Beef packer margins improve, feeding margins ugly

Beef packer margins continue to improve as boxed beef prices trend higher. Last week’s beef packer margins jumped more than $20 per head higher, leaving packer profits in the black for the second consecutive week, according to the Sterling Beef Profit Tracker. Cattle feeding margins improved slightly, but feedyard losses remained more than $100 per head. The Sterling Beef Profit Quotient improved 22 points for the week, according to estimates developed by Sterling Marketing, Inc., Vale, Ore.

Pork producer margins declined $9.42 per head last week, leaving pork producers in the red 60 cents per head. Pork packer margins improved $8.94 per head, but pork packers still lost more than $3 per head, according to the Sterling Pork Profit Tracker.

Cash fed cattle traded at $119.68 per hundredweight last week, up $1.05, while Western Corn Belt negotiated hog prices dropped $3.17 to $79.32 per hundredweight.

A year ago cattle feeders sold cash cattle at $114.76 per hundredweigh. Last year cash hogs fetched $90.46 per hundredweight resulting in profits of $20.60 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 May 5:

• Average feedyard margins: -$101.95 per head.
• Average packer margins: $27.27 per head.
• Sterling Profit Quotient: -300.4.

The Sterling Pork Profit Tracker for the week ending May 5:

• Average farrow-to-finish margins: - $0.60 per head.
• Average pork packer margins: -$3.10 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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