As cattle markets climb, packer margins hit positive territory

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How high can it go? With beef and cattle prices setting new price level records over the past few weeks, that is a question many are asking around the industry. Both feeder and packer margins are following suit, increasing over the week, and for the first time in a long time packer margins finished in positive territory. According to the Sterling Beef Profit Tracker, feeder margins finished the week ending January 18 at $135.66, compared to $121.94 the previous week and negative $15.70 one month ago. Feed costs were down $5.24 over the week and total costs were down more than $30 per head. Fed cattle have increased more than $12 over the month and finished the week at $142.77 per hundredweight, and feeder steers weighing between 750 and 800 pounds hit $166.80.

Packer margins improved more than $96 per head to finish the week at $52.49, compared to negative $43.86 the previous week, negative $48.43 one month ago and negative $48.69 at this time last year. The beef cutout value topped $220 and finished the week at $224.07, up $14.87 over the week.

Farrow-to-finish margins continued climbing out of the red last week and finished the week ending January 17 at negative $4.74 compared to negative $7.22 the previous week, according to the Sterling Pork Profit Tracker. Lean hogs stayed nearly steady last week and finished the week at $79.90, compared to $79.86 the previous week. Feed costs were up almost $3 to $91.45.

Pork packer margins also improved last week, finishing the week at $5.02, compared to $1.96 the previous week and $14.42 one month ago. The pork cutout value continued recent positive trends and finished the week at $85.54, compared to $84.04 the previous week.

The Sterling Beef Profit Tracker for the week ending January 18:

  • Average feeder margins: $135.66 per head.
  • Average beef packer margins: $52.49 per head.

The Sterling Pork Profit Tracker for the week ending January 10:                                          

  • Average farrow-to-finish margins: -$4.74 per head.
  • Average pork packer margins: $5.02 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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