Profit Tracker: Packer Margins Retreat to Red
Cattle feeding margins gained about $10 per head for the week ending Sept. 16, closing at an estimated $343 per head. Beef packers saw a $51 per head decline which pushed margins $11 into the red, according to the Sterling Beef Profit Tracker. While the packer-feeder margin spread widened to $354 per head in favor of cattle feeders.
For the week ending September 16, cash cattle prices averaged $184.41 per cwt., up about $1.20 from the previous week. That price is 22% higher than last year’s $143.64 per cwt. cash price.
Wholesale beef prices posted an average of $304.04 per cwt., a $5.78 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 $549 per head, down about $11 per head from the previous week, and about $41 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $159.87 per cwt., while cattle placed on feed last week have a breakeven of $185.03 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $253.45 per cwt., and feed costs of $411 per head. The feeder steer price is 40% higher than last year.
The estimated total cost for finishing a steer last week was $2,238 per head, up 13% from last year’s estimate of $1,940 per head.
Fed cattle slaughter totaled an estimated 498,648 up 59,274 head from the previous week and 30,830 fewer than the same week last year. Packing plant capacity utilization was estimated at 87.2% compared to 92.6% last year.
Farrow-to-finish hog producers saw a loss of about $3 per head last week, about $2 per head more than the previous week. Pork producers saw profits of $26 per head the same week a year ago. Lean carcass prices averaged $81.13 per cwt., down $0.19 per cwt. from the previous week.
Pork packers closed the week with $27 per head profits, up $4 per head from the previous week. Last year pork packer margins were $4 per head. Hog slaughter was estimated at 2.531 million head, down 297,000 head from the week before and down 45,000 head from last year.
Pork packer capacity utilization was estimated at 93.2% compared to 89.8% 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.)
