Feeding Margins Remain Above $230, Packers in the Black

March 11, 2014 05:47 AM
Feeding Margins Remain Above $230, Packers in the Black

A $2 per cwt. decline in cash prices cut into cattle feeding margins last week while beef packing margins took a leap forward.

Cattle feeders recorded average profits of $233 per head on cattle marketed last week, about $50 per head less than the previous week, according to the Sterling Beef Profit Tracker. The margins are significantly better than the $145 per head profits recorded last month and a whopping $288 per head better than the $54 average losses recorded last year.

Beef cutout values moved nearly $14 per cwt. higher which helped beef packers erase negative processing margins. Packers saw average margins last week at $8.55, compared to losses of more than $80 per head the previous week, according to estimates developed by John Nalivka, president of Sterling Marketing, Vale, Ore.

Farrow-to-finish hog margins increased $16.50 per head to more than $66 per head, the highest profit margins the industry has seen since 1987, Nalivka says. Negotiated cash hog prices rallied $7.6 to $106 per cwt. Pork packer margins remain at about breakeven.

The spike in both cattle feeding and farrow-to-finish profits is due to significantly higher cash prices and lower overall feed prices. Cash prices for fed cattle are more than $20 per cwt. higher than last year, and negotiated hog prices are more than $28 per cwt. higher.

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