Profit Tracker: Feeding Margins Strong, Packer Woes Continue
Cattle feeding margins declined $21 per head last week, yet cattle feeders saw average profits of $423 per head. Beef packers lost an average of $45 per head, a significant improvement from the previous week’s losses of $121, according to the Sterling Beef Profit Tracker. The current beef margin spread represents a dramatic 180-degree reversal since the excessive packer profits of two years ago.
For the week ending August 19, cash cattle prices posted roughly a $1 per cwt. decline to average $186.30 per cwt. That price is 225% higher than last year’s $145.02 per cwt. cash price.
Wholesale beef prices posted an average of $306.29 per cwt., a $7.82 per cwt. gain from the previous week. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
Cattle sold last week carried a total feed cost of $532 per head, down about $15 per head from the previous week, and 8% lower than the $575 feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $156.07 per cwt., while cattle placed on feed last week have a breakeven of $182.16 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $245.82 per cwt., and feed costs of $433 per head. The feeder steer price is 30% higher than last year.
The estimated total cost for finishing a steer last week was $2,184 per head, up 14% from last year’s estimate of $1,871 per head.
Fed cattle slaughter totaled an estimated 484,176, up 10,218 head from the previous week and 3,000 fewer than the same week last year. Packing plant capacity utilization was estimated at 84.7% compared to 91.1% last year.
Farrow-to-finish hog producers saw profits of about $24 per head last week, about $8 per head less than the previous week. Pork producers saw profits of $85 per head the same week a year ago. Lean carcass prices averaged $95.89 per cwt., down $3.61 per cwt. from the previous week.
Pork packers closed the week with $15 per head profits, down $1 per head from the previous week. Last year pork packers were losing about $29 per head. Hog slaughter was estimated at 2.414 million head, up 60,000 head from the week before and down 7,000 head from last year.
Pork packer capacity utilization was estimated at 88.7% compared to 87.1% 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.)
