Profit Tracker: Feeding Margins In Black, Packer Margins Remain Red
A $3 really in cash cattle prices lifted average cattle feeding margins into the black at $14 per head profits the week ending Feb. 24. That’s near a $100 per head improvement over one month ago. Beef packers also saw their margins improve $100 per head, though last week’s average remained $74 in the hole, according to the Sterling Beef Profit Tracker.
Cash cattle averaged $183.14 per cwt. the week ending Feb. 24, while wholesale beef prices posted gains to close at $296.61 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 $371 per head, down about $12 per head from the previous week, and about $217 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $182.13 per cwt., while cattle placed on feed last week have a breakeven of $174.11 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 $244.60 per cwt., or $16 per cwt. more than a month ago. The feeder steer price is 26% higher than last year.
The estimated total cost for finishing a steer last week was $2,549 per head, up 17% from last year’s estimate of $2,126 per head.
Fed cattle slaughter totaled an estimated 462,540, down 13,676 head from the same week last year. Packing plant capacity utilization was estimated at 79.0% compared to 81.3% last year.
Farrow-to-finish hog producers found margins at breakeven last week, about $2 better than the $2 per head losses the previous week. Pork producer margins had been negative every week for more than a year. Lean carcass prices averaged $73.46 per cwt., $2.91 per cwt. higher than the previous week and down $7 from last year (-9%).
Pork packers saw profits of about $28 per head, or $1 per head more than the previous week. Last year pork packers saw profits of $1 per head. Hog slaughter was estimated at 2.578 million head, up 19,000 head from the previous week and up 218,000 head from last year.
Pork packer capacity utilization was estimated at 94.9% compared to 87.1% 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.)
