Profit margins for cattle feeders and beef packers moved in opposite directions last week, thanks to lower cash fed cattle prices and a rising wholesale beef market.
Cattle feeding margins declined $12 per head for the week, leaving per head losses at $103 per head, according to the Sterling Beef Profit Tracker. Beef packers saw their margins move onto the positive side of ledger sheet with a per head improvement of $37. Average packer profits are now $19 per head. The Sterling Beef Profit Quotient declined 28 points for the week and the industry profitability index is now negative 308, according to estimates developed by Sterling Marketing Inc., Vale, Ore.
Pork producer margins improved more than $8 per head, with margins now a positive $3.55 per hog marketed, according to the Sterling Pork Profit Tracker. Negotiated cash hog prices improved $2.97 per hundredweight last week to $91.41. Pork packer margins declined $4.49 per head for the week, resulting in losses of $14.55 per head.
A year ago cattle feeders sold cash cattle at $119.90 per hundredweight, resulting in losses of $61.89 per head. Last year cash hogs fetched $78.96 per hundredweight, resulting in losses of $4.02 per head.
The Sterling Beef and Pork Profit Trackers are calculated using actual weekly prices for both cattle and hogs, feed costs, beef and pork cutout prices, drop credits and other factors that influence profit margins.
The Sterling Beef Profit Tracker for the week ending May 11:
- Average feedyard margins: -$103.80 per head.
- Average packer margins: $19.55 per head.
- Sterling Profit Quotient: -308.0.
The Sterling Pork Profit Tracker for the week ending May 10:
- Average farrow-to-finish margins: $3.55 per head.
- Average pork packer margins: -$14.55 per head.
The Sterling Beef and Pork Profit Trackers are produced by Sterling Marketing Inc. and John Nalivka, president, Vale, Ore., and are published weekly by Drovers/CattleNetwork, and PorkNetwork.