Profit Tracker: Packers, Feeders Drowning in Red Ink
Despite a $2 per cwt. rally to live prices, cattle feeding losses increased $26 per head compared to the final week of 2023 with total losses at $160 per head. Higher cattle costs and lower wholesale beef prices combined to push packer losses to $128 per head, according to the Sterling Beef Profit Tracker.
For the week ending Jan. 6, cash cattle prices averaged $174.22 per cwt., which is roughly $2 per cwt. higher than the previous week. Wholesale beef prices posted an average of $276.38 per cwt., roughly $11 per cwt. lower than 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 $457 per head, up about $3 per head from the previous week, and about $116 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $185.67 per cwt., while cattle placed on feed last week have a breakeven of $165.86 per cwt., which is about $3 per cwt. higher than a month ago. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $225.87 per cwt., or $7 per cwt. more than a month ago. The feeder steer price is 19% higher than last year.
The estimated total cost for finishing a steer last week was $2,599 per head, up 20% from last year’s estimate of $2,075 per head.
Fed cattle slaughter totaled an estimated 435,348, up 7,000 head from the same week last year. Packing plant capacity utilization was estimated at 74.3% compared to 73.1% last year.
Farrow-to-finish hog producers saw losses of $56 per head last week, about $5 less than losses the previous week. Pork producer margins have now been negative every week for the past year. Lean carcass prices averaged $47.52 per cwt., $0.53 per cwt. lower than the previous week and down $29.66 from last year (-39%).
Pork packers saw profits of about $68 per head, or $4 per head more than the previous week, and their best profit margins since January 2022. Last year pork packers saw losses of $5 per head. Hog slaughter was estimated at 2.373 million head, up 152,000 head from the previous week and up 27,000 head from last year.
Pork packer capacity utilization was estimated at 87.4% compared to 85.1% 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.)
