Profit Tracker: Feeder Margins Decline
Cattle feeding margins declined about $50 per head for the week ending Sept. 9, closing at an estimated $333 per head. Beef packers saw a modest $3 decline to per head profits of $39, according to the Sterling Beef Profit Tracker. While the packer-feeder margin spread narrowed, market leverage remains solidly in favor of cattle feeders.
For the week ending September 9, cash cattle prices averaged $183.21 per cwt., mostly steady with the previous week. That price is 20% higher than last year’s $143.88 per cwt. cash price.
Wholesale beef prices posted an average of $309.32 per cwt., a $1.75 per cwt. decline 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 $560 per head, up about $11 per head from the previous week, and about steady with feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $159.42 per cwt., while cattle placed on feed last week have a breakeven of $183.36 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $249.48 per cwt., and feed costs of $420 per head. The feeder steer price is 29% higher than last year.
The estimated total cost for finishing a steer last week was $2,231 per head, up 13% from last year’s estimate of $1,932 per head.
Fed cattle slaughter totaled an estimated 439,374, down 55,020 head from the previous week and 36,357 fewer than the same week last year. Packing plant capacity utilization was estimated at 76.8% compared to 83.2% last year.
Farrow-to-finish hog producers saw a loss of about $1 per head last week, about $4 per head less than the previous week. Pork producers saw profits of $28 per head the same week a year ago. Lean carcass prices averaged $81.32 per cwt., down $3.03 per cwt. from the previous week.
Pork packers closed the week with $23 per head profits, up $14 per head from the previous week. Last year pork packers were losing about $7 per head. Hog slaughter was estimated at 2.234 million head, down 147,000 head from the week before and down 17,000 head from last year.
Pork packer capacity utilization was estimated at 82.1% compared to 81.6% 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.)
