Profit Tracker: Feeding Margins Tumble 60%
Cattle feeding margins declined $137 per head last week, printing at positive $94 after several weeks printing above $200. The erosion was the result of average fed cattle cash prices dropping $5.06 per cwt. Beef packers saw their margins decline $30 per head and falling to $92 per head underwater, according to the Sterling Beef Profit Tracker. The packer-feeder margin spread was $186 per head advantage cattle feeders.
For the week ending Nov. 11, cash cattle prices averaged $179.81 per cwt. That price is 15% higher than last year’s $153.35 per cwt. cash price.
Wholesale beef prices posted an average of $295.16 per cwt., a $5.15 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 $526 per head, up about $4 per head from the previous week, and about $8 more than feed costs for cattle sold the same week a month ago. Feed costs are 10% lower than a year ago.
Cattle marketed last week had a breakeven of $1673.07 per cwt., while cattle placed on feed last week have a breakeven of $169.70 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 $232.21 per cwt., or $18 per cwt. less than a month ago. The feeder steer price is 24% higher than last year.
The estimated total cost for finishing a steer last week was $2,423 per head, up 20% from last year’s estimate of $1,924 per head.
Farrow-to-finish hog producers saw losses of $19 per head last week, about a $2 per head improvement compared to the previous week. Pork producers saw profits of $3 per head the same week a year ago. Lean carcass prices averaged $68.66 per cwt., down $2.06 per cwt. from the previous week.
Pork packers closed the week with $33 per head profits, up $8 per head from the previous week. Last year pork packer margins were positive $8. Hog slaughter was estimated at 2.576 million head, down 95,000 head from the week before and up 76,000 head from last year.
Pork packer capacity utilization was estimated at 95.0% compared to 90.6% 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.)
