Profit Tracker: Packers Drive The Bus

Profit Tracker: Packers Drive The Bus

Dramatically improving margins helped beef packers take command last week while cattle feeding closeouts fell further in the red. Cash fed cattle prices declined about $1 and cattle feeding margins declined another $11 per head, totaling losses of $183 per head.

The 5-area direct cash cattle price was $160.55 per cwt., well below the average breakeven price of $174.64, according to the Sterling Beef Profit Tracker. A year ago cattle feeders were earning $188 on every animal sold.

Beef cutout prices traded $5 per cwt. higher than the previous week at $259.49, and packer margins improved nearly $40 per head, resulting in average profits of $64 on every animal processed.

Farrow-to-finish pork margins improved more than $7 per head, producing profits of $28 per head. Negotiated lean hog carcass prices improved $3.31 per cwt. to $82.65. 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 down only slightly compared to the previous week. Feeder cattle represent more than 79% of the total cost for finishing a steer, up significantly from last year when feeder cattle represented 73% of that total cost.

A month ago beef packers were earning $28 on every animal processed, while a year ago packers were losing $47, Sterling Marketing estimates. Pork packers saw their margins improve $5 per head, with losses of about $10 per head. Cash prices for fed cattle are $14 per cwt. higher than last year, and negotiated hog prices are $28 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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