Feeder margins improve with lower feed costs, packer margins fall

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Feeder margins are getting better and are twice as good as a year ago with feed costs more than $35 cheaper than the previous week, according to the Sterling Beef Profit Tracker.

Lower feed costs paired with even cash trade, steady at $123, improved feeder margins by $20.09 over the previous week to -$37.87 per head. Although margins remain negative, they’re better than -$83.98 a month earlier and -$78.46 this time last year.

Feeders saw total costs decrease by $36.94 per head which helped move the calculated breakeven down $2.84 per cwt to 129.55.

Feed costs are greatly improved from a year ago, down $120.38 per head from $515.54 per head this time last year.

Beef packers have seen their margins slowly decline in the past two weeks, falling another $4.17 per head last week to $14.10 according to the Sterling Beef Profit Tracker. Packer margins are almost double margins from a month earlier and much better than the -$33.34 per head this time last year according to estimates by Sterling Marketing, Inc., Vale, Ore.

Pork packer margins were negative last week, falling more than eight dollars from the previous week to average a loss of a quarter per head according to the Sterling Pork Profit Tracker.

Pork packer margins were 4 cents per head a month ago and up to $17.18 per head this time last year.

Pork producers also saw lower margins last week as profits fell 87 cents to $5.09 per head. The slight trend lower moves margins $24.76 per head lower than a month earlier, but is $34.10 better than the negative margins seen this time last year according to the Sterling Pork Profit Tracker.

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 September 7:

  • Average feedyard margins: -$37.87 per head.
  • Average packer margins: $14.10 per head.

The Sterling Pork Profit Tracker for the week ending September 6:                                          

  • Average farrow-to-finish margins: $5.09 per head.
  • Average pork packer margins: -$0.25 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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