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. Closeouts revealed a $383 per head loss on cash prices of $132.57, according to Sterling Marketing, Vale, Ore.
Last week’s dip in cash prices was loosely tied to the New Year selloff on Wall Street, and a little surprising to feeders who had priced their weekly showlists at $140 per cwt. Last week’s 5-area cash price was $29.46 per cwt. short of breakeven.
Sterling Marketing president John Nalivka calculates that feedyards lost a cumulative unhedged $4.7 billion in 2015. That compares to an unhedged profit of $3.9 billion in 2014, and losses of $1.1 billion in 2013.
Feeder cattle prices factored into Sterling Marketing’s sample closeout were $2 per cwt. higher than the previous week at $215.58 per cwt., and $10 per cwt. lower than feeder cattle prices factored into closeouts a month ago. Yearling feeder cattle placed on feed last week averaged $166 per cwt., which represents a $496 per head decline from the same steers placed on feed a year ago.
Beef packer margins jumped $82 per head, resulting in average profits of $112 on every animal processed. Packer margins are about $44 per head better than last month.
A month ago cattle feeders were losing $681 per head, while a year ago feedyard closeouts were $51 in the black, according to Sterling Marketing. Feeder cattle represent 79% of the cost of finishing a steer.
A month ago beef packers were earning $68 for every animal processed, while a year ago packers were losing $58, Sterling Marketing estimates.
Farrow-to-finish pork producers lost $23 per hog last week, a $5 per head improvement from the previous week, and $2 per head better than the $25 per head loss found a month ago.
Pork packers saw their margins decline $2.90 per head to a profit of $23. Negotiated prices for lean hogs were $52.72 per cwt. last week, a gain of $1.84 per cwt. from the previous week. Cash prices for fed cattle are $37 per cwt. lower than last year, and negotiated hog prices are $23 per cwt. lower than last year.
Sterling Marketing projects 2016 average cash profit margins for cow-calf producers at $237 per cow. Last year’s estimated average cow-calf margins were $429 per cow. Cow-calf profits for 2014 were estimated at $526 per cow.
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