Beef - General
Cattle feeders turned a tidy profit for the second consecutive week.
Cattle feeders earned average profits of $68 per head last week, $30 per head more than the previous week.
Calling losses of $193 per head an improvement may be painful, but it’s accurate.
Last week’s $2 per cwt. decline in cash cattle prices left feedyard margins at near breakeven levels.
Cattle feeding profit margins retreat further with a weaker cash market and limited packer interest.
Average cattle feeding losses totaled $106 per head for the week ending June 21.
The Sterling Beef Profit Tracker reports average cattle feeding closeouts were in the black last week, but with little room to spare.
Beef packers continued to maintain their leverage on cattle markets heading into the holiday-shortened first week of September.
Last week’s $2 rally in cash cattle prices helped narrow the spread between feedyard losses and packer profits.
Cattle feeding margins slipped further into the red last week on soft cash prices, while packer margins climbed to extreme heights.
Feedyards saw closeouts improve dramatically last week after the cash cattle market posted its third consecutive week of higher prices.
Gains in cash fed cattle prices did not translate into higher profits for feedyards last week as higher feeder cattle prices were calculated into breakevens.
The combination of shrinking packer profits and smaller feedyard losses over the past six weeks has reduced the packer/feeder margin spread by 27%, according to the Sterling Beef Profit Tracker.
Last week’s $1 increase in cash fed cattle prices did little for feedyard profits, but the $6.40 rally in wholesale beef prices added another $25 onto already large packer margins.
Cattle feeders continue to find modest profits on a cash basis despite last week’s $2 per cwt. market retreat.
Beef packer profit margins fell to their lowest level in nearly two years last week while cattle feeding margins exceeded triple digits for the second consecutive week.
Cattle feeding profit margins exceeded beef packer margins last week for the first time in more than two years as cash cattle prices have increased 20% since September.
Despite a $2 decline in cash fed cattle prices, feedyard closeouts reported positive mid-winter results while packer margins held firm.
Cattle feeders and beef packers are both experiencing modest mid-winter profits, though both margins were slightly lower on cash prices of $121.
Beef packers saw their margins decline to the lowest level since before the Tyson packing plant fire August 9 as beef cutout prices declined and cash cattle prices increased.
Cash cattle prices lost another $2 per cwt. last week, a decline of $7 over two weeks. Coupled with higher input costs on feeder cattle, the decline feedyards with an average $22 per head loss last week.
Cash cattle prices stubbornly steady to $1 higher gave a slight boost to feedyard margins and left packer margins nearly unchanged last week.
Sharply lower cash cattle prices erased $100 per head from closeout profit margins last week and left cattle feeders re-evaluating ideas of a spring rally.
Declining cash fed cattle prices erased profit margins for cattle feeders last week, and declining wholesale beef prices cut packer margins by 34%.
Based on cash sales of $108.77, cattle closeouts lost an average of $90 per head the week ending March 15.
Sharply higher beef cutout values produced windfall profits for beef packers last week while cattle feeders saw closeouts with average losses about steady, according to the Sterling Beef Profit Tracker.
Cattle and hogs prices both moved higher last week and both enterprises posted profits on closeouts for the first time in several months.
Cattle and hog feeding operations saw their margins remain modestly profitable last week with little movement in cash prices. Both cattle and hog feeding margins are higher than last year at the same time.
Cattle and hog finishing margins are both modestly positive for the seventh consecutive week, though hog margins saw a slight decline with lower lean carcass prices.
Cattle feeders saw modest profits for the 10th consecutive week, a headline-worthy observation in normal times. The beef complex is not operating in normal times.