Analysts have noted the exodus of longs from the live cattle futures market over the past week. It’s a seasonal pattern that was accelerated by volatility in the equity markets. The result was a cash cattle market trading $1.30 per cwt. lower the week ending March 18 to $164.25. Average cattle feeding margins declined by $21 per head to $194, according to the Sterling Beef Profit Tracker. Packer margins fell $20 to an average of $77 per head. Wholesale beef prices declined $2.11 per cwt. to $283.13 per cwt.
Cattle feeders in the North have experienced dismal winter feeding conditions which slowed cattle performance and eroded margins. The South experienced much more favorable conditions.
Cattle sold last week carried a total feed cost of $599 per head, which is 25% higher than the $441 feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $150.39 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 $186.97 per cwt., and feed costs of $543 per head. The feeder steer price is 19% higher than last year.
The estimated total cost for finishing a steer last week was $2,106 per head, up 16% from last year’s estimate of $1,763 per head.
Fed cattle slaughter totaled an estimated 490,918 head, about 2,000 head fewer than the previous week and 4,000 head fewer than the same week last year. Packing plant capacity utilization was estimated at 85.7% compared to 84.9% last year.
Farrow-to-finish hog producers saw losses of $8 per head last week, about $3 less than the previous week. Pork producers saw profits of $84 per head the same week a year ago. Lean carcass prices averaged $80.81 per cwt., steady with the previous week.
Pork packers saw profits of about $2 per head, about $4 lower than the previous week. Last year pork packers saw losses of about $24 per head. Hog slaughter was estimated at 2.492 million head, down 3,000 head from the previous week but up 67,000 head from last year.
Pork packer capacity utilization was estimated at 92.6% compared to 90.0% 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.)
