Packer
Uncharted territory. That’s where America’s cattle feeding industry finds itself as fed cattle lose $611 per head.
It’s been a rough fall for cattle feeders, but cowboys found some signs last week that suggest the worst may be behind them.
Cattle feeders hope the cash market found its bottom last week.
The adjectives have all been used to describe the despair that is cattle feeding. Last week was simply worse than the week before, which was a train wreck.
Last week’s $2.50 rally in the cash market was another step in the right direction, but closeouts remain $26.46 per cwt. short of break even.
After slicing more than 50% off the monstrous losses found a month ago, cattle feeders saw their margins slip $43 per further into the red last week with $2 per cwt. lower bids.
Feedyard closeouts saw a $100 per head improvement last week, bringing losses under the $300 per head mark for the first time in months.
Last week’s $3 per cwt. decline in cash fed cattle prices dealt another cruel blow to feedyard closeouts.
A $6-plus per cwt. gain in cash cattle prices produced a 20% improvement in feeding margins.
Cattle feeding margins improved by 50% over the past two weeks, and by 38% during the past week.
It’s the best signal cattle feeders have seen in many months.
For the first time in over a year, average cattle feeding losses are out of triple digits, according to the Sterling Beef Profit Tracker.
The march toward break even for cattle feeders stumbled last week as average losses increased $36 per head, leaving closeouts $113 in the red, according to the Sterling Beef Profit Tracker.
Easter week produced a $3 per cwt. decline in fed cattle prices and a $73 erosion in cattle feeding margins.
Cattle feeding margins gained only modestly, despite the fact feeder cattle factored into closeouts were $40 per head less than the previous week.
Last week’s $2 per cwt. rally in cash fed cattle prices helped feedyard closeouts improve nearly $100 per head.
Cattle feeders generally expected margins to be much better by now. An anticipated spring rally that could have erased a lot of red ink has failed to materialize, leaving feedyard closeouts stuck in neutral with near $200 losses.
Cash fed cattle prices retreated $7.77 per cwt. last week. As a result, closeouts added another $75 of red ink.
A cash market rally helped add $62 per head to feedyard margins last week, ending with total average profits of $212 per head, according to the Sterling Beef Profit Tracker.
Cattle feeding profits declined $20vper head last week, yet closeouts remained $11 in the black.
Feedyards are as close to breaking even on a cash basis as they’ve been during any point in the past 18 months.
Cattle feeders finally found profitability last week after cattle markets posted a $6 to $7 per cwt. rally.
Cattle feeders turned a tidy profit last week despite a $2 retreat in cash cattle prices.
Feedyard margins remained about $150 per head last week despite a $6 per cwt. retreat in cash cattle prices.
Most analysts expected feedyards to be near breakeven by the time the calendar turned to May. May is here and the underperforming cash fed cattle market has kept feedyards struggling.
A decline of $5 per cwt in cash fed cattle prices pushed cattle feeding margins $60 per head lower, leaving losses at $120 per head, according to the Sterling Beef Profit Tracker.
With cash cattle prices tumbling another $4 per cwt lower, cattle feeding margins fell accordingly.
Cattle feeding margins eroded $62 per head last week, falling $35 into negative territory.
The dog days of summer are here for cattle producers as red ink continues seeping into feedlot ledgers.