Cattle feeding margins took two steps back last week as cash cattle prices hover around what producers hope are the summer lows. Feedyard closeouts revealed a $108 per head loss last week, significantly poorer than the previous week’s loss of just $11 on every animal shipped, according to the Sterling Beef Profit Tracker.
Choice steer prices closed at $151 per cwt., nearly steady with the previous week. A $10 per cwt. decline in beef cutout values slashed beef packer operating margins by $107 per head. The cutout closed Friday at $241.57, and the result was packer operating margins at $33 per head.
Feedyard margins have improved in recent weeks, and just a month ago feeders were losing $270 per head. The improvement is due to significantly lower costs attached to the feeder cattle calculated against closeouts. Feeder cattle were priced into last week’s ledger at $10 per cwt. lower than a month ago. Feeder cattle represent 78.3 % of the cost of finishing a steer, significantly higher than last year’s 72.8%. A year ago feedyards were showing a profit of $302 per head.
A month ago beef packers were earning $34 on every animal processed, while a year ago packers were earning $53, Sterling Marketing estimates.
Farrow-to-finish pork producers showed a profit margin of $25 per hog last week, $5 better than the previous week, and steady with a month ago.
Pork packers saw their margins decline $7 to a negative $7.55 per head. Pork packer margins hovered near the breakeven mark for several weeks before last week’s decline. Cash prices for fed cattle are $5 per cwt. lower than last year, and negotiated hog prices are $53 per cwt. lower than last year.
Nalivka projects average cash profit margins for cow-calf producers at $541 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow.