Beef rally boosts packer margins, but feeding margins decline

A $10 rally in boxed beef prices cut packer losses in half last week, but the rally didn’t spill over to help feedyard margins. Cattle feeding margins declined another $11 per head, leaving feeders with losses in excess of $90 per head. Packer margins improved more than $60, but losses remain over $45 per head for each animal processed, according to the Sterling Beef Profit Tracker. The Sterling Beef Profit Quotient declined 19 points for the week, according to estimates developed by Sterling Marketing, Inc., Vale, Ore.

Pork producer margins improved $3.44 per head last week, with profits now above $14 per head. Pork packer margins declined $2.58 per head, resulting in losses of $11per head, according to the Sterling Pork Profit Tracker.

Cash fed cattle traded at $121.15 per hundredweight last week, down $0.32, while Western Corn Belt negotiated hog prices were $82.43 per hundredweight.

A year ago cattle feeders sold cash cattle at $119 per hundredweight which resulted in profits of $240.65 per head. Last year cash hogs fetched $94.28 per hundredweight resulting in profits of $33.42 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 April 21:

• Average feedyard margins: -$90.07 per head.
• Average packer margins:   -$45.74 per head.
• Sterling Profit Quotient: -283.4.

The Sterling Pork Profit Tracker for the week ending April 21:

• Average farrow-to-finish margins:  $14.29 per head.
• Average pork packer margins:   -$11.67 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.

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