Profit Tracker: Packer/Feeder Margin Spread Grows
Negotiated cash cattle prices gained more than $2 per cwt. last week posting new record highs and adding $24 profit to an industry average $124 per head. Meanwhile, beef packers saw their margins erode another $12 per head to average losses of $123 per head, according to the Sterling Beef Profit Tracker.
Cash cattle averaged $190.20 per cwt. the week ending Mar. 23, while composite wholesale beef prices posted $2.71 per cwt. gains to close at $300.20 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
Cattle sold last week carried a total feed cost of $386 per head, up about $2 per head from the previous week, and about $216 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $181.33 per cwt., while cattle placed on feed last week have a breakeven of $181.28 per cwt., which is up nearly $2 per cwt. from the previous week. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $255.46 per cwt., or $11 per cwt. more than a month ago. The feeder steer price is 27% higher than last year.
The estimated total cost for finishing a steer last week was $2,538 per head, up 17% from last year’s estimate of $2,111 per head.
Fed cattle slaughter totaled an estimated 473.018, down 13,561 head from the same week last year. Packing plant capacity utilization was estimated at 80.0% compared to 83.1% last year.
Farrow-to-finish hog producers found positive margins at $18 per head last week, up $5 from the previous week. Lean carcass prices averaged $82.28 per cwt., $1.87 per cwt. higher than the previous week and $2.84 per cwt. higher than last year.
Pork packers saw profits of about $11 per head, or $3 per head less than the previous week. Last year pork packers saw losses of $5. Hog slaughter was estimated at 2.532 million head, up 66,000 head from the previous week and up 60,000 head from last year.
Pork packer capacity utilization was estimated at 93.9% compared to 91.8% last year.
(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)
