Packer
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.
Cattle feeding margins jumped $72 per head higher the week ending Jan. 25 as the value of feeder cattle calculated against those closeouts declined $8 per cwt.
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 an average $1 decline in cash fed cattle prices last week, cattle feeding margins remained solidly profitable on a cash basis.
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.
Cattle feeders and pork producers continue to experience significant per head losses as market prices trend lower following slaughter and processing challenges from the COVID-19 pandemic.
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 feeding margins have slowly improved over the past few weeks, but average closeouts continue to show losses in excess of $100 per head.
Cattle and hog feeding margins were little changed last week, with both recording modest losses. Beef packers saw improved margins on significant gains in wholesale beef prices.
Cash fed cattle prices ended last week $10 per cwt. lower than last year while the beef cutout closed $16 higher than the same week a year ago. The result? Packer margins $314 per head more than last year.
Cattle and hog feeding both saw solid average profits for the week ending April 2, boosted by higher average farmgate prices. Cattle were positive for the second week, while positive hog margins entered a third month.
Cattle and hog feeding operations are experiencing the highest market prices since before the pandemic began more than a year ago. Hog margins were positive for the 11th consecutive week.
Cattle and hog feeding operations are in the midst of their most profitable time since before the pandemic began. Cattle margins nearly doubled last week and hog margins were positive for the 10th consecutive week.
Cattle feeding margins improved with a $2 per cwt. increase in cash cattle prices while farrow-to-finish hog margins declined modestly on slightly lower lean carcass prices.
Momentum continues to build for cattle feeders as closeouts saw average profits increasing during the final week of 2021. Farrow-to-finish hog operations continue with negative profit margins.
Cattle feeders saw average profit margins exceed $200 per head last week while pork producers found losses of $44 per head, according to the Sterling Profit Trackers.
Both cattle and hog finishing estimated margins were positive last week despite rising feed costs across both enterprises. Cattle slaughter totals increased while hog processing numbers were near steady.
Market leverage has shifted dramatically toward ranchers and cattle feeders over the past two months. The combination of rising cattle prices and declining wholesale beef prices has eroded historic packer margins.
Higher cash cattle prices and lower wholesale beef prices have erased much of the historic profits beef packers saw last year, according to estimates by Sterling Marketing, Inc.
Average feed costs for finishing cattle and hogs are 25% to 28% higher than the same week last year, according to Sterling Marketing’s weekly calculations.