Feeder, packer margins move opposite directions

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Packers saw margins move back above twenty dollars last week as cash trade remained steady and the beef cutout moved $2.75 higher. Feeder margins weren’t as lucky.

Feeder margins remained negative and lost almost $18 moving from -$41.58 to -$59.53 per head. Even with feeder margins near negative $60 per head, they have improved greatly from a month ago, when losses averaged $148.49 per head, and are better than a year earlier when losses were at $156.97 per head according to the Sterling Beef Profit Tracker.

Feed costs and the total cost per head increased while cash prices remained at $123 per head. The calculated breakeven price increased by over two dollars last week and is five dollars higher than this time last month.

Packer margins were $5.37 per head higher last week, averaging $20.23 per head. Although packer margins improved over the previous week, they’re $3.59 per head lower than a month earlier according to estimates by Sterling Marketing, Inc., Vale, Ore.

Pork producers continue to see positive margins, however the Sterling Pork Profit Tracker shows margins moved $13.90 lower last week, averaging $11.58 per hog.

Last week’s negotiated cash hog prices moved lower as well, down $5.20 per hundredweight to $94.10. Last week’s negotiated prices were above numbers from this time last year, but were $6.98 lower than prices recorded a month earlier.

Pork packer margins improved $4.74 per head for the week, finishing at $6.08. Both carcass weights and the pork cutout were lower than the previous week.

Feed costs and total costs were higher again this week for pork producers, bringing the calculated breakeven price $1.16 higher for last week’s finishing placement.

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 August 24:

  • Average feedyard margins: -$59.53 per head.
  • Average packer margins: $20.23 per head.

The Sterling Pork Profit Tracker for the week ending August 23:                                          

  • Average farrow-to-finish margins: $11.58 per head.
  • Average pork packer margins: $6.08 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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