Cattle and hog feeders are benefitting from dramatically lower grain and feed costs this year while live animal sale prices are higher. Profit margins for both species have doubled in the past month.
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.
Another small rally in cash fed cattle markets provided another modest improvement in feeder margins, but closeouts remain $24.66 per cwt. short of break even.
Beef packer margins jumped into the black last week while cattle feeders saw their margins improve $88 per head, according to the Sterling Beef Profit Tracker.
Beef packer profit margins continued to grow last week as the beef cutout jumped nearly $5 per cwt. and cash fed cattle prices declined another $2 per cwt.
Cattle feeding margins dropped another $45 per head last week, totaling average losses of $163 for every animal that walked on the truck. That’s the result of a $4.37 per cwt. decline in the 5-area direct cash price which registered $154.93 per cwt., well below the average breakeven price of $167.53.
Cattle feeding margins were unchanged from the previous week, which means the train wreck continues. Despite modest gains in the cash market, cattle feeders lost an average of $206 per head, just $1 better than the previous week.
Beef cutout prices trended about $2.80 per cwt. higher to $256.37, and packer margins improved more than $26 per head, resulting in losses of $15 on every animal processed.
Beef packers put away the red ink last week as they turned modest profits on every animal processed. Feedyard margins, however, slipped a little further away from positive.