Profit Tracker: Cattle Feeders Gaining Clout
Cattle feeders have gained the upper hand in negotiations with packers throughout the first months of the year with feeding margins now more than double those of a month ago.
Modestly higher cash cattle prices the week ending March 11 left feeders with average profits totaling $216 per head, according to the Sterling Beef Profit Tracker. Cash cattle prices averaged $165.55 per cwt., up $0.52. Packers ended the week with average profits of $77 per head, down about $34 per head from the previous week and down nearly $100 per head from last year.
Wholesale beef prices declined $2.07 per cwt. to $285.24 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.
Cattle sold last week carried a total feed cost of $595 per head, which is 25% higher than the $448 feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $150.14 per cwt., while cattle placed on feed last week have a breakeven of $156 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $189.04 per cwt., and feed costs of $532 per head. The feeder steer price is 21% higher than last year.
The estimated total cost for finishing a steer last week was $2,102 per head, up 15% from last year’s estimate of $1,779 per head.
Fed cattle slaughter totaled an estimated 491,984 head, about 4,000 head more than the previous week and 7,000 head more than the same week last year. Packing plant capacity utilization was estimated at 85.8% compared to 84.6% last year.
Farrow-to-finish hog producers saw losses of $11 per head last week, about steady with the previous week. Pork producers saw profits of $65 per head the same week a year ago. Lean carcass prices averaged $80.80 per cwt., a gain of $0.32 per cwt. from the previous week.
Pork packers saw profits of about $6 per head, up $5 per head from the previous week. Last year pork packers saw losses of about $20 per head. Hog slaughter was estimated at 2.497 million head, down 15,000 head from the previous week and up 78,000 head from last year.
Pork packer capacity utilization was estimated at 92.9% compared to 89.7% last year.
(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)
