Profit Tracker: Packer/Feeder Margin Spread Exceeds $400
Negotiated cash cattle sold $3 lower last week but lower costs helped boost feedyard margins $30 per head for an industry average profit of $202. Meanwhile, beef packers saw their margins erode another $50 per head to average losses of $224 per head, according to the Sterling Beef Profit Tracker. That puts the margin spread at $426 per head in favor of the feeder.
Cash cattle averaged $186.50 per cwt. the week ending Apr. 6, while composite wholesale beef prices posted $7.21 per cwt. losses to close at $291.35 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 $378 per head, down about $10 per head from the previous week, and about $219 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $172.07 per cwt., while cattle placed on feed last week have a breakeven of $172.04 per cwt., which is down about $8 per cwt. from the previous week. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $2339.97 per cwt., or $10 per cwt. less than a month ago. The feeder steer price is 20% higher than last year.
The estimated total cost for finishing a steer last week was $2,409 per head, down $69 per head from the previous week and up 11% from last year’s estimate of $2,138 per head.
Fed cattle slaughter totaled an estimated 484,764, up 10,796 head from the same week last year. Packing plant capacity utilization was estimated at 82.8% compared to 80.9% last year.
Farrow-to-finish hog producers found positive margins at $31 per head last week, up $14 from the previous week. Lean carcass prices averaged $86.85 per cwt., up $4.62 per cwt. from the previous week and $13.04 per cwt. higher than last year.
Pork packers saw profits of about $10 per head, or $5 per head less than the previous week. Last year pork packer margins were near breakeven. Hog slaughter was estimated at 2.421 million head, up 17,000 head from the previous week and up 52,000 head from last year.
Pork packer capacity utilization was estimated at 89.8% compared to 88.2% 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.)
