Cattle feeding margins drop, packers fall into the red

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Feedlot margins fell more than $18 per head last week to $223.51 compared to $242.03, according to the Sterling Beef Profit Tracker. One month ago, cattle feeding margins were $233.83 per head and last year at this time, feeders were losing $74.62 per head.

For the week ending April 5, fed cattle prices were $150.27 per hundredweight, compared to $152.98 per hundredweight the previous week and just shy of $150 one month ago. A recent report from Rabobank suggests that fed cattle prices may have hit their seasonal high for 2014. Feeder steers increased more than $2 to $177.21 per hundredweight. This is up more than $37 compared to the same time last year. Feed costs reached $381.24, compared to $375.40 the previous week, and total costs jumped $22.36 per head to $1,882.99.

After multiple weeks in positive territory, packer margins fell back into the red last week to negative $36.16 per head, compared to $32.28 the previous week and $8.22 last month. At this time last year, packers were losing nearly $50 per head. The beef cutout value fell back to $229.31, compared to $238.01 the previous week. At this time last year, the cutout value was $190.57.

Projections for cow-calf producers have been high the first three months of 2014 and climbed a little higher last week. The Sterling Beef Profit Tracker is projecting cow-calf margins to reach $367.65 per cow in 2014, compared to $243.05 in 2013, $213.65 in 2012 and $153.60 in 2011.

After climbing to more than $116 per head the previous week, farrow to finish margins finished the week ending April 4 at $111.06 per head. At this time last month, margins were $66.31 and at this time last year, they were negative $28.87. Lean hogs were down less than $0.40 to $129.38, according to the Sterling Pork Profit Tracker.

Pork packer margins improved slightly last week to negative $1.15 per head, compared to negative $3.05 the previous week. The pork cutout value remained steady at $131.40.

The Sterling Beef Profit Tracker for the week ending April 5:

  • Average feeder margins: $223.51 per head.
  • Average beef packer margins: -$36.16 per head.

The Sterling Pork Profit Tracker for the week ending April 4:                                          

  • Average farrow-to-finish margins: $111.06 per head.
  • Average pork packer margins: -$1.15 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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