Profit Tracker: Feeding Margins Improve, Packer Margins Near Triple Digits
Cash cattle prices saw an average decline of about 50 cents per cwt. last week, yet closeouts saw a modest improvement of $3 per head, finishing with average losses of $3 per head. That’s some $130 per head improvement from a month ago. Beef packers saw their margins decline $30 per head, leaving losses at near $100, according to the Sterling Beef Profit Tracker.
Cash cattle averaged $180.46 per cwt. the week ending Feb. 17, while wholesale beef prices held steady at $293.08 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
Cattle sold last week carried a total feed cost of $383 per head, down about $15 per head from the previous week, and about $210 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $180.69 per cwt., while cattle placed on feed last week have a breakeven of $171.99 per cwt., which is about $8 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 $240.53 per cwt., or $15 per cwt. more 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 $2,529 per head, up 15% from last year’s estimate of $2,156 per head.
Fed cattle slaughter totaled an estimated 483,360, up 3,000 head from the same week last year. Packing plant capacity utilization was estimated at 82.5% compared to 82.0% last year.
Farrow-to-finish hog producers saw losses of $3 per head last week, about $7 less than losses the previous week. Pork producer margins have been negative every week for more than a year. Lean carcass prices averaged $70.55 per cwt., $4.30 per cwt. higher than the previous week and down $10 from last year (-9%).
Pork packers saw profits of about $27 per head, or $5 per head less than the previous week. Last year pork packers saw losses of $5 per head. Hog slaughter was estimated at 2.559 million head, down 63,000 head from the previous week and up 70,000 head from last year.
Pork packer capacity utilization was estimated at 94.3% compared to 91.7% 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.)