Profit Tracker: Packers Claim The Ante

June 23, 2015 02:37 PM
Profit Tracker: Packers Claim The Ante

It was good to be a beef packer last week. Processing margins improved more than $51 per head, with total per head profits at $86. Cattle feeders suffered another beat-down last week, with per head losses totaling $256, according to the Sterling Beef Profit Tracker.

Packer margins improved due to a $3.50 per cwt. increase in beef cutout prices while the 5-area cash cattle price declined $3 per cwt. to $150.12. That’s well below the average breakeven of $169.88 per cwt. feedyards needed last week. A year ago feedyards were making $194 per head.

Beef cutout prices traded at $248.56, a welcome increase after cutout values declined $12 over the previous two weeks.

Farrow-to-finish pork margins fell more than $2 per head with profits settling at $24.04 per head. Negotiated lean hog carcass prices were $1.35 per cwt. lower at $78.81. Both beef and pork profit margins are calculated by Sterling Marketing, Vale, Ore.

The cost of feeder cattle factored against last week’s live cattle sales was $5.57 per cwt. lower compared to the previous week. Feeder cattle represent about 79% of the total cost for finishing a steer, up significantly from last year when feeder cattle represented 74% of that total cost.

A month ago beef packers were earning $86 on every animal processed, while a year ago packers were earning $49, Sterling Marketing estimates. Pork packers saw their margins slip to under $1 profit per head. Pork packer margins have hovered near the breakeven mark for several weeks. Cash prices for fed cattle are $1 per cwt. higher than last year, and negotiated hog prices are $42 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.

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