Profit Tracker: Cattle Margins Narrowing, Pork Improves
Cattle feeding margins narrowed significantly last week while pork producer margins remain mired in red ink the first week of November.
Cattle feeding margins declined $68 per head the week ending Nov. 4, printing at positive $231. Beef packers saw their margins slip $3 further into the red at negative $62 per head, according to the Sterling Beef Profit Tracker. The packer-feeder margin spread narrowed $64 per head to $293, o
advantage cattle feeders.
For the week ending Nov. 4, cash cattle prices averaged $184.87 per cwt., which is roughly $1 higher than the previous week. Wholesale beef prices posted an average of $300.31 per cwt., a $2.11 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 $523 per head, up about $33 per head from the previous week, and about $12 more than feed costs for cattle sold the same week a month ago. Feed costs are 15% lower than a year ago.
Cattle marketed last week had a breakeven of $168.38 per cwt., while cattle placed on feed last week have a breakeven of $169.35 per cwt., which is about $11 per cwt. lower than a month ago. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $230.92 per cwt., or $20 per cwt. less than a month ago. The feeder steer price is 25% higher than last year.
The estimated total cost for finishing a steer last week was $2,357 per head, up 18% from last year’s estimate of $1,931 per head.
Fed cattle slaughter totaled an estimated 492,328, down 3,116 head from the previous week and 22,611 fewer than the same week last year. Packing plant capacity utilization was estimated at 84.1% compared to 90.0% last year.
Farrow-to-finish hog producers saw losses of $20 per head last week, about $5 less than losses the previous week. Pork producers saw breakeven margins the same week a year ago. Lean carcass prices averaged $70.72 per cwt., down $2.74 per cwt. from the previous week and down $21.29 from last year (-22%).
Pork packers saw profits of about $25 per head, or $5 per head more than the previous week. Last year pork packers saw profits of $4 per head. Hog slaughter was estimated at 2.677 million head, up 63,000 head from the previous week and up 102,000 head from last year.
Pork packer capacity utilization was estimated at 98.8% compared to 93.3% 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.)
