed costs for cattle sold the same week a year ago.

Cattle marketed last week had a breakeven of $151.87 per cwt., while cattle placed on feed last week have a breakeven of $153 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $181.36 per cwt., and feed costs of $553 per head. The feeder steer price is 16% higher than last year.

The estimated total cost for finishing a steer last week was $2,126 per head, up 18% from last year’s estimate of $1,741 per head.

Fed cattle slaughter totaled an estimated 480,804 head, about 7,000 head fewer than the previous week and 23,000 head fewer than the same week last year. Packing plant capacity utilization was estimated at 83.9% compared to 87.9% last year.

Farrow-to-finish hog producers saw losses of $10 per head last week, about $2 per head more than the previous week. Pork producers saw profits of $62 per head the same week a year ago. Lean carcass prices averaged $80.48 per cwt., a gain of $0.33 per cwt. from the previous week.

Pork packers saw profits of about $1 per head, compared to losses of $5 per head last week. Last year pork packers saw profits of $17 per head. Hog slaughter was estimated at 2.375 million head, down 130,000 head from the previous week and down 117,000 head from last year.

Pork packer capacity utilization was estimated at 88.4% compared to 92.7% 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.)

 

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