Feeder & packer profit margins steady as cash trade improves

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Cash trade improved by a dollar per hundredweight last week, but higher total costs moved feeder margins marginally lower according to the Sterling Beef Profit Tracker.

Feeder margins fell 40 cents per head last week, averaging $88.68 per head. Margins are more than double the $42.88 per head average of a month ago and well above the negative $35.60 this time last year when feeders were forced to pay high feed costs for drought-depleted grain supplies.

Although cash trade improved during the week, higher feed costs and total costs pushed profit margins lower according to estimates by Sterling Marketing, Inc., Vale, Ore. Feed costs were $345.19, increasing by 21 cents per head, which helped push total costs up to 1,733.51 per head.

Beef packer margins fell $1.71 lower per head last week, remaining in the red with an average of negative $60.28. Packer margins have fallen drastically over the past month, decreasing by $36.65. Losses were limited last week by higher beef cutout values which increased by $2.39 per hundredweight.

Lower feed costs and improving cash hog values turned pork producer profit margins positive last week.

Margins increased by 88 cents to $0.67 cent per head according to the Sterling Pork Profit Tracker. Although margins are in the black and 84 cents per head higher than a year ago, they’re well below the $13.51 per head set a month earlier.

Feed costs moved $1.28 lower per head, bringing the total cost down to $148.56.

Pork packer margins remain negative, averaging negative $3.31 per head. Last week’s margins are only two cents lower than a month earlier and $1.84 above the negative $1.47 per head average of a week earlier. Packer margins were hit by higher cash hog values, up 12 cents to $92.87 head and lower pork prices which fell 37 cents per hundredweight.

The Sterling Beef Profit Tracker for the week ending October 19:

  • Average feedyard margins: $88.68 per head.
  • Average packer margins: -$60.28 per head.

The Sterling Pork Profit Tracker for the week ending October 18:                                          

  • Average farrow-to-finish margins: $0.67 per head.
  • Average pork packer margins: -$3.31 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.



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