Last week’s $4-plus rally in cash fed cattle prices cut average feedyard losses in half, leaving the red ink totaling $90 on every animal shipped.
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.
A $1 decline in average fed cattle prices and a $25 per head increase in the cost of feeder cattle pushed cattle feeding losses to $52 per head last week.
Beef packer margins increased $6 per head, resulting in average profits of $198 on every animal processed. Packer margins are about $72 per head better than a month ago.
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.
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.
Cash cattle prices may have been stuck in neutral last week, but cattle feeders saw an impressive gain in margins as the price of feeder cattle factored into closeouts dropped significantly.
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.
Cattle feeding margins gained only modestly, despite the fact feeder cattle factored into closeouts were $40 per head less than the previous week.
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.