Cattle feeding margins: meager improvement; packers in the red

A meager $1 per hundredweight advance in cash fed cattle prices last week produced a slight  improvement in cattle feeding margins. Still, feedyards are losing in excess of $250 on every animal they send to market. Packer margins also slipped into the red last week as boxed beef prices declined. Packer margins slipped nearly $20 per head, according to the Sterling Beef Profit Tracker. The Sterling Beef Profit Quotient gained 45 points for the week, but the industry profitability index remains a negative 768, according to estimates developed by Sterling Marketing, Inc., Vale, Ore.

Pork producer margins gained more than $4 per head last week with profits exceeding $26 per hog marketed. Negotiated cash hog prices increased $1.02 per hundredweight last week. Pork packer margins improved nearly $2 per head for the week, but margins remain in the red at more than $8 per head, according to the Sterling Pork Profit Tracker.

A year ago cattle feeders sold cash cattle at $108.29 per hundredweight, resulting in losses of $128.41 per head. Last year cash hogs fetched $101.35 per hundredweight, resulting in profits of $37.46 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 July 28:

• Average feedyard margins: -$253.64 per head.
• Average packer margins: -$12.99 per head.
• Sterling Profit Quotient: -768.2.

The Sterling Pork Profit Tracker for the week ending July 28:

• Average farrow-to-finish margins:  $26.69 per head.
• Average pork packer margins: -$8.48 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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